WASHINGTON – Today, Representative Mike Carey (OH-15) introduced the Promoting Domestic Energy Production Act, which allows energy companies to deduct costs, including labor and safety, associated with oil and gas exploration. The bipartisan bill is co-led by Rep. Vicente Gonzalez (TX-34).
“Affordable energy, produced here at home, will bring down costs and prevent America’s reliance on our foreign adversaries. We need to eliminate roadblocks to domestic energy production, starting by restoring common-sense tax deductions that every other industry is allowed to utilize,” said Carey.
“Our country must be ready to face the energy challenges of the next few decades,” said Gonzalez. “This commonsense bipartisan bill promotes our nation’s domestic energy production capabilities – ensuring we keep and create American jobs, lower energy prices, and decrease our dependence on foreign energy sources.”
Tax deductions for energy exploration, known as intangible drilling costs, have been included within the U.S. tax code since its inception. Oil and natural gas exploration is a time and resource-intensive process with significant financial risks. For instance, 85% of all costs associated with oil exploration and well development are in the form of labor and safety standards.
However, the Inflation Reduction Act limited the ability of energy companies to deduct intangible costs and depreciating assets. The Promoting Domestic Energy Production Act allows companies to consider intangible drilling costs when calculating their income for tax purposes.
“Allowing for the fair treatment of intangible drilling costs is not only a matter of sound policy but also an important tool for encouraging the continued development of domestic energy. Rep. Carey & Rep. Gonzalez’s bill, the Promoting Domestic Energy Production Act, would ensure that energy producers can continue to make investments in their communities that drive job growth and can continue to provide the American people with affordable, reliable, and ever-cleaner energy,” said Anne Bradbury, President & CEO, American Exploration & Production Council.
“American voters sent a clear message in support of U.S. energy leadership, and this bipartisan legislation is critical to unleashing our nation’s abundant oil and natural gas resources,” API Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer said. “We applaud the efforts of Senator Lankford and Representatives Carey and Gonzalez to restore this pro-American energy provision in our tax code, and we urge Congress to pass the Promoting Domestic Energy Production Act to help deliver a stronger, more prosperous energy future for all Americans.”
The bill is co-sponsored by Representatives Nick Langworthy (NY-23), Michael Rulli (OH-6), Warren Davidson (OH-8), Dan Crenshaw (TX-2), Ryan Zinke (MT-1), Troy Balderson (OH-12), Marc Veasey (TX-33), Darin LaHood (IL-16), John Carter (TX-31), Dan Meuser (PA-9), Glenn Thompson (PA-15), Mary Miller (IL-15), Kevin Hern (OK-1), Claudia Tenney (NY-24), Carol Miller (WV-1), Roger Williams (TX-25), Henry Cuellar (TX-28), Wesley Hunt (TX-38), Tracey Mann (KS-1), Max Miller (OH-7), Tom Cole (OK-4), Randy Weber (TX-14), Dan Newhouse (WA-4), Addison McDowell (NC-6), Pat Fallon (TX-4), Beth Van Duyne (TX-24), Greg Murphy (NC-3), Jake Ellzey (TX-6), Brian Babin (TX-36), Gabe Evans (CO-8), Craig Goldman (TX-12), and Nicole Malliotakis (NY-11). Carey and Gonzalez previously introduced the bill in the 118th Congress.
Text of the Promoting Domestic Energy Production Act is available here.