The Unregulated Podcast #240: After the Wine Kicks In

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss what Congress is talking about while on break, the latest stories out of the People’s Republic of California, and forecasts for American energy production.

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Trump Orders Save American Industry From Biden Admin’s Regulatory Attacks

The Trump administration is exempting over 100 chemical manufacturing plants, oil refineries, coal plants, medical device sterilizers, and other companies from Clean Air Act rules set by the Biden administration, recognizing that “overly restrictive environmental regulations undermine America’s energy reliability, economic vitality, and national security.” The Trump administration issued four proclamations exempting the facilities from one of four rules for two years. The plan is that by the time the two-year exemptions expire, the rules in question may be removed by the Environmental Protection Agency (EPA). According to the White House, “The exemptions ensure that these facilities within these critical industries can continue to operate uninterrupted to support national security without incurring substantial costs to comply with, in some cases, unattainable compliance requirements.” Even the Biden administration had noted the disruption the rules would cause when it previously said it would consider exempting facilities from a rule to prevent disruptions to supply chains for medical devices.

Due to one of the proclamations, more than 50 chemical manufacturers and oil refineries are exempt from requirements to reduce emissions of certain chemicals, including ethylene oxide and chloroprene. Eight producers of taconite iron ore, used in making steel, are exempt from requirements to reduce mercury emissions by about 33%. These plants are needed in the production of semiconductors and energy. Six coal plants are also exempt from the more stringent restrictions on emissions of mercury, nickel, arsenic, and lead set by the Biden administration, joining 66 other coal plants previously exempted.

On May 7, 2024, Biden’s EPA published a final rule, titled National Emissions Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units Review of the Residual Risk and Technology Review, which amended the preexisting Mercury and Air Toxics Standards rule set by the Obama administration to make it more stringent. The Biden rule’s compliance date is July 8, 2027, three years after the rule’s effective date of July 8, 2024.  Because the rule requires compliance with standards based on emissions-control technologies that do not yet exist in a commercially viable form, President Trump issued the proclamation for coal plants that allows the exemptions.

In March, the EPA set up a portal allowing companies to request exemptions from nine Clean Air Act rules. Among those exempted are taconite iron ore plants in Minnesota owned by the United States Steel Corp. and six facilities owned by Cleveland-Cliffs Inc. in Minnesota and Michigan. Chemical makers, including Dow Inc. and BASF SE, and refiners such as Phillips 66 and Citgo Petroleum Corp., also received waivers from EPA regulations requiring emissions controls for certain facilities, allowing them to avoid massive capital investments for compliance or shutting down.

With the latest announcement, coal-fired power plants in Ohio, Illinois, and Colorado were exempted from Biden’s climate mandates limiting emissions of mercury. Other coal plants that received exemptions earlier are Montana’s Colstrip Generating Station, North Dakota’s Coal Creek Station, and the Oak Grove plant in Texas. The exemptions also apply to four plants operated by the Tennessee Valley Authority, the nation’s largest public utility. According to the EPA, the presidential exemptions “will bolster coal-fired electricity generation, ensuring that our nation’s grid is reliable, that electricity is affordable for the American people, and that EPA is helping to promote our nation’s energy security.”

President Trump issued executive orders to allow some older coal-fired power plants set for retirement to keep operating due to rising U.S. electricity demand from growth in data centers, artificial intelligence, and electric vehicles. Trump also directed his agencies to identify coal resources and prioritize coal leasing on federal lands, and to lift barriers to coal mining.

Analysis

Ideally, environmental regulations should not be subject to ad hoc exemptions on a firm-by-firm basis, as this undermines the rule of law and creates uncertainty for both industry and the public. Equal treatment under the law requires that all companies operate under the same set of rules, not temporary carveouts granted through executive discretion. Given that the current regulations are unworkable and reliant on nonexistent technologies, the EPA should move swiftly to revoke or revise them through proper administrative channels. Furthermore, Congress should act to codify a more balanced and technologically feasible standard, ensuring clarity, consistency, and long-term legal stability for energy producers and manufacturers alike.


*This article was adapted from content originally published by the Institute for Energy Research.

AEA’s Statement on EPA Draft Rule Withdrawing Endangerment Finding

WASHINGTON DC (7/29/25) – Today, the Environmental Protection Agency (EPA) issued its proposed rulemaking to withdraw the 2009 endangerment finding for greenhouse gases. Concurrently, the Department of Energy released a separate report on the state of climate science.

