Deductions for the depletion of oil shale deposits

Location in tax code: 26 U.S.C. § 613(b)(2)(B)

Amount saved by repealing: The U.S. Treasury would save $840 million between 2016 and 2026 by repealing the depletion deduction for all hard mineral fossil fuels, of which oil shale is one. The amount applying to oil shale alone is unknown.

Oil shale—located primarily in Utah and Colorado—is expensive to extract and process, is particularly harmful to the environment, and has yet to reach commercial scale in the United States. Despite these drawbacks, companies engaged in oil shale exploration and development can claim a 15 percent depletion allowance on income generated from these activities. Consequently, taxpayers are subsidizing environmentally harmful projects that are not needed, given high-levels of oil production elsewhere in the United States.

Exception to passive loss limitation for working interests in oil and natural gas properties

Location in tax code: 26 U.S.C. § 469(c)(3)

Amount saved by repealing: $310 million between 2016 and 2026

The passive loss limitation allows taxpayers to deduct losses from passive activities—business activities in which a taxpayer has an economic interest but does not materially participate—against income from those activities. If the deductions exceed the passive income, the taxpayer must carry the remaining loss over to the next tax year. This rule is intended to prevent investors from using investments as tax shelters. Certain oil and gas interests, however, are exempt from this limitation and can use passive losses to reduce taxes on other business income.

this is a small one but still a lot of money

Deductions for tertiary injectants

Location in tax code: 26 U.S.C. § 193

Amount saved by repealing: $100 million between 2016 and 2026

This tax deduction allows oil and gas companies to deduct the costs of using tertiary recovery methods, processes in which companies inject fluids and gases into older wells in order to recover additional oil. Companies can deduct the costs in the year they are incurred rather than when the expenditures generate income, thereby lowering their taxable income.

I am not sure on this one I would not necessarily call it a subsidy but more a favorable nod