End Polluter Welfare for Enhanced Oil Recovery Act of 2026

HR8108, introduced on March 26, 2026, and referred to the House Committee on Ways and Means, proposes significant changes to the Internal Revenue Code. Specifically, it seeks to eliminate the use of carbon oxide as a tertiary injectant for enhanced oil recovery (EOR) for facilities constructed after the bill's enactment date, by amending Section 45Q(f). Furthermore, the bill aims to repeal Section 43, which provides an enhanced oil recovery credit, and makes conforming amendments across several other sections of the tax code. This bill does not authorize or appropriate new funding. Instead, it proposes to remove existing tax credits, thereby increasing the tax burden and operational costs for companies engaged in enhanced oil recovery. The mechanism is a direct amendment to the Internal Revenue Code, eliminating specific tax incentives rather than creating new spending programs. Structural losers from this legislation would be companies heavily invested in or reliant on enhanced oil recovery techniques, particularly those that utilize carbon oxide as a tertiary injectant. These companies, including major integrated oil and gas producers and oilfield services providers, would face higher operating costs due to the loss of tax credits. The Presidential Memorandum on Domestic Petroleum Production, Refining, and Logistics Capacity, issued on April 20, 2026, aims to stimulate investment in domestic petroleum production. HR8108 directly conflicts with this executive action by removing a tax incentive that supports a specific method of domestic petroleum extraction, potentially making EOR less economically viable for new projects. This creates a contradictory policy environment where the executive branch is encouraging domestic production while a legislative effort seeks to remove a key financial incentive for a production method. As of April 22, 2026, HR8108 is in the early stages of the legislative process, having only been introduced and referred to committee. Its passage is uncertain, and it faces a complex path through the House Committee on Ways and Means. The bill is sponsored by Rep. Khanna (D-CA-17) and has 10 cosponsors, indicating support within a segment of the Democratic caucus.