American Energy Alliance President Tom Pyle released the following statement:

“For a decade and a half, the EPA has used the ‘endangerment finding’ as authority to reject permits, shut down projects, and deny Americans access to reliable, affordable energy and transportation choice. It has reshaped investment and infrastructure to our country’s detriment and has been used as a vehicle to push a political agenda.

“The longstanding legal and scientific issues with the endangerment finding are finally going to be addressed under the leadership of President Donald Trump, EPA Administrator Lee Zeldin, and Secretary of Energy Chris Wright. Congress never granted EPA authority to regulate greenhouse gases under the Clean Air Act–legislation written specifically for harmful pollutants, not global emissions–and yet the endangerment finding has been used as a justification to repeatedly do exactly that.” 

AEA Experts Available For Interview On This Topic:

Additional Background Resources From AEA:

For media inquiries please contact:
[email protected]

AEA Unveils New Website to Empower Energy Advocates

WASHINGTON DC (7/22/25) – The American Energy Alliance (AEA) is proud to announce the launch of our newly refreshed website. This redesigned site offers improved navigation and an enhanced user experience, making it easier to access tools and resources to empower American energy consumers and policymakers. 

American Energy Alliance President Tom Pyle released the following statement:

“Our new web design is all about making it easier for visitors to find the information that they need on key energy policy issues. We’ve streamlined the design and made navigating information easier to help both the private citizens and policymakers who look to us for our analyses and research. By improving the way we deliver content, we are working in support of our mission of advancing policy in favor of free market solutions and affordable, reliable energy for all.” 

Key features of the new website include:

  • Improved Navigation: Easy access to research, policy updates, projects, and news.
  • Action Hub: Tools for grassroots engagement, including ways to contact elected officials and stay informed on key legislation.
  • Updated American Energy Scorecard: Our key tool for empowering the American people to hold their elected officials accountable for the decisions they make in Washington.

To explore the new site and learn more about the American Energy Alliance’s mission, visit www.americanenergyalliance.org.

AEA Experts Available For Interview On This Topic:

Additional Resources:

For media inquiries, please contact:
[email protected]

The Unregulated Podcast #238: The Circus

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the high-profile events shaping the internal politics of a certain subset of “Trump World” and the latest stories shaping international energy markets.

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Congress Finalizes Passage of Rescission Package

WASHINGTON DC (07/18/2025) – Late last night, the U.S. House finalized passage of President Trump’s proposal to rescind $9.4 billion in budget authority, H.R. 4, which includes the full $125 million appropriated for FY 2025 to the Clean Technology Fund (CTF). This legislation now heads to the President’s desk for signature.

American Energy Alliance President Tom Pyle released the following statement:

“Congratulations to President Trump and to the American taxpayers for yet another legislative win that reduces wasteful government spending. As we’ve said repeatedly, this is how government is supposed to work – the days of writing blank checks to pet projects with no accountability are over.

“While this package contains many necessary clawbacks, we are especially pleased to see the Clean Technology Fund (CTF) cut. The CTF, launched during the first Obama administration, has received over $3 billion from the United States since its inception, making the U.S. the largest donor to the fund by far. It has been sold as an ‘investment fund’ for clean technology, when in reality it is nothing more than a slush fund to subsidize the world’s energy experiments on the back of the American people.

“Through all of the debate in both the House and Senate on the rescission package, the cuts to CTF funding have remained, meaning the majority of Members in both Chambers recognize it for the boondoggle that it is. Enough is enough – the American people, and citizens around the world, deserve access to affordable, reliable energy, and the responsible stewardship of their hard-earned tax dollars, not ideologically driven schemes.”

AEA Experts Available For Interview On This Topic:

Additional Background Resources From AEA:

For media inquiries please contact:
[email protected]

What The One Big Beautiful Bill Means for American Energy

The “One Big Beautiful Bill Act” represents a sweeping overhaul of U.S. energy policy, aimed at reshaping the federal government’s role in energy markets and reversing key provisions of the Inflation Reduction Act. With a clear emphasis on fossil fuel production and energy independence, the legislation mandates new oil and gas lease sales across federal lands and offshore areas, revives tax advantages for producers, and loosens regulatory burdens that had previously constrained the industry. These changes signal a strategic pivot away from the Biden-era approach. The bill reflects a renewed focus on maximizing domestic energy output and scaling back federal support for clean energy technologies — all under the banner of strengthening U.S. economic and energy security. We examine how the legislation reshapes oil and gas production policy and the broader implications for energy markets and environmental goals.

