IRS IG Report Confirms What We Know -- Oil Companies are Misusing Taxpayer Funds
This week, the U.S. Treasury Inspector General for Tax Administration (TIGTA) issued a report on the implementation of the 45Q tax credit for carbon capture, storage and enhanced oil recovery. Senator Bob Menendez (NJ), senior member of the Senate Finance Committee requested the investigation after a 2018 report by Clean Water Action called attention to possible discrepancies in 45Q tax credits and the monitoring, reporting and verification that is required to validate that injected CO2 is securely stored underground. In response to the investigation, which found nearly $1 billion in tax credits, most of which were claimed improperly by oil companies, Clean Water Action issued the following statement:
“The Inspector General has confirmed what we found two years ago -- oil companies have gamed the system to take advantage of the 45Q tax credit without demonstrating secure storage of carbon dioxide. This tax credit has been billed as a climate solution, but it’s really just another subsidy. Oil companies using taxpayer funds to bankroll activities that put our water at risk.
This is malpractice and it demonstrates bad faith by the oil industry. The 45Q tax credit is a huge handout, which is why Congress needs to reject all oil industry bailout requests in Covid-19 relief legislation. Furthermore, it’s time to separate carbon capture incentives from oil production by ending the use of the 45Q tax credit for enhanced oil recovery.
Thanks to Senator Menendez for his inquiry and for demanding that the IRS take action to hold these oil companies accountable."
Clean Water Action’s research into Enhanced Recovery, the only oil and gas production method regulated by the Safe Drinking Water Act, has revealed a lack of oversight, knowledge and awareness of the risks the practice poses to underground sources of drinking water.
Since our founding during the campaign to pass the landmark Clean Water Act in 1972, Clean Water Action has worked to win strong health and environmental protections by bringing issue expertise, solution-oriented thinking and people power to the table. We will protect clean water in the face of attacks from a polluter friendly Administration. www.cleanwateraction.org