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.

What’s In The Senate Version Of The Big Beautiful Bill?

The Senate has passed its version of President Trump’s big beautiful bill (BBB), which maintains tax credits for hydrogen, carbon capture, nuclear energy, and geothermal, boosts onshore and offshore drilling, weakens fuel economy regulations, delays a methane emissions fee, and speeds up environmental reviews for paying companies, but makes less funds available for refilling the Strategic Petroleum Reserve than the House version. The Senate removed a proposed excise tax on wind and solar projects, which was to be levied based on their compliance with strict sourcing requirements. It also phases out wind and solar tax credits that the Inflation Reduction Act of 2022 (IRA) had expanded. Wind and solar projects would still be eligible for tax credits as long as they begin construction by June 2026 or are placed in service by the end of 2027. The “start construction” language was added when it passed on July 1 and provides the subsidy to projects that have gone through planning, finance or other early “construction” steps, but may not be ready to produce power by the end of 2027.

The House provision that requires energy facilities to be placed in service by 2027 to qualify for wind and solar subsidies would have meant the end of Biden’s Green New Scam during Trump’s term, but the “start construction” clause that was added allows any facility that meets the lax “in construction” standard to receive an extra four years to qualify for 10 years of subsidies. If the Senate version passes, the Treasury Department could provide language that reduces the four-year safe harbor and makes the “in construction” requirement stricter by, for instance, requiring continuous construction rather than just beginning construction.

Other Energy Provisions in the Senate Version of the BBB

Electric vehicle tax credits would end at the end of September, which would have allowed car owners to lower the purchase price of electric vehicles by as much as $7,500. Credits for charging infrastructure would end in June 2026. A tax incentive for metallurgical coal and a credit for nuclear energy facilities built in areas with large nuclear power employment would be created. The Senate legislation would also mandate more onshore and offshore drilling, zero out penalties for fuel economy standards, and delay the fee on methane leaks from oil and gas production that was in Biden’s IRA for 10 years. It would also accelerate National Environmental Policy Act reviews for companies that pay a fee, but other permitting provisions in the House version were cut from the bill.

The Senate bill cut the amount of money for oil purchases to replenish the Strategic Petroleum Reserve (SPR) to $171 million from $1.3 billion in the House bill, which is only enough to buy about 3 million barrels instead of 20 million barrels at today’s prices. Former President Joe Biden conducted several sales from the SPR, including 180 million barrels, the most ever, to keep oil and thus gasoline prices low during the mid-term election in 2022. Those sales left the SPR at its lowest level in 40 years. Biden had scheduled 15.8 million barrels of deliveries to the SPR from January through May, but only 8.8 million of that has been delivered due to maintenance on the reserve that the Biden administration knew was needed. The Senate kept a House measure to cancel seven million barrels in congressionally-mandated SPR sales. The SPR has almost 403 million barrels, 45% less than the 727 million barrels it held in 2009.

One of the Senate’s versions of the BBB would have imposed an excise tax on wind and solar projects completed after December 31, 2027, if they could not prove that they do not contain any Chinese components. It targeted projects that use rare earth minerals from “Foreign Entities of Concern” — countries or companies deemed problematic. This provision primarily affects rare earths from China, which has a near monopoly on these minerals. Global supply chains for wind and solar components rely almost entirely on Chinese rare earth minerals. Thus, to avoid the tax, developers would have had to demonstrate that their solar and wind projects do not violate material assistance rules, which is likely to have been impossible to demonstrate.

An amendment to the bill was offered by Iowa Senator Joni Ernst that would allow projects that begin construction over the next few years to receive at least a partial tax credit, rather than allowing the credit for only projects that begin producing electricity in the next few years. The Ernst amendment also removed the excise tax on future solar and wind projects if they contain Chinese components. According to the Energy Information Administration, Iowa ranks first in generating the largest share of power from wind among U.S. states.