Oil and Gas Production

The newly enacted One Big Beautiful Bill Act benefits the oil and gas industry by mandating new oil and natural gas lease sales across federal lands and waters, unlinking them from renewables leasing and restoring royalty rates to pre-Inflation Reduction Act (IRA) levels. The law also reinstates full deductions for intangible drilling costs, delays the methane emissions fee until 2035 — providing the industry with more time to prepare — and increases the carbon capture tax credit for producers that utilize carbon dioxide to increase oil recovery. Carbon capture and storage (CCS) diverts massive financial and energy resources to a strategy with uncertain storage integrity. Despite decades of investment and subsidies, current CCS projects capture only a tiny fraction of global CO₂, with high costs, major infrastructure demands, and strong public resistance to pipelines and storage, scaling CCS to meet carbon reduction goals is not economically efficient. 

President Biden’s signature climate bill, the Democrat-passed IRA, linked offshore oil and gas lease sales to those of offshore wind, and Biden’s five-year offshore lease plan for oil and gas called for only three offshore lease sales — the fewest offshore oil and gas leases in the industry’s history and far fewer than the 47 sales proposed by President Trump in his first term. Trump’s bill requires the federal government to augment that historically low number of sales under Biden’s 2024-29 leasing program for the U.S. Gulf of America (Mexico) with 30 additional offerings across the Gulf region over 15 years. One lease sale is required to take place by the end of the year, and Interior Secretary Doug Burgum has it planned for December 10, 2025. In fiscal year 2024, production from offshore leases accounted for approximately 14% of domestic oil production and 2% of domestic natural gas production, yielding $7 billion in federal revenues.

Nine U.S. states with material onshore federal acreage must hold over 30 quarterly lease sales every year, and lease sales are also mandated in Alaska’s National Petroleum Reserve. Mandated lease sales in Alaska’s Arctic National Wildlife Refuge, however, did not make it into the final bill. The bill reinstates royalty rates to their pre-IRA rate of 12.5%-16.7% and allows non-competitive bids, which the IRA had ended. The bill also allows producers to fully deduct intangible drilling costs, which encompass roughly 60%-80% of well costs. The IRA only allowed a portion of these costs to be deducted.

The law sunsets the hydrogen tax credit in 2028, later than previous versions of the bill. Chevron, Exxon, and others are investing in projects to produce hydrogen fuel.

Energy Intel has provided a useful chart of the key oil and gas provisions in the One Big Beautiful Bill Act:

Source: Energy Intelligence

Coal Industry 

The coal industry also benefits from the bill, which mandates that at least four million additional acres of federal land be made available for mining. The law also cuts the royalties that coal companies pay the government for mining on federal land, and allows the use of an advanced manufacturing tax credit for mining metallurgical coal used to make steel.

Renewable Energy Tax Credits

The law phases out clean electricity investment and production tax credits for wind and solar after decades of coverage. Originally intended for nascent industries, the investment credit was significantly enhanced in 2005, having been initially introduced in 1978 and having been extended 15 times. The production credit has been in place since 1992 and has been extended more than a dozen times. The IRA essentially made these credits unlimited since the requirement for sunsetting was based on heavy reductions of carbon dioxide emissions in the generation sector. The One Big, Beautiful Bill Act makes solar and wind projects that enter service after 2027 no longer eligible for the credits unless they start construction within 12 months of the bill becoming law.

Unfortunately, the bill includes a loophole as projects committing 5% of costs within 12 months qualify as “under construction” and get a four-year extension. This enables projects started by July 2026 to receive subsidies through July 2030, which in the case of the production tax credit would last for an additional 10 years. The Treasury Department could limit this loophole by tightening the “start construction” definition — shortening the safe harbor and requiring continuous construction, not just initial construction. The phaseout in the final bill is more gradual than previous versions of the legislation, which had a hard deadline of December 31, 2027, meaning solar and wind projects had to be producing power in 2.5 years to be eligible for the credits. A related tax credit for using U.S.-made components in solar and wind facilities ends for projects that enter service after 2027. A carveout allows projects that start construction within one year of the law’s enactment to claim the credit.

