Updated subsidy estimates for 45Q, Master Limited Partnerships and the Strategic Petroleum Reserve

This memo provides updated subsidy estimates and background information on three subsidies benefiting the oil and gas industry. These include 45Q tax credits for carbon capture, utilization and storage (CCUS); tax exemptions for Master Limited Partnerships (MLPs), used heavily by the oil and gas sector; and the federal Strategic Petroleum Reserve. The memo also highlights an emerging risk area: the use of tax-exempt corporate structures for carbon sequestration activities. The material was prepared in support of Paying for Climate Chaos: U.S. Federal Subsidies to Fossil Fuel Production, published by Oil Change International in September 2025. 

Note that the memo predates passage of the OBBA budget reconciliation bill. OBBA increased subsidy rates for 45Q tax credits and expanded eligibility for tax-exempt master limited partnerships into new areas. The financial impact of those changes is included in the Oil Change report.