The deal announced late Wednesday will spend nearly $370 billion over 10 years to boost electric vehicles, jump-start renewables like solar and wind, and develop alternative energy sources like hydrogen. The deal surprised lawmakers and activists who had given up hope the legislation could pass after West Virginia Sen. Joe Manchin said he could not support the measure because of inflation concerns. Clean energy tax credits and other provisions in the 725-page bill could “put the U.S. on track to reduce emissions by 31-44% below 2005 levels by 2030,” according to an analysis released late Thursday by the Rhodium Group, an independent survey. company. Additional actions by the Biden administration and Democratic-controlled states could “help close the remaining gap toward (Biden’s) goal of reducing emissions by 50-52 percent by 2030,” said Ben King, Rep. team manager. But passage of the bill is far from certain in a 50-50 Senate, where it will need support from every Democrat to overcome unanimous Republican opposition. Sen. Kyrsten Sinema, D-Ariz., who pushed for changes to earlier versions of the plan, declined to reveal her stance Thursday. In the closely divided House, Democrats cannot lose more than four votes and prevail in a likely party-line vote. But Biden called the bill “historic” and called for it to be passed quickly. “We will improve our energy security and address the climate crisis — by providing tax credits and investments for energy projects,” he said in a statement, adding that the bill “will create thousands of new jobs and help lower energy costs in the future. ″ Environmental groups and Democrats also welcomed the legislation. “This is an 11th-hour reprieve for climate action and clean energy jobs, and America’s biggest legislative moment for climate and energy policy,” said Heather Zichal, CEO of America’s Clean Power , of a clean energy group. “Passing this bill sends a message to the world that America is leading the way on climate, and it sends a message at home that we’re going to create more great jobs for Americans in this industry,” added Zihal, a former energy adviser to President Barack Obama. . Tiernan Sittenfeld, senior vice president of the League of Conservation Voters, summed up her reaction in just one word: “Wow!” Sen. Tina Smith, D-Minn., tweeted that she was “surprised, but in a good way.” Manchin, who chairs the Senate energy committee, insisted he had not changed his mind after telling Senate Majority Leader Chuck Schumer two weeks ago that he could not support the bill because of inflation concerns. “There should be no surprises. I’ve never walked away from anything in my life,” he told reporters on a Zoom call from West Virginia, where he is recovering from COVID-19. Manchin said he called the bill an opportunity “to really give us an energy policy with security that we need for our nation” while also reducing inflation and high gas prices. The bill, which Manchin called the “Inflation Reduction Act of 2022,” includes $300 billion in deficit reduction, as well as measures to lower prescription drug prices and expand subsidies to help Americans who purchase health insurance on their own. In addition to investing in renewable energy sources such as wind and solar, the bill includes incentives for consumers to purchase energy-efficient appliances such as heat pumps and water heaters, electric vehicles and rooftop solar panels. The bill creates a $4,000 tax credit for used electric vehicle purchases and up to $7,500 for new EVs. The tax credit includes income limits for buyers and caps on the sticker prices of new EVs — $80,000 for pickups, SUVs and trucks and $55,000 for smaller vehicles. A $25,000 limit will be placed on used vehicles. Even with the restrictions, the credits will help boost already growing electric vehicle sales, said Jessica Caldwell, senior analyst for Edmunds.com. Electric vehicles accounted for about 5% of new vehicle sales in the US in the first half of the year and are projected to reach as much as 37% by 2030. The bill also invests more than $60 billion in environmental justice priorities, including block grants to address disproportionate environmental and public health harms related to pollution and climate change in poor and disadvantaged communities. Beverly Wright, executive director of the Deep South Center for Environmental Justice, called the bill a step forward, but said she was concerned about tax breaks for “polluting industries” like coal, oil and gas. “We need bolder action to achieve environmental and climate justice for ourselves and future generations,” he said. The bill would set a fee on excess methane emissions from oil and gas producers, while providing up to $850 million in grants to the industry to monitor and reduce methane. The bill’s mix of tax incentives, grants and other investments in clean energy, transportation, energy storage, home electrification, agriculture and manufacturing “make this a real climate bill,” said Sen. Brian Schatz, D -Hawaii. “The planet is on fire. This is huge progress. Let’s do it”. But not all environmental groups were celebrating. The deal includes pledges from Schumer and other Democratic leaders to pursue reforms that Manchin called “necessary to unlock domestic energy and transportation projects,” including a controversial natural gas pipeline planned in his home state of Virginia. More than 90% of the proposed Mountain Valley Pipeline is complete, but the project has been delayed by legal battles and other issues. The pipeline should be “at the top of the pile” for federal approval, Manchin said, and is a good example of why reform is needed to speed up energy project approvals. Manchin, a longtime supporter of coal and other fossil fuels, said environmental reviews of such large projects should be completed within two years, rather than taking up to 10 years as is the current practice. “Other countries around the world – developed nations – are doing it extremely well and they’re doing it in a very short period of time. We should be able to do the same,” he said. While authorizing reforms would be considered in separate legislation, the budget deal would require the Interior Department to offer at least 2 million acres of public land and 60 million acres of offshore waters in the Gulf of Mexico and Alaska for oil and gas leasing each year . If Interior does not offer minimum lease amounts, the department will not be allowed to grant approvals for any utility-scale renewable energy project on public land or water. That requirement “is a climate suicide pact,” said Brett Hartle, director of government affairs at the Center for Biological Diversity, an environmental group. “It’s self-defeating to tie renewable energy development to massive new oil and gas extraction,” Hartle said, adding that the new fossil fuel lease required under the bill would “fan the flames of climate disasters burning our country.” . But an oil industry group called the bill punitive and inflationary. “We are very concerned about the potential negative impact of this bill on energy prices and American competitiveness, especially amid a global energy crisis and high inflation,” said Anne Bradbury, CEO of the American Exploration and Production Council, which represents independent oil. . and natural gas companies.
AP reporters Tom Krisher in Detroit and Drew Costley in Washington contributed to this story.