In response to the bill, on July 7, 2025, President Trump signed an executive order ending market-distorting subsidies for wind and solar energy, labeling them unreliable and overly dependent on foreign-controlled supply chains. The order directs the Treasury Department to revoke clean energy tax credits (sections 45Y and 48E), tighten eligibility rules, and implement stricter restrictions on foreign entities of concern — all within 45 days. Simultaneously, the Department of the Interior must review and revise any policies that give preferential treatment to renewables over more reliable, dispatchable energy sources like nuclear and fossil fuels. This action aligns with the administration’s broader goals of enhancing U.S. energy dominance, economic growth, and national security by prioritizing domestically controlled, dependable energy production.

Proponents of wind and solar subsidies often argue that these energy sources are inexpensive. They typically cite studies based on Levelized Cost of Electricity (LCOE), a metric that consolidates fixed and variable costs into a single figure. While LCOE is a useful tool for estimating generation costs, it has been widely criticized for overlooking the challenges of intermittency and non-dispatchability — factors that significantly affect the reliability and overall cost of renewable energy. Intermittency complicates cost comparisons between technologies, and LCOE fails to account for the expenses associated with delivering consistent, on-demand electricity. Once the cost of ensuring reliability is factored in — such as backup systems, storage, and grid integration — the price skyrockets. One peer-reviewed study estimates that incorporating reliability costs can increase the effective price of solar energy by 11 to 42 times, making it the most expensive source of electricity, followed by wind.

As others have pointed out, further evidence from the International Energy Agency (IEA) supports this concern. Data from nearly 70 countries reveal a strong correlation between higher shares of wind and solar in the energy mix and elevated electricity prices for both households and businesses. In countries with little or no wind and solar, electricity averages around 16 cents per kilowatt-hour (in 2024 Canadian dollars). For every 10% increase in wind and solar’s share, electricity prices rise by approximately eight cents per kWh.

The 2023 update of IEA’s Government Energy Spending Tracker shows that since 2020, governments have committed USD 1.34 trillion to clean energy investments. In the United States alone, Treasury data reveals that wind and solar subsidies dominate energy-related tax provisions. These subsidies cost taxpayers $31.4 billion in 2024 and were projected to total another $421 billion between 2025 and 2034, largely driven by the IRA. Since 2015, the 10-year cost of federal tax expenditures for wind and solar has increased twenty-one-fold. The investment tax credit (ITC) and production tax credit (PTC) — key drivers of wind and solar deployment — was expected to account for over half of all energy-related federal tax expenditures from 2025 to 2034. Notably, these figures exclude electric vehicle tax credits, which added another $14 billion in 2024 and were expected to reach $105.7 billion by 2034.

Despite massive public spending, the shift to wind and solar energy is driving up energy prices and contributing to accelerating deindustrialization, most notably in parts of Europe that have aggressively pursued these sources through extensive subsidy programs. Ultimately, if wind and solar were genuinely cost-effective and reliable alternatives to traditional energy sources, such extensive and sustained government support would be unnecessary. By slashing this government support, this legislation promotes a sensible approach to energy policy — one that carefully weighs costs, reliability, and economic impacts alongside environmental goals.

Electric Vehicle Tax Credits

The bill eliminates the $7,500 federal tax credit for new electric vehicle (EV) purchases and leases, as well as the $4,000 credit for used EVs, effective September 30. In our recent report, When Government Chooses Your Car, we argued that federal efforts to mandate a transition to EVs carry significant hidden costs and unintended consequences. These tax credits were part of a broader strategy to push EV adoption through policy rather than market demand.

EVs continue to be considerably more expensive than gasoline-powered vehicles, not only in terms of upfront cost but also insurance, maintenance, and the infrastructure required to support them. Meanwhile, consumer demand remains well below government adoption targets, as practical limitations like reduced range in cold weather and slow charging persist. With the pace and direction of technological innovation still uncertain, public policy should instead prioritize consumer sovereignty as the guiding principle in shaping the automobile market. Consumers have diverse needs and preferences and should be free to choose the vehicle — internal combustion, hybrid, electric, or future alternatives — that best meets their circumstances. Market forces, not government mandates, should determine the composition of the vehicle fleet.

