Behind closed doors, fossil fuel giants walked away with billion-dollar tax breaks—while clean energy got left in the dust.
When former President Donald Trump signed the “One Big Beautiful Bill” into law on July 4, 2025, the headlines focused on sweeping tax cuts and culture-war victories. But behind the scenes, a quieter power player walked away with jaw-dropping gains: the oil lobby.
Fossil fuel giants and their well-funded allies successfully embedded industry-friendly provisions deep in the bill’s 1,200 pages—many of which received little to no media attention. From royalty relief to tax loopholes disguised as climate policy, these carve-outs added up to billions in savings for companies already posting record profits.
While clean energy initiatives were scaled back, Big Oil tightened its grip on U.S. energy policy without ever holding a press conference. Here’s a breakdown of the nine biggest wins oil lobbyists secured in Trump’s 2025 tax overhaul—and why most Americans never saw them coming.
1. Oil Companies Get Huge Tax Breaks for Using Carbon Capture to Pump More Oil
The bill extends and expands tax credits for carbon capture technologies under the 45Q program. While these credits support the development of carbon capture as a climate strategy, they are also applicable to enhanced oil recovery (EOR), a process where captured CO₂ is injected into oil fields to increase production. This dual use means companies can receive financial benefits linked to carbon capture while simultaneously increasing oil extraction.
Critics argue this dual purpose complicates the climate benefits of such credits, as boosting oil recovery leads to more fossil fuel production and associated emissions. Supporters contend this approach provides an important economic incentive for carbon capture deployment, which remains an emerging and costly technology.
2. Tax Code Tweaks Help Oil Giants Pay Even Less—Despite Huge Profits
Changes to the AMT structure in the bill may offer tax relief opportunities for large corporations, including fossil fuel firms, through revised deductions and income reclassifications. These changes allow companies to better manage their tax liabilities by capitalizing on complex accounting provisions, reducing the effective tax rates they pay despite high profits.
This reflects a broader trend in corporate taxation where industries with significant resources and legal expertise optimize tax positions more aggressively than smaller businesses. Policymakers continue to debate how such provisions affect tax fairness and whether they encourage investment or disproportionately benefit well-established sectors like oil and gas.
3. Offshore Drillers Get to Keep More Profits by Paying Less to the Government
The bill includes a provision reducing royalty payments owed by oil companies for offshore drilling operations, particularly in the Gulf of Mexico. Royalties are payments made to the federal government in exchange for extracting natural resources on public lands and waters, serving as a source of public revenue. Supporters argue that lowering royalties incentivizes increased domestic energy production, supports jobs in coastal regions, and enhances energy security.
Conversely, critics contend that this reduction diminishes federal income from public resources and may over-subsidize profitable companies, shifting financial burdens onto taxpayers. The technical nature and placement of this provision resulted in limited public and legislative scrutiny prior to the bill’s passage.
4. A Last-Minute Change Gave Oil Companies a Tax Trick Worth Millions
A late-stage amendment reinstated more generous depletion allowances, allowing fossil fuel producers to deduct a portion of income based on extracted reserves. This tax provision is designed to reflect the decreasing value of finite natural resources as they are extracted, akin to depreciation for equipment.
However, critics argue that lifting previous caps or limits can encourage overproduction, distort market signals, and contribute to increased fossil fuel supply beyond demand needs. This allowance also gives companies significant tax savings regardless of actual extraction costs, raising concerns about its fairness and environmental impact.
5. New Legal Shields Protect Oil Companies If Their “Innovations” Go Wrong
The bill provides certain legal protections for companies developing innovative energy technologies like carbon capture, hydrogen blending, and advanced extraction methods. These protections aim to reduce regulatory risks and encourage investment by limiting companies’ financial liability if pilot projects encounter operational issues or environmental impacts.
Industry advocates emphasize that this encourages innovation by providing certainty and minimizing legal obstacles. However, environmental and community groups express concern that such protections may reduce accountability and raise risks for nearby populations if incidents occur, underscoring the need for clear regulatory oversight and safeguards.
6. Clean Energy Funding Was Cut to Boost Pipelines and Oil Projects
Funding for some renewable energy initiatives, electric vehicles, and biofuels was scaled back or redirected toward traditional energy infrastructure such as pipelines and refineries. Proponents of these changes argue that an energy mix reflecting current market realities and infrastructure needs is essential for stable energy supply and economic growth.
On the other hand, clean energy advocates warn that reducing incentives will slow the transition toward decarbonization and could delay critical climate goals by a decade or more. This shift signals a policy prioritization favoring fossil fuels, even as the broader energy sector undergoes rapid change toward renewables.
7. Big Oil Donated Millions to Lawmakers Right Before the Bill Passed
In the months preceding the bill’s passage, political action committees associated with the fossil fuel industry increased contributions to key legislators involved in tax and energy policymaking. Such financial support is standard practice in U.S. politics but raises questions about the influence of corporate money in shaping policy outcomes.
Observers point to the timing and targeting of these contributions as indicative of strategic efforts to secure favorable provisions. Proponents argue that industries have a right to advocate for their interests, while critics highlight the potential for disproportionate influence undermining public interests and democratic accountability.
8. Oil Company Insiders Helped Write the Law That Benefits Their Industry
Former oil company employees and consultants served in advisory roles to congressional committees responsible for drafting portions of the bill. This reflects a broader practice of incorporating industry expertise into policymaking, intended to bring technical knowledge to complex issues.
While such collaboration can improve policy design and feasibility, it also raises ethical questions about conflicts of interest, transparency, and the balance of power between private interests and public policymakers. Greater disclosure and safeguards are often called for to ensure that legislation reflects a broad range of stakeholder concerns.
9. Environmental Groups Were Shut Out of the Final Negotiations
Environmental groups were reportedly excluded from some late-stage discussions during the bill’s development, with lawmakers citing time constraints and procedural decisions. This reduced the diversity of input during critical phases and drew criticism from climate and clean energy advocates seeking a more inclusive and transparent process.
The exclusion highlights challenges in balancing rapid legislative timelines with broad stakeholder engagement, especially on complex issues involving competing economic and environmental priorities. Advocates argue that more inclusive processes lead to better, more equitable policies and strengthen public trust.