Conclusion

The Senate has passed a version of the Big Beautiful Bill that maintains tax credits for hydrogen, carbon capture, nuclear energy, and geothermal, boosts onshore and offshore drilling, weakens fuel economy regulations, delays a methane emissions fee, and speeds up environmental reviews for paying companies, but makes less funds available for refilling the Strategic Petroleum Reserve than the House version. The Senate bill phases out wind and solar tax credits that had been broadened by Biden’s Inflation Reduction Act of 2022, but it is less stringent than the House bill. Wind and solar projects would still be able to get tax credits as long as they start construction by June 2026 or are placed in service by the end of 2027. The Senate bill removed a proposed excise tax on wind and solar projects, which was to be levied based on their compliance with strict sourcing requirements, affecting rare earths obtained from “Foreign Entities of Concern,” such as China.


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

Big Beautiful Bill Headed to President’s Desk

WASHINGTON DC (7/3/25) – The U.S. House of Representatives gave final passage to H.R.1, the One Big Beautiful Bill Act, today. This legislation now heads to the President’s desk for his signature.

Significant provisions of the bill include:

  • Permanently extends the Tax Cuts and Jobs Act
  • Repeals the electric vehicle tax credit
  • Places significant restrictions on the energy subsidies embedded in the Inflation Reduction Act
  • Rescinds unobligated Inflation Reduction Act funds
  • Repeals the Greenhouse Gas Reduction Fund
  • Pauses the IRA natural gas tax for a decade
  • Requires the Bureau of Land Management to hold quarterly leases
  • Reduces royalty rates to pre-Inflation Reduction Act levels

American Energy Alliance President Tom Pyle released the following statement:

“We commend Congress for passing this legislation and look forward to President Trump’s signature. With this bill’s passage, Congress is delivering much-needed tax relief to millions of working families and goes a long way towards putting an end to the misguided Biden-era IRA, which has made our energy more expensive and less reliable.  

“Eliminating the EV tax credit marks a major win for those of us who have been advocating for years that consumer choice—not government mandates—should shape the American auto market. Congress deserves praise for ending these subsidies, which were largely out of step with the priorities of the American people. The measure also creates new opportunities for energy production on federal lands and stops the flow of federal dollars to green special interest groups.  

“And while the bill fell short of fully repealing the IRA, it does end solar and wind subsidies after a 2027 ‘placed in service’ cutoff. Unfortunately, the bill includes a loophole as projects committing 5% of costs within 12 months qualify as ‘under construction’ and get a 4-year extension. This enables projects started by July 2026 to receive subsidies through July 2030, and many lasting an additional 10 years. The Trump administration should limit this by tightening Treasury rules—shortening the safe harbor and requiring continuous construction, not just initial construction–to ensure the solar and wind lobby don’t continue to game the system at taxpayer expense.”

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The Unregulated Podcast #236: I’ll Handle the Finances

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna cover the latest news from President Trump’s One Big Beautiful Bill and what it means for the future of Biden’s Green New Scam.

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AEA Calls on House of Representatives to Remain Firm on Ending the Green New Deal

WASHINGTON DC (07/01/2025) – This morning, the U.S. Senate passed H.R.1, the One Big Beautiful Bill Act. The vote was 51-50, with Vice President J.D. Vance casting the tie-breaking vote. The bill will now return to the House of Representatives where a vote is expected on Wednesday.

Notably, the final Senate version of the bill grants a full tax credit to wind and solar projects that start construction within one year of the law’s enactment, without setting a deadline for when they must be connected to the grid. Projects that begin construction after that one-year window must be placed in service by the end of 2027 to qualify for the credit.

American Energy Alliance President Tom Pyle released the following statement:

“We recognize and commend Congress for taking the initial steps to scale back excessive government support for costly and unreliable energy sources. The Senate’s version of H.R. 1 reins in some of the more damaging energy provisions from the Inflation Reduction Act (IRA). However, serious concerns remain about the bill’s structure—especially the risk of loopholes that could undermine the promised phaseout of wind and solar subsidy programs.

“We urge the House not to rush this process to meet an arbitrary July 4th deadline as lawmakers have a crucial opportunity to reinforce America’s commitment to free markets and dependable energy. Before this bill reaches the president’s desk, it must fully dismantle the framework of the Green New Deal.”

