Study: US Government Subsidizes Oil & Gas Industry To The Tune Of $31 Billion/Year; Total More Than Doubled Since 2017 [View all]

The US currently subsidizes the fossil-fuel industry to the tune of nearly $31bn per year, according to a new analysis. That figure, calculated by the environmental campaign group Oil Change International, has more than doubled since 2017. And it is likely a vast understatement, due to the difficulty of quantifying the financial gains from some government supports, and to a lack of transparency and reliable data from government sources, the group says.

These handouts pose a massive barrier to decarbonization, says the new report, which experts have long warned is urgently necessary to avert the worst consequences of the climate crisis. “These subsidies allow for new production that would not otherwise occur,” said Collin Rees, US program manager at Oil Change International and the primary author of the new analysis. “They also, to an enormous extent, go to lining the pockets of shareholders and investors and fossil fuel executives.”

For the analysis, Oil Change International totaled up tax breaks, lower rates to acquire land and other resources, direct appropriations, and other financial support from the US and government-funded groups, using the definition of fossil fuel subsidies established by the World Trade Organization.

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Among the biggest supports for the oil industry in the megabill are expanded credits for carbon capture and a lowering of already sub-market royalty rates for coal, oil and gas production on public lands. Those enhanced supports could end up being even more valuable to the oil industry in later years, Rees says. Another provision in the bill, for which oil companies lobbied, can allow those companies to avoid the corporate minimum tax which Biden established during his presidency.

Redirecting all US fossil-fuel subsidies to social programs could vastly improve life for ordinary Americans, the report says, for instance by providing 3 million families with Snap benefits annually, helping 54 million households install solar panels within a decade, or sending 3 million children to Head Start early learning programs.

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https://www.theguardian.com/environment/2025/sep/09/fossil-fuels-subisidies-study