(Bloomberg) – The spending bill that House Democrats passed on Friday and sent to the Senate calls for the largest investment ever in the fight against climate change: $ 555 billion in energy clean, electric vehicles and resilience to global warming.
The White House said the bill, which faces an uncertain fate in the Senate, puts the United States on track to meet ambitious climate goals that include a 50% to 52% reduction in gas emissions. greenhouse effect below 2005 levels by 2030 and a reduction of 100%. electricity sector without carbon pollution by 2035.
This would impose charges for the first time on methane emissions – a potent greenhouse gas – from the oil and gas sector, while banning oil drilling in most U.S. waters and the Arctic National Wildlife Refuge in Alaska.
While mainstream environmental groups applauded the bill, it was lambasted by activists for failing to repeal oil industry tax breaks and for providing billions in subsidies that would extend the lifespan of power plants. charcoal through carbon capture projects. A plan to force utilities to generate electricity using clean energy sources, and to impose fines on those who do not, was scrapped after opposition from the West Virginia senator Joe Manchin, a tie-breaking Democratic Senate vote.
“The Build Back Better Act will be the biggest investment ever in climate action, restoring natural resources, resilience and revitalizing communities, clean water and air, and well-paying jobs since the New Deal “said Collin O’Mara, President and CEO. of the National Wildlife Federation.
Republicans called the legislation “socialist,” saying it would lead to higher electricity bills and offer tax breaks to millionaires.
Here is an overview of the contents of the invoice:
Tax credits to stimulate investment in clean energy
By far the largest component of climate spending – some $ 300 billion – will go to increasing tax credits for renewable energy, biofuels and energy efficiency. The credits could accelerate investments in clean energy at utility and residential levels, as well as in electricity transmission, energy storage and manufacturing.
Included are an increase in tax credits for utilities and other facilities that use carbon capture technologies, and new tax credits for energy storage, transmission projects, hydrogen production and electricity from existing nuclear reactors which could provide a lifeline for ailing factories.
Biofuel credits would be extended and new credits created for sustainable aviation fuel. Popular credit going back to the Obama administration would be restored to manufacturers of wind turbines, solar panels, fuel cells and other clean energy equipment.
In a twist, after five years, energy tax credits would be reduced to a handful for electricity and transportation that would be distributed on a sliding scale based on the emission reductions. This could present transition risks for beneficiaries.
Electric vehicle incentives to boost sales and unionized jobs
Detroit automakers could offer an additional $ 4,500 in tax credits to U.S. buyers of electric cars, up to $ 12,500 for U.S.-made vehicles with unions.
Under the bill, a consumer tax credit of $ 7,500 would be made refundable and would increase by an additional $ 4,500 for cars assembled in the country by factories represented by unions. An additional $ 500 bonus would be added for vehicles using US-made batteries.
A new advantage in the legislation creates a tax credit of $ 4,000 for the purchase of used electric vehicles.
Hundreds of millions of dollars would also be used to install charging systems for electric vehicles and $ 3.5 billion to the Department of Energy for subsidies for the national production of electric and hydrogen vehicles. The General Services Administration would get $ 3 billion for the purchase of electric vehicles for government fleets. And the U.S. Postal Service is reportedly getting nearly $ 6 billion for the purchase of electric postal trucks and charging infrastructure, a move that traders have seen as positive for Loveland-based electric vehicle maker Workhorse Group Inc. Ohio.
A separate infrastructure bill, enacted this week by President Joe Biden, would distribute $ 7.5 billion for electric vehicle chargers.
Oil drilling banned in ANWR in Alaska, new offshore sites
The Democrats’ spending envelope would block oil drilling in Alaska’s Arctic National Wildlife Refuge and new offshore drilling in most US waters.
The legislation would ban the sale of new oil and gas concessions in Pacific and Atlantic waters as well as in the eastern Gulf of Mexico. It would also scrap a four-year-old requirement that the government sell rights to drill on the Arctic Refuge Coastal Plain while canceling nine leases issued in that region of northeast Alaska earlier this year.
The rental would still be carried out in the central and western Gulf.
The oil and gas industry has criticized legislation passed by the House. Its oil and gas provisions “are nothing more than punitive measures,” said National Ocean Industries Association president Erik Milito.
“These include arbitrary new charges that would add millions of dollars in annual operating costs, by pricing US production,” he said.
Methane discharge fees imposed on oil and gas companies
The package would force oil and gas companies to pay for the first time ever excess methane leaks from wells, storage sites and pipelines. Fees of up to $ 1,500 per tonne would be imposed on an array of oil and gas infrastructure on the emission of methane, which pound for pound has more than 80 times the heat-trapping power of carbon dioxide and is responsible for a quarter of global warming production.
The provision could, however, be watered down or deleted in the Senate.
The legislation would also impose new fees on the oil and gas industry, including a “resource conservation fee” of $ 4 per acre per year for all new onshore and offshore oil and gas production leases and $ 6. $ per acre, per year “Speculative Lease Fee” for all new unproductive onshore and offshore oil and gas concessions.
It would also create annual fees of up to $ 10,000 per mile on offshore pipelines and increase royalty rates for all new oil and gas leases.
Funding to create the Civilian Climate Corps
The legislation would provide billions of dollars to create a Civilian Climate Corps that could put hundreds of thousands of Americans to work to prevent forest fires, restore wetlands, cover abandoned oil wells, and make homes more fuel efficient. energy.
The program, which is said to be modeled after the Civilian Conservation Corps of the New Deal era, has high-level champions who see it as both an economic and environmental development plan.
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