Consumer choice sends critical signals to producers: strong demand drives innovation and supply, while weak demand encourages reassessment and improvement. When businesses must respond to consumer preferences, they compete on quality, price, and innovation, leading to better products and greater accountability. A market driven by consumer decisions ensures broad access to mobility, a hallmark of American life and economic strength for over a century. In this context, ending the EV tax credit marks a meaningful step toward restoring consumer choice and reinforcing the market’s role in determining the future of transportation.

Conclusion

The One Big Beautiful Bill Act marks a significant shift in U.S. energy policy, scaling back long-standing federal support for renewable energy and electric vehicles. By mandating new oil and gas lease sales onshore and offshore, delinking them from renewable lease requirements, restoring pre-IRA royalty rates, and reviving full deductions for intangible drilling costs, the legislation reorients energy policy away from net-zero goals. It also delays the methane emissions fee until 2035 and increases carbon capture tax credits, particularly for enhanced oil recovery applications.

The coal industry similarly gains from expanded access to federal land, reduced royalty payments, and access to tax credits intended for advanced manufacturing, including the production of metallurgical coal. Meanwhile, support for wind and solar is phased out, with key investment and production tax credits sunsetting after 2027, though a loophole could extend eligibility through 2030 for projects that commit early funds.

The repeal of EV tax credits further signals a policy pivot away from government-directed energy transitions toward a market-driven approach emphasizing consumer choice and economic competitiveness. Taken together, the bill reflects a broader priority shift: one that prioritizes energy reliability, domestic production, and government restraint over federally subsidized green energy expansion and net-zero targets.


*This article was adapted from content originally published by the Institute for Energy Research.

AEA’s Kenny Stein On Energy Provisions of The One Big Beautiful Bill Act

Currents is a weekly podcast produced by our sister organization the Institute for Energy Research (IER) that recaps the latest news from the world of energy and research from IER. Last week AEA’s Vice-President of Policy Kenny Stein, joined the show for a special episode reviewing the energy provisions of the recently passed One Big Beautiful Bill Act.

The Unregulated Podcast #237: Christmas in July

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna review the Trump administration’s early Christmas presents to the American People.

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What The One Big Beautiful Bill Means for American Energy

The “One Big Beautiful Bill Act” represents a sweeping overhaul of U.S. energy policy, aimed at reshaping the federal government’s role in energy markets and reversing key provisions of the Inflation Reduction Act. With a clear emphasis on fossil fuel production and energy independence, the legislation mandates new oil and gas lease sales across federal lands and offshore areas, revives tax advantages for producers, and loosens regulatory burdens that had previously constrained the industry. These changes signal a strategic pivot away from the Biden-era approach. The bill reflects a renewed focus on maximizing domestic energy output and scaling back federal support for clean energy technologies — all under the banner of strengthening U.S. economic and energy security. We examine how the legislation reshapes oil and gas production policy and the broader implications for energy markets and environmental goals.

Oil and Gas Production

The newly enacted One Big Beautiful Bill Act benefits the oil and gas industry by mandating new oil and natural gas lease sales across federal lands and waters, unlinking them from renewables leasing and restoring royalty rates to pre-Inflation Reduction Act (IRA) levels. The law also reinstates full deductions for intangible drilling costs, delays the methane emissions fee until 2035 — providing the industry with more time to prepare — and increases the carbon capture tax credit for producers that utilize carbon dioxide to increase oil recovery. Carbon capture and storage (CCS) diverts massive financial and energy resources to a strategy with uncertain storage integrity. Despite decades of investment and subsidies, current CCS projects capture only a tiny fraction of global CO₂, with high costs, major infrastructure demands, and strong public resistance to pipelines and storage, scaling CCS to meet carbon reduction goals is not economically efficient. 

President Biden’s signature climate bill, the Democrat-passed IRA, linked offshore oil and gas lease sales to those of offshore wind, and Biden’s five-year offshore lease plan for oil and gas called for only three offshore lease sales — the fewest offshore oil and gas leases in the industry’s history and far fewer than the 47 sales proposed by President Trump in his first term. Trump’s bill requires the federal government to augment that historically low number of sales under Biden’s 2024-29 leasing program for the U.S. Gulf of America (Mexico) with 30 additional offerings across the Gulf region over 15 years. One lease sale is required to take place by the end of the year, and Interior Secretary Doug Burgum has it planned for December 10, 2025. In fiscal year 2024, production from offshore leases accounted for approximately 14% of domestic oil production and 2% of domestic natural gas production, yielding $7 billion in federal revenues.

