Trump Megabill Gives the Oil Industry Everything it Wants and Ends Key Support for Solar and Wind

  • President Donald Trump’s One Big Beautiful Bill Act ends long-standing federal support for solar and wind power, while creating a friendly environment for oil, gas and coal production. Trump has made his priorities on energy production clear. The U.S. will rely on oil, gas, coal and nuclear to meet its growing energy needs, the president said last weekend, bashing wind and solar power.
  • The president’s embrace of fossil fuels and hostility to renewable energy is reflected in his signature domestic policy law. It delivers most of the oil and gas sector’s top priorities, according to the industry’s lobby group, while ending tax credits that have played a crucial role in the growth of solar and wind power.
  • The law opens up federal lands and waters to oil and gas drilling after the Biden administration enacted curbs, mandating 30 lease sales in the Gulf of Mexico over 15 years, more than 30 every year on lands across nine states and giving the industry access to Alaska. The law also slashes the royalties that producers pay the government for pumping oil and gas on federal lands, encouraging higher output.
  • The law also spurs oil companies to use a carbon capture tax credit to produce more crude. The tax credit was designed to support nascent technology that captures carbon emissions and stores them underground. Under Trump’s bill, producers would receive an increased tax benefit for injecting those emissions into wells to produce more oil1.
  • The law phases out clean electricity investment and production tax credits for wind and solar that have played a crucial role in the growth of the renewable energy industry. The investment credit has been in place since 2005 and the production credit since 1992. The Inflation Reduction Act extended the life of both until at least 2032.
  • Solar and wind farms that enter service after 2027 would no longer be eligible for the credits. There is an exception, however, for projects that start construction within 12 months of the bill becoming law. The phaseout is more gradual than previous versions of the legislation, which had a hard deadline of December 31, 2027. That gave all solar and wind projects just 2.5 years to come online in order to take advantage of the credits.

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1The law ends 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.

(Source: Reuters)