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HR 8108

End Polluter Welfare for Enhanced Oil Recovery Act of 2026

119th Congress Introduced by Nanette Barragán and 11 co-sponsors

The bill ends the Enhanced Oil Recovery credit and restricts carbon oxide use as a tertiary injectant, removing tax support for EOR and related CCS activities.

Introduced in House
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WeVote Research Nonpartisan
Bill Summary · HR 8108

Summary of Bill HR 8108 (118th Congress, 2nd Session) – End Polluter Welfare for Enhanced Oil Recovery Act of 2026

Note: This bill was introduced in March 2026 and would amend the Internal Revenue Code to end certain tax credits tied to carbon oxide use in enhanced oil recovery (EOR) projects.

1. Purpose and Intent

  • The bill aims to end “polluter welfare” by eliminating or restricting tax credits that support the use of carbon oxide in enhanced oil recovery.
  • Specifically, it seeks an end date for the credit for qualified carbon oxide used in EOR and to remove or change existing credits associated with carbon capture and storage (CCS) activities that subsidize oil recovery.

2. Key Provisions and Changes

A. End of Use of Carbon Oxide as Tertiary Injectant (New Provision)

  • Adds a new subsection to Section 45Q (the carbon oxide sequestration credit) titled “Elimination of Use of Carbon Oxide as Tertiary Injectant.”
  • Effective for facilities whose construction begins after the enactment date.
  • Under the new rule, for such new facilities, a specific subparagraph (a)(3)(B)(ii) will not apply. This effectively limits or ends favorable treatment for using carbon oxide as a tertiary injectant in new projects.
  • Effective date: Provisions apply to taxable years beginning after the enactment date of the Act.

B. Repeal/Elimination of the Enhanced Oil Recovery Credit (EOR Credit)

  • Repeals Section 43 (the Enhanced Oil Recovery credit) from Subpart D of Part IV of Subchapter A, Chapter 1 of the Internal Revenue Code.
  • This would remove the Internal Revenue Code credit specifically linked to enhanced oil recovery activities.

C. Conforming Amendments to Related Provisions

  • Makes sweeping conforming edits to ensure consistency with the repeal/limitation of EOR credits:
    • Strikes or revises references to the EOR credit in related code sections (e.g., Section 38(b)(6), Section 45I(b)(2)(B), Section 45K(b)(5)(A), Section 45Q, Section 196(c), Section 6501(m)).
    • Adjusts cross-references to reflect the absence or altered status of the EOR credit and the carbon oxide credit provisions as amended by this Act.
    • Reorganizes the internal section table to remove references to Section 43.

3. Who or What Would Be Affected

  • Taxpayers and entities that have relied on the Enhanced Oil Recovery (EOR) credit under Section 43.
  • Projects that involve the use of carbon oxide as a tertiary injectant for new facilities (construction beginning after enactment) would lose certain tax treatment.
  • Related tax provisions and compliance requirements tied to the EOR credit and carbon capture credits would be adjusted or repealed, impacting planning for CCS/EOR activities.

4. Procedural and Timeline Aspects

  • Introduction: March 26, 2026, in the House of Representatives.
  • Referral: Referred to the House Committee on Ways and Means.
  • Effective Dates:
    • The carbon oxide injectant elimination and other changes apply to tax years beginning after the date of enactment.
    • The changes to Section 43 (EOR credit repeal) also apply to tax years beginning after enactment.

5. Practical Implications

  • A shift away from subsidies that support carbon-capture-assisted oil recovery.
  • Potential impact on investments in EOR projects and CCS infrastructure, particularly those that would begin construction after enactment.
  • Administrative and compliance changes for taxpayers previously claiming the EOR credit or related carbon oxide credits.

6. Notable Details

  • Title: End Polluter Welfare for Enhanced Oil Recovery Act of 2026.
  • The bill explicitly expresses intent to end certain government subsidies linked to polluting activities by curtailing or extinguishing the EOR credit and related carbon oxide usage provisions.

This summary outlines the bill’s core aims, the principal policy changes, affected parties, and the timing of the proposed amendments. For stakeholders, key considerations include tax planning implications for EOR projects and potential shifts in investments toward non-subsidized recovery methods or alternative CCS strategies.

Compiled from official sources — confirm details with the bill’s official record.

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