U.S. Department of Energy (DOE), U.S. Environmental Protection Agency (EPA), Federal Energy Regulatory Commission (FERC)

The following titles, parts, and sections of the Code of Federal Regulations (CFR), along with relevant sections of the Tax Code, should be modified to close regulatory loopholes and end subsidies that distort fair market competition in the energy sector: 10 CFR Part 205 – Energy Conservation Program Targeted Provisions: Provisions related to oil and gas market manipulation. Rescission Focus: Modify provisions in Part 205 to eliminate loopholes that allow oil and gas market manipulation. Ensure that the program no longer enables practices that distort market competition by promoting unfair advantages to fossil fuel producers. 40 CFR Part 98 – Greenhouse Gas Reporting Program Targeted Provisions: Provisions related to fossil fuel extraction and emissions reporting loopholes. Rescission Focus: Modify reporting provisions under 40 CFR Part 98 to close loopholes that allow fossil fuel extraction facilities to avoid full emissions reporting. Ensure that all emissions, both direct and downstream, are captured accurately and transparently, promoting accountability in emissions reporting. 18 CFR Part 284 – Interstate Natural Gas Pipeline Rates and Market Regulations Targeted Provisions: Market manipulation and gas pipeline pricing regulations. Rescission Focus: Modify regulations under 18 CFR Part 284 that allow market manipulation and unfair pricing practices in the interstate natural gas pipeline market. Restore fair competition by ensuring that gas pipeline rates and market activities are transparent, non-manipulative, and reflect actual supply and demand. Tax Code Section 45Q – Carbon Capture and Storage (CCS) Subsidies Rescission Focus: Rescind subsidies under Section 45Q that provide tax incentives for carbon capture and storage (CCS) when used in fossil fuel production. Modify the subsidy program to ensure that public funds are not used to support the continued use of fossil fuels, but rather focus on clean energy solutions.

Fossil Fuel Industry Subsidies and Market Protection Provisions

The fossil fuel industry has benefited from overwhelming subsidies and regulatory protections that distort energy markets, artificially propping up oil and gas prices while hindering the transition to cleaner, more efficient energy sources. These regulatory benefits include taxpayer-funded subsidies, lax environmental regulations, and market interventions that disproportionately benefit large corporations at the expense of consumers and the environment. Rescinding these distortions will level the playing field, promote competition, and accelerate the transition to sustainable energy systems while ensuring fair market pricing and reducing environmental harm.

U.S. Department of Energy 1000 Independence Avenue, SW Washington, DC 20585

U.S. Department of Energy Office of Public Affairs Phone: (202) 586-5000 Email: publicaffairs@hq.doe.gov

Since the 1950s, the oil and gas industry has been subsidized through a series of direct and indirect financial supports, including tax breaks, government-funded infrastructure, and favorable regulatory treatment. These practices have created a rigged energy market, where fossil fuel prices are artificially inflated, competition is stifled, and the development of clean energy alternatives is slowed. Key provisions include tax credits for oil and gas drilling, carbon capture and storage (CCS) incentives, and favorable land-use regulations that allow drilling in ecologically sensitive areas. Additionally, market regulation loopholes in areas like pipeline pricing and gas rate manipulation exacerbate price fluctuations and drive up costs for consumers.

Rescinding these subsidies and regulatory protections will ensure that energy markets are driven by true supply and demand dynamics, fostering innovation, competition, and the adoption of cleaner energy technologies. Ending fossil fuel subsidies will reduce taxpayer burden, level the playing field for renewable energy sources, and help shift investment toward sustainable, environmentally responsible industries. Further, eliminating market distortions will promote more equitable pricing, reduce carbon emissions, and create economic opportunities in emerging sectors like green energy and energy efficiency.

Oil and Gas Subsidies: All provisions granting subsidies to the fossil fuel industry, including tax credits and direct government funding for drilling and exploration, will be rescinded. Provisions related to CCS tax credits (Section 45Q) will be removed, and fossil fuel companies will no longer receive taxpayer-funded incentives for carbon capture or sequestration. Regulatory Protections: Loopholes in market pricing regulations for natural gas pipelines and oil extraction processes will be closed. The FERC will no longer allow oil and gas companies to use market manipulation tactics to artificially inflate energy prices or limit competition. Environmental Standards: Lax environmental regulations on oil and gas extraction, including weak permitting processes for drilling in ecologically sensitive areas, will be strengthened to ensure fair, sustainable development. Environmental impact assessments (EIA) will be mandatory for all fossil fuel projects.

Chris Wright

Secretary of Energy