Sponsors (23)
The bill shifts tax and regulatory incentives away from fossil fuels to raise revenue, strengthen environmental safeguards, and increase transparency — but does so at the cost of higher taxes and compliance costs for energy firms, potential increases in energy and consumer prices, slower permitting for some projects, and localized economic harm to fossil-fuel workers and investors.
Federal taxpayers and the federal budget: the bill raises federal revenue by imposing new taxes (e.g., on Gulf OCS production) and removing some fossil-fuel tax preferences, which can fund priorities or reduce deficits.
Communities and public health: the bill shifts market incentives away from fossil-fuel production (by removing preferences and accelerated depreciation), which is likely to reduce greenhouse-gas emissions and related health harms over time.
Oil-spill responders and coastal communities: the Oil Spill Liability Trust Fund is strengthened by a 10¢/barrel financing rate, improving cleanup resources and readiness.
Energy consumers and workers in fossil-fuel regions: higher taxes and removal of tax preferences and accelerated depreciation will raise fossil producers' costs, likely increasing energy prices, reducing investment, and risking job losses in energy-dependent communities.
Oil, gas, coal firms and investors: loss of tax-favored treatment for partnerships, integrated companies, and property (including accelerated depreciation) will reduce after-tax returns and could depress asset values and investor returns.
Project developers, utilities, and local communities: repeal of expedited permitting provisions and restoration of stronger NEPA reviews may slow federal approvals, delay jobs and projects, and increase project timelines and costs.
Based on analysis of 11 sections of legislative text.
Eliminates many federal fossil‑fuel subsidies and incentives across leasing, tax code, credits, permitting, and financing, and orders agency reviews to identify remaining subsidies.
Introduced July 23, 2025 by Ilhan Omar · Last progress July 23, 2025
Ends a wide array of federal supports for fossil fuels by cancelling royalty relief and related leasing incentives, repealing and narrowing multiple tax benefits and credits for oil, gas, and coal, restricting certain international financing tied to fossil projects, and reversing several recent statutory changes that expanded fossil‑fuel permitting or subsidies. It also changes liability rules for certain oil releases, bars interest payments on royalty overpayments, and directs Treasury and other agencies to identify remaining federal subsidies and to review accelerated depreciation rules for fossil‑fuel assets. The law takes effect in stages: many changes apply after enactment (notably tax and leasing changes apply to taxable years/transactions or property placed in service after enactment), while a few specific provisions use dates such as Dec 31, 2025 or Jan 1, 2026 for applicability; agencies (Treasury, IRS, DOE) must produce reports within one year and publish identified determinations that can trigger further rule changes.