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AEA and CEI Joint Letter to the Senate on Passing IRA Subsidy Reform Through the One Big Beautiful Bill

On Monday, June 30th the American Energy Alliance, along with the Competitive Enterprise Institute, sent a joint letter to the Senate urging senators to uphold President Trump’s campaign commitment to eliminate all remaining energy subsidies from the Inflation Reduction Act (IRA), which he aptly has called the “Green New Scam.” The text of the letter is available below.


Dear Senator:

In 2022, Democrats passed a radical plan to change how Americans use and consume energy. This plan was contained in the Inflation Reduction Act (IRA), a reconciliation bill that did not get a single Republican vote in the House or Senate.

Republicans and other lawmakers concerned about energy affordability and reliability now have a chance to undo the numerous IRA provisions that advance this radical Green New Deal agenda. Quite simply, the only way to undo the Green New Deal is to dismantle the “green” subsidies within the IRA.

Our organizations sought stronger language to undo the IRA subsidies than what is in the current Senate reconciliation bill (H.R. 1). However, we recognize that the existing language reflects compromise to get the One Big Beautiful Bill across the finish line. It may not be ideal, but the language is a strong effort to undo what President Trump rightly calls the “Green New Scam,” and for that, lawmakers should be commended.

Unfortunately, some Senators want to weaken the text in the Senate bill by undermining efforts to dismantle the IRA subsidies such as the requirement that projects be “placed in service” by the end of 2027 in order to qualify for certain tax credits. This is unacceptable and we strongly encourage you to reject any amendment that weakens the existing IRA related language in the most recent Senate draft.

These subsidies, among other problems, would continue to force our country towards a mix of unreliable sources of electricity (e.g. wind and solar) that would severely threaten our nation’s electricity grid. Americans need reliable and affordable electricity, not handouts to special interests at the expense of the electricity needs of Americans.

For once, the interests of Americans appear to be taking priority over the interests of the swamp. We encourage you to ensure that this does not change. This can only happen if Senators reject amendments that weaken the current language in H.R. 1.

Sincerely,

Daren Bakst
Director, Center for Energy and Environment
Competitive Enterprise Institute

Thomas Pyle
President
American Energy Alliance

Senate’s Version of Big Beautiful Bill Vastly Improved, Needs Some Clarity

WASHINGTON, DC (6/28/25) – The Senate may begin voting as soon as today on a revised version of H.R.1, the One Big Beautiful Bill Act. In May, the House passed this legislation, prioritizing energy security and affordability by eliminating most of the costly green energy subsidies and wasteful green grants to outside organizations.

American Energy Alliance President Tom Pyle released the following statement:

“The Senate version of the Big Beautiful Bill released today, while falling short of the House-passed bill, is vastly improved from a previously released version. Compared to the House, the Senate version extends the sunset timelines on wind and solar subsidies and leaves some questions with respect to the foreign entity and transferability provisions. These will still need to be answered. Nonetheless, we applaud the Senate for moving in the right direction, especially for terminating the electric vehicle tax credits.

“If, as supporters of the IRA are complaining, repealing these subsidies will ‘kill’ their industry, then maybe it shouldn’t exist in the first place. Extending green giveaways on the backs of American taxpayers is shortsighted and neglectful. It’s time for Congress to deliver both energy reliability and the largest tax cut in history to President Trump and the American people.”

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AEA Launches Six-Figure Advocacy Initiative: End the IRA Credits in the One Big Beautiful Bill

WASHINGTON DC (6/24/25) – Today, the American Energy Alliance launched a six-figure advocacy initiative in Utah, Alaska, Idaho, and the District of Columbia. The ads target key Senators in the debate over eliminating the Inflation Reduction Act’s (IRA) energy subsidies in the reconciliation bill.

In May, the House passed the “Big, Beautiful” reconciliation bill, prioritizing energy security and affordability by eliminating most of the costly green energy subsidies and wasteful green grants to outside organizations. While it falls short of full repeal of the egregious IRA subsidies, it does dismantle numerous Biden-era climate and energy programs. These programs are projected to cost taxpayers between $936 billion and $1.97 trillion over the next decade, with potential liabilities reaching up to $4.7 trillion by 2050.

