Fact Sheet: 5 Hidden Ways the Government Rigs the Market in Favor of Fossil Fuels

The Trump administration has used claims of renewables subsidies to slash clean energy support and attack climate action. However, analysis from the Center for American Progress shows that oil, gas, and coal have cumulatively received nearly three times the amount of direct federal tax subsidies as solar and wind across the course of American history—not counting the many indirect subsidies they have received via land acquisition, permitting, government services, and unmitigated pollution costs. Through the passage of the Big Beautiful Bill and other actions, the Trump administration has doubled down on fossil fuel subsidies, propping up polluting energy while blocking cheaper, cleaner alternatives.

These subsidies don’t result in meaningful benefits for everyday Americans, because fossil fuel subsidies don’t lower energy bills; they boost corporate profits. It is estimated that 75 to 96 percent of the top subsidies’ value goes to increasing profits rather than supply. Meanwhile, wind and solar are the cheapest sources of electricity, yet billions of taxpayer dollars are being used to tilt the playing field in favor of polluting oil, gas, and coal.

The report highlights five key ways the government rigs the market for fossil fuels:

1. Direct financial subsidies

• U.S. fossil fuel direct subsidies are estimated at $29.4 billion annually—enough to pay for the annual utility bills of 17.2 million Americans.
• Fossil fuels have been receiving tax breaks for more than 100 years. Cumulatively, this adds up to almost $549 billion—nearly three times as much money as wind and solar have received.

2. Land acquisition

• From 2001 to 2020, 28 percent of all federal land leased for oil and gas was issued through noncompetitive leasing, a process through which leases that previously didn’t receive bids are offered at a much lower cost—on average, $562 less per acre, or a 99.5 percent discount.
• Even after they acquire land, fossil fuel companies pay less in production fees. Solar developers pay 20 times more in fees than oil and gas companies for the same amount of energy.
• These policies create an uneven system that stunts the build-out of renewables on public lands while fossil fuel extraction proliferates: Just 4 percent of currently operating renewable energy generation occurs on public lands, compared with 11 percent of natural gas, 12 percent of oil, and 40 percent of coal production.

3. Permitting

• The government has created significant permitting loopholes for fossil fuel industries. One example is a National Environmental Policy Act exclusion for oil and gas that allows expedited permit review on public lands but does not apply to clean energy projects.
• The Trump administration has weaponized the permitting process to slow renewable development: Solar and wind permits have been stifled by requirements for high-level review, and federal wind permits have been paused since early 2025.
• While it takes an average of 18 months to permit an interstate natural gas pipeline, it takes an average of 4.3 years—and, in some cases, up to 11 years—to permit interstate power lines that are needed to transport electricity.

4. Government services

• The U.S. government provides numerous services that reduce costs for fossil fuel companies. These companies benefit from heavily subsidized use of federal waterways, roads, and ports while paying fees that fall short of covering maintenance and infrastructure costs
• U.S. taxpayers also bear the burden of military operations that protect overseas oil and gas interests and secure shipping routes, such as in large-scale deployments off the coast of Venezuela to secure “cooperation” on oil extraction.

5. Ignored pollution costs

• Fossil fuel companies are largely absolved from paying for pollution and other costs to public health and the environment. Cleanup and reclamation of oil and gas wells would cost between $2.9 billion and $17.7 billion by one estimate, with company-funded decommissioning bonds covering just 6.5 percent of that total. This means communities would be left with the costs of cleaning up industry’s mess, along with the long-term health, environmental, and financial risks of abandoned wells.
• Burning fossil fuels causes negative health impacts—such as increased risk of asthma, cancer, and premature death—the costs of which are pushed from fossil fuel companies onto the general public. In 2023, the International Monetary Fund estimated that eliminating fossil fuel subsidies globally would avoid 1.6 million premature deaths annually and raise government revenues by $4.4 trillion.

Conclusion

Fossil fuels have received preferential treatment from the government for more than 100 years, and the Trump administration has only made these handouts bigger. These actions threaten reliability and drive up energy costs for Americans.