Nine U.S. states with material onshore federal acreage must hold over 30 quarterly lease sales every year, and lease sales are also mandated in Alaska’s National Petroleum Reserve. Mandated lease sales in Alaska’s Arctic National Wildlife Refuge, however, did not make it into the final bill. The bill reinstates royalty rates to their pre-IRA rate of 12.5%-16.7% and allows non-competitive bids, which the IRA had ended. The bill also allows producers to fully deduct intangible drilling costs, which encompass roughly 60%-80% of well costs. The IRA only allowed a portion of these costs to be deducted.

The law sunsets the hydrogen tax credit in 2028, later than previous versions of the bill. Chevron, Exxon, and others are investing in projects to produce hydrogen fuel.

Energy Intel has provided a useful chart of the key oil and gas provisions in the One Big Beautiful Bill Act:

Source: Energy Intelligence

Coal Industry 

The coal industry also benefits from the bill, which mandates that at least four million additional acres of federal land be made available for mining. The law also cuts the royalties that coal companies pay the government for mining on federal land, and allows the use of an advanced manufacturing tax credit for mining metallurgical coal used to make steel.

Renewable Energy Tax Credits

The law phases out clean electricity investment and production tax credits for wind and solar after decades of coverage. Originally intended for nascent industries, the investment credit was significantly enhanced in 2005, having been initially introduced in 1978 and having been extended 15 times. The production credit has been in place since 1992 and has been extended more than a dozen times. The IRA essentially made these credits unlimited since the requirement for sunsetting was based on heavy reductions of carbon dioxide emissions in the generation sector. The One Big, Beautiful Bill Act makes solar and wind projects that enter service after 2027 no longer eligible for the credits unless they start construction within 12 months of the bill becoming law.

Unfortunately, the bill includes a loophole as projects committing 5% of costs within 12 months qualify as “under construction” and get a four-year extension. This enables projects started by July 2026 to receive subsidies through July 2030, which in the case of the production tax credit would last for an additional 10 years. The Treasury Department could limit this loophole by tightening the “start construction” definition — shortening the safe harbor and requiring continuous construction, not just initial construction. The phaseout in the final bill is more gradual than previous versions of the legislation, which had a hard deadline of December 31, 2027, meaning solar and wind projects had to be producing power in 2.5 years to be eligible for the credits. A related tax credit for using U.S.-made components in solar and wind facilities ends for projects that enter service after 2027. A carveout allows projects that start construction within one year of the law’s enactment to claim the credit.

In response to the bill, on July 7, 2025, President Trump signed an executive order ending market-distorting subsidies for wind and solar energy, labeling them unreliable and overly dependent on foreign-controlled supply chains. The order directs the Treasury Department to revoke clean energy tax credits (sections 45Y and 48E), tighten eligibility rules, and implement stricter restrictions on foreign entities of concern — all within 45 days. Simultaneously, the Department of the Interior must review and revise any policies that give preferential treatment to renewables over more reliable, dispatchable energy sources like nuclear and fossil fuels. This action aligns with the administration’s broader goals of enhancing U.S. energy dominance, economic growth, and national security by prioritizing domestically controlled, dependable energy production.

Proponents of wind and solar subsidies often argue that these energy sources are inexpensive. They typically cite studies based on Levelized Cost of Electricity (LCOE), a metric that consolidates fixed and variable costs into a single figure. While LCOE is a useful tool for estimating generation costs, it has been widely criticized for overlooking the challenges of intermittency and non-dispatchability — factors that significantly affect the reliability and overall cost of renewable energy. Intermittency complicates cost comparisons between technologies, and LCOE fails to account for the expenses associated with delivering consistent, on-demand electricity. Once the cost of ensuring reliability is factored in — such as backup systems, storage, and grid integration — the price skyrockets. One peer-reviewed study estimates that incorporating reliability costs can increase the effective price of solar energy by 11 to 42 times, making it the most expensive source of electricity, followed by wind.