As the Senate takes up this legislation, Senators John Curtis (R-Utah) and Lisa Murkowski (R-Alaska) are working to maintain these subsidy programs despite their initial opposition to the Inflation Reduction Act in 2022.

Additional ads praise Senator Mike Lee (R-Utah) for his leadership in fully eliminating the subsidies and urge Senator Mike Crapo (R-Idaho), the Chairman of the Senate Finance Committee, to use his leadership role to fight to eliminate these costly subsidy programs.

AEA President Tom Pyle issued the following statement:

“The American people were sold a bill of goods with the Inflation Reduction Act — a trillion-dollar boondoggle of subsidies and handouts for special interests under the guise of climate policy.

“We applaud the House for taking a stand and urge the Senate to finish the job. Lawmakers like Senators Lee and Crapo understand that real energy security means ending reckless spending and restoring market-driven solutions to our nation’s energy challenges.

“Senators Curtis and Murkowski both opposed the original IRA because they knew it would lead to higher energy prices and compromise the reliability of the energy grid in their state. So why are they now working so hard to preserve these costly and unnecessary programs? 

“It’s time for the Senate to put taxpayers first and dismantle the IRA’s green subsidy machine.”



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Coalition Letter to President Trump: Don’t Let Congress Preserve the Green New Scam

On Monday, June 23rd a coalition of twenty-six individuals and organizations dedicated to preserving free markets and putting taxpayers and consumers first, led by the American Energy Alliance, sent a letter to President Trump urging him to encourage Congress to uphold his campaign commitment to eliminate all remaining energy subsidies from the Inflation Reduction Act (IRA), which he aptly has called the “Green New Scam.” The text of the letter and list of signers is available below.


June 23, 2025

The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear President Trump:

As part of your commitment to achieving American energy dominance, you promised to eliminate burdensome regulations and put an end to the Inflation Reduction Act (IRA), which you aptly identified as the “Green New Scam.” While your administration has made significant progress toward this goal, much of the work necessary to fulfill your campaign promise involves eliminating ALL of the Biden-era energy subsidies in the One Big Beautiful Bill.

The House of Representatives has gone a long way. While not completely phasing out the entire IRA, the recently passed H.R. 1 significantly amends most of the credits by accelerating the phase-outs to completely expire before you leave office, places tighter restrictions on prohibited foreign entities, and repeals the transferability of many of the credits. 

Unfortunately, the working draft of the Senate bill falls considerably short. While the overall structure aligns with the House, several energy-related provisions represent notable setbacks. Unlike the House version – which imposed strict deadlines for green energy projects – the Senate draft extends eligibility. Projects that commence construction by 2027 now benefit from a four-year “safe harbor,” making them eligible for tax credits through 2031. Because the Production Tax Credit (PTC) lasts for 10 years, wind and solar projects could receive federal subsidies through 2040 – well beyond your term in office. It also alters the House’s strong definition of prohibited foreign entities, essentially allowing for more foreign ownership by those involved in projects. Finally, it retains the electric vehicle tax credit for certain manufacturers. 

More troublesome, we have seen reports that some senators would like to weaken the House provisions even further than what is already in the working draft.

History shows long phase-outs are really extensions of bad policies that raise electricity prices and threaten to destabilize the grid. Take the wind production tax credit (PTC), for example. Originally set to expire in 1999, it has been extended repeatedly—in 1999, 2002, 2004, 2005, 2006, 2008, 2009, 2012, 2014, 2015, 2016, 2019, and again in 2021. A phase-down was introduced in 2016, reducing the credit’s value gradually over five years, yet the IRA revived and expanded the PTC once more. This clearly demonstrates that phasing down subsidies often leads to repeated extensions rather than true elimination.

