This is especially true in light of the bill that House Republicans just passed, which would fundamentally reorder federal funding priorities. This legislation makes billions in cuts through multiple committees—including appropriations for food assistance, student loans, Medicaid, and climate change programs. The very long legislation is over 1,100 pages long. As such, the Inflation Reduction Act represents a huge policy direction pivot that will likely reshape the American energy economy and social safety nets for decades.
The newly approved bill replaces the previously proposed three-year phase-down schedule with a five-year extension of energy project tax breaks. This change moves up the schedule for initiating these projects significantly. The law mandates that projects be under construction within 60 days of the bill’s enactment. If so, they will be eligible to receive any continued assistance. Big renewable energy advocates are freaking out about this provision. It risks undermining the incentives for wind and solar that President Biden’s bipartisan climate law laid out just last year.
The new law provides for a number of thrilling financial allocations. Currently, natural gas pipeline developers can pay a $10 million fee, paid for by taxpayers, not developers, to fast-track their permitting process. Additionally, applicants seeking to establish liquefied natural gas export sites can now pay a $1 million fee to be deemed in the “public interest.” Without question, all these measures show that the focus here is prioritizing fossil fuel infrastructure rather than the continuation of investment in renewable energy.
The bill’s passage has garnered enthusiastic support from former President Donald Trump, who referred to it as “arguably the most significant piece of legislation that will ever be signed in the history of our country.” Trump’s endorsement emphasizes the legislation’s potential impact on traditional energy production, which includes provisions supporting increased mining, drilling, and other fossil fuel extraction activities.
This would be legislative recognition of what various stakeholders have derided as a dangerous and misguided shift. Lisa Murkowski of Alaska, along with Senators John Curtis of Utah, Thom Tillis of North Carolina, and Jerry Moran of Kansas, expressed concern that the bill “could lead to significant disruptions for the American people and weaken our position as a global energy leader.” They pointed out the unique kind of uncertainty capital allocators and long-term project planners today face in the world of energy.
The legislation takes aim at gutting clean energy tax credits passed by Democrats 3 years ago. These credits have been lauded for their role in providing billions of dollars in new investments in American energy resources. Christy Goldfuss remarked, “These credits are delivering billions of dollars in new investments in homegrown American energy—creating jobs, lowering energy costs and addressing the climate crisis that is fueling floods, fires and heat waves.”
At its height, the bill called for the sale or transfer of up to 460,000 acres of federal land in Nevada and Utah. This made things even trickier in an already difficult environment. This proposal faced major pushback from Republican members—most notably Montana’s Ryan Zinke—which resulted in this provision being stripped from the final version. Zinke argued, “Once the land is sold, we will never get it back.” Meanwhile, Mark Amodei of Nevada remains interested in exploring avenues for local governments or private entities to acquire federal lands in his state.
The Administration’s move away from prioritizing renewables and back towards fossil fuel production has been met with horror from environmental advocates. Tracy Stone-Manning criticized the bill for its potential environmental repercussions, stating, “By opening hundreds of millions of acres to drilling, mining and logging to pay for tax cuts for the wealthy, this bill harms the tens of millions of people who like to hike, recreate or find solace in the outdoors.”