As others have pointed out, further evidence from the International Energy Agency (IEA) supports this concern. Data from nearly 70 countries reveal a strong correlation between higher shares of wind and solar in the energy mix and elevated electricity prices for both households and businesses. In countries with little or no wind and solar, electricity averages around 16 cents per kilowatt-hour (in 2024 Canadian dollars). For every 10% increase in wind and solar’s share, electricity prices rise by approximately eight cents per kWh.

The 2023 update of IEA’s Government Energy Spending Tracker shows that since 2020, governments have committed USD 1.34 trillion to clean energy investments. In the United States alone, Treasury data reveals that wind and solar subsidies dominate energy-related tax provisions. These subsidies cost taxpayers $31.4 billion in 2024 and were projected to total another $421 billion between 2025 and 2034, largely driven by the IRA. Since 2015, the 10-year cost of federal tax expenditures for wind and solar has increased twenty-one-fold. The investment tax credit (ITC) and production tax credit (PTC) — key drivers of wind and solar deployment — was expected to account for over half of all energy-related federal tax expenditures from 2025 to 2034. Notably, these figures exclude electric vehicle tax credits, which added another $14 billion in 2024 and were expected to reach $105.7 billion by 2034.

Despite massive public spending, the shift to wind and solar energy is driving up energy prices and contributing to accelerating deindustrialization, most notably in parts of Europe that have aggressively pursued these sources through extensive subsidy programs. Ultimately, if wind and solar were genuinely cost-effective and reliable alternatives to traditional energy sources, such extensive and sustained government support would be unnecessary. By slashing this government support, this legislation promotes a sensible approach to energy policy — one that carefully weighs costs, reliability, and economic impacts alongside environmental goals.

Electric Vehicle Tax Credits

The bill eliminates the $7,500 federal tax credit for new electric vehicle (EV) purchases and leases, as well as the $4,000 credit for used EVs, effective September 30. In our recent report, When Government Chooses Your Car, we argued that federal efforts to mandate a transition to EVs carry significant hidden costs and unintended consequences. These tax credits were part of a broader strategy to push EV adoption through policy rather than market demand.

EVs continue to be considerably more expensive than gasoline-powered vehicles, not only in terms of upfront cost but also insurance, maintenance, and the infrastructure required to support them. Meanwhile, consumer demand remains well below government adoption targets, as practical limitations like reduced range in cold weather and slow charging persist. With the pace and direction of technological innovation still uncertain, public policy should instead prioritize consumer sovereignty as the guiding principle in shaping the automobile market. Consumers have diverse needs and preferences and should be free to choose the vehicle — internal combustion, hybrid, electric, or future alternatives — that best meets their circumstances. Market forces, not government mandates, should determine the composition of the vehicle fleet.

Consumer choice sends critical signals to producers: strong demand drives innovation and supply, while weak demand encourages reassessment and improvement. When businesses must respond to consumer preferences, they compete on quality, price, and innovation, leading to better products and greater accountability. A market driven by consumer decisions ensures broad access to mobility, a hallmark of American life and economic strength for over a century. In this context, ending the EV tax credit marks a meaningful step toward restoring consumer choice and reinforcing the market’s role in determining the future of transportation.

Conclusion

The One Big Beautiful Bill Act marks a significant shift in U.S. energy policy, scaling back long-standing federal support for renewable energy and electric vehicles. By mandating new oil and gas lease sales onshore and offshore, delinking them from renewable lease requirements, restoring pre-IRA royalty rates, and reviving full deductions for intangible drilling costs, the legislation reorients energy policy away from net-zero goals. It also delays the methane emissions fee until 2035 and increases carbon capture tax credits, particularly for enhanced oil recovery applications.

The coal industry similarly gains from expanded access to federal land, reduced royalty payments, and access to tax credits intended for advanced manufacturing, including the production of metallurgical coal. Meanwhile, support for wind and solar is phased out, with key investment and production tax credits sunsetting after 2027, though a loophole could extend eligibility through 2030 for projects that commit early funds.

The repeal of EV tax credits further signals a policy pivot away from government-directed energy transitions toward a market-driven approach emphasizing consumer choice and economic competitiveness. Taken together, the bill reflects a broader priority shift: one that prioritizes energy reliability, domestic production, and government restraint over federally subsidized green energy expansion and net-zero targets.


*This article was adapted from content originally published by the Institute for Energy Research.