We urge you to call on your Republican colleagues in Congress, particularly in the Senate, to repeal all of the IRA’s energy tax credits immediately—not rely on slow and uncertain phase-outs that history shows are unlikely to succeed. At the very least, the Senate should not weaken the strong language that has already passed the House of Representatives. It’s time for Congress to pass the One Big Beautiful bill to create jobs and grow the economy for American families and deliver on your promise to end former President Biden’s Green New Scam.

Sincerely,

Thomas Pyle
President
American Energy Alliance

Phil Kerpen
President
American Commitment

Carla Sands
U.S. Ambassador to the Kingdom of Denmark (ret.)

Daren Bakst
Director, Center for Energy and Environment
Competitive Enterprise Institute

Marlo Lewis
Senior Fellow, Energy and Environmental Policy
Competitive Enterprise Institute

David Stevenson
Director, Center for Energy and Environment
Caesar Rodney Institute

Paul Gessing
President
Rio Grande Foundation

Seton Motley
President
Less Government

Andre Beliveau
Senior Manager of Energy Policy
Commonwealth Foundation

Diana Furchtgott-Roth
Director, Center for Energy, Climate, and Environment
Heritage Foundation

Derrick Max
President and CEO
Thomas Jefferson Institute for Public Policy

Cameron Sholty
Government Relations Director
Heartland Impact

Paul Craney
President
Massachusetts Fiscal Alliance

John Droz
Physicist
Alliance for Wise Energy Decisions

Craig Richardson
President
Energy & Environment Legal Institute

Daniel C. Turner
Founder & Executive Director
Power The Future

Frank Lasee
President
Truth in Energy and Climate

Rea S. Hederman Jr.
Vice President of Policy
Buckeye Institute

James Taylor
President
The Heartland Institute

E. Calvin Beisner, Ph.D.
President
Cornwall Alliance for the Stewardship of Creation

Myron Ebell
Chairman
American Lands Council

Sarah Montalbano
Policy Fellow
Center of the American Experiment

Jenny Beth Martin
Honorary Chairman
Tea Party Patriots Action

Amy O. Cooke
President and Chairman of the Board
Always On Energy Research

Jason Hayes
Director of Energy & Environmental Policy
The Mackinac Center for Public Policy

Benjamin Zycher
Senior Fellow
American Enterprise Institute
(Affiliation for identification purposes only)


CC:

Senate Majority Leader John Thune
United States Senate SD-511
Washington, DC 20510

Senate Majority Whip John Barrasso
307 Dirksen Senate Office Building
Washington, DC 20510

Chair of the Senate Republican Conference Tom Cotton
326 Russell Senate Office Building
Washington, DC 20510

Chair of the Senate Republican Policy Committee Shelley Moore Capito
170 Russell Senate Office Building
Washington, DC 20510

Speaker Mike Johnson
521 Cannon House Office Building
Washington, DC 20515

House Majority Leader Steve Scalise
266 Cannon HOB
Washington, DC 20515

House Majority Whip Tom Emmer
326 Cannon House Office Building
Washington, DC 20515

Chair of the House Republican Conference Lisa McClain
562 Cannon House Office Building
Washington, DC 20515

Chairman of the House Republican Policy Committee Kevin Hern
171 Cannon HOB
Washington, DC 20515

AEA-Led Coalition to President Trump: Don’t Let Congress Preserve the Green New Scam

WASHINGTON DC (6/23/25) – Today, a coalition of twenty-six individuals and organizations dedicated to preserving free markets and putting taxpayers and consumers first sent a letter to President Trump urging him to encourage Congress to uphold his campaign commitment to eliminate all remaining energy subsidies from the Inflation Reduction Act (IRA), which he aptly has called the “Green New Scam.”

The coalition, led by the American Energy Alliance, commends the progress made by the House of Representatives through the passage of H.R. 1, which significantly curtails many IRA-related tax credits and imposes tighter restrictions on foreign entities. However, the coalition is deeply concerned that the Senate’s working draft falls short, potentially extending key green energy tax credits into the next decade and beyond.

AEA President Tom Pyle issued the following statement:

“We are urging President Trump to ensure Senate Republicans match or exceed the House’s reforms and push for the full elimination of all Biden-era energy subsidies in the One Big Beautiful Bill.”

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