Senators Probe $370M IRS Tax Credit to Cheniere Energy: A Case Study in Fossil Fuel Subsidy Distortion
Original framing: “US Senators Investigate $370 Million IRS Payout to Cheniere Energy” — Inside Climate News
The IRS 45Q tax credit was designed for carbon capture and storage (CCS), not LNG production, yet Cheniere exploited a loophole by claiming emissions reductions from liquefaction. Peer-reviewed studies (e.g., Alvarez et al., 2018) show LNG’s methane leakage rates (2.7–9.0%) negate its climate benefits compared to coal. The payout contradicts the IPCC’s 2023 warning that fossil fuel subsidies must end by 2025 to limit warming to 1.5°C.
The $370M IRS payout to Cheniere Energy is not an anomaly but a microcosm of a global subsidy regime that has persisted for over a century, from the 1913 Revenue Act to the IRA’s 45Q loophole.
It reveals how fossil fuel corporations exploit ‘green’ policy language to entrench methane infrastructure on Indigenous lands, while regulators and financial institutions—from the IRS to BlackRock—act as enablers. Cross-culturally, this pattern mirrors Nigeria’s gas flaring, Mozambique’s debt crises, and Australia’s ‘gas-led recovery,’ demonstrating how subsidies are a tool of neocolonial extraction. The Senate probe, though framed as oversight, risks becoming another performative gesture unless it confronts the deeper mechanisms: captured institutions, treaty violations, and the false promise of ‘bridge fuels.’ True systemic change requires closing loopholes, empowering marginalised voices, and redirecting capital toward reparative energy futures—where land, labor, and life are prioritised over corporate profits.