USA Senate Passes Inflation Reduction Act

USA Senate Passes Inflation Reduction Act
The U.S. Senate has passed the Inflation Reduction Act of 2022.

The U.S. Senate has passed the Inflation Reduction Act, which will now head to the U.S. House Of Representatives.

Commenting on the Senate passing of the act, U.S. Senator Joe Manchin stated, “for years, I have worked across the aisle to determine the most effective way to increase domestic energy production, lower energy and healthcare costs, and pay down our national debt without raising costs for working Americans - the Inflation Reduction Act is the product of that work”.

“By investing in American energy production and innovative technologies the U.S. is on a path toward energy security, lower gas and home energy prices and we are leading the fight on global climate. By ensuring fairness in our federal tax code so that the largest and most profitable corporations pay their fair share, we can begin to get our financial house in order while protecting working Americans and small businesses,” he added.

“I look forward to seeing the U.S. House of Representatives pass this important legislation and President Biden quickly signing it into law. We are moving full steam ahead on comprehensive bipartisan permitting reform so we can efficiently and safely bring more domestic energy projects online. Congress will pass that legislation next month,” Manchin went on to say.

On July 27, Senate Majority Leader Chuck Schumer and Manchin issued a joint statement announcing an agreement to add the Inflation Reduction Act of 2022 to the FY2022 Budget Reconciliation bill and vote in the Senate.

In a statement on August 7, U.S. President Joe Biden said, “I want to thank Leader Schumer and every member of the Senate Democratic caucus for supporting this bill”. 

“It required many compromises. Doing important things almost always does. The House should pass this as soon as possible and I look forward to signing it into law,” Biden added.

Earlier this month, Arantza Alonso, Verisk Maplecroft’s senior Americas analyst, told Rigzone that Kyrsten Sinema, the U.S. Senator for Arizona, was the key to passing the Schumer-Manchin reconciliation bill. Alonso had warned, however, that Schumer and Manchin’s “secret negotiations did not include her, placing the bill’s passage at odds”.

When asked what the bill means for the oil and gas industry, Alonso said “tying the expansion of renewables to oil and gas leasing for the next decade guarantees the future of the sector”.

Mixed Reaction

Commenting on the Inflation Reduction Act in a statement posted on August 6, American Petroleum Institute (API) President and CEO Mike Sommers said, “this package falls short in addressing America’s energy needs”.

“While we’re encouraged that the bill will likely open the door to more federal onshore and offshore lease sales and will expand and extend tax credits for carbon capture, we remain opposed to policies that raise taxes and discourage investment in U.S. oil and natural gas,” he added.

“Glaringly absent in the bill is permitting reform, which is required for America’s infrastructure needs and to bolster critical oil, natural gas and renewable supplies to meet our current and future energy demand. We urge Congress to take up and pass permitting reform without delay,” Sommers went on to say.

National Ocean Industries Association President Erik Milito said, “we extend our thanks to Senator Manchin for his leadership in securing an all-of-the-above energy package that boosts offshore oil and gas, offshore wind, and carbon capture and storage - all key priorities for the offshore sector and for long-term American energy security”.

“No legislation is perfect, and the Inflation Reduction Act certainly reflects compromises, but American offshore energy is an issue of national, and global, consequence,” Milito added.

American Exploration and Production Council (AXPC) CEO Anne Bradbury said, “while the Senate failed to address concerns with the IRA that will hurt American energy producers and drive-up energy costs for the American people, the House has an opportunity to protect American competitiveness by voting ‘No’ on this bill”.

“Provisions of the ‘Inflation Reduction Act’ – including the methane fee, the book minimum tax, and federal lands provisions – will raise energy costs for the American people, hurt our nation’s competitiveness, and threaten our nation’s energy security,” Bradbury added.

Heather Zichal, the CEO of the American Clean Power Association, applauded the Senate for passing the Inflation Reduction Act.

“This is the vote heard around the world. It puts America on a path to creating 550,000 new clean energy jobs while reducing economy-wide emissions 40 percent by 2030. This is a generational opportunity for clean energy after years of uncertainty and delay,” Zichal stated.

“The IRA will lower consumer costs, enhance grid reliability, and strengthen the nation’s energy security. It will expand our domestic manufacturing base, inject nearly half a trillion dollars into U.S. GDP over the next decade and create more than half a million new jobs – more than doubling today’s clean energy workforce,” Zichal added.

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