Pro-Trump Oil Industry Asking Trump to Preserve Biden’s Climate Legislation

On August 16, 2022, President Biden signed the Inflation Reduction Act into law, marking one of the largest investments in the American economy, energy security, and climate that Congress has made in the nation’s history. The IRA has created opportunities to build projects, hire workers, and manufacture equipment needed to strengthen domestic supply, lower household energy costs all while reducing greenhouse gas emissions. Over $380 billion are being invested in a range of technologies.

In simple terms, the IRA has lowered health care costs – with Biden and Harris taking on “Big Pharma,” made the tax system fairer by making the wealthy pay their fair share of taxes and invested in America to create jobs and expand opportunity. Regarding the oil industry and the environment, the Environmental Protection Agency announced that all $27 billion in awards through their Greenhouse Gas Reduction Fund are now obligated. $20 Billion of these awards will go towards a national clean energy financing network that will support tens of thousands of clean energy products, avoiding millions of metric tons of carbon pollution annually.

Having said that, the IRA was not all success for the Democratic Party. West Virginia Senator, Joe Manchin, announced he was leaving the party and registering as an independent after the IRA was passed. Manchin still caucused with the Democratic Party; however, he announced he would not be seeking reelection, and instead fight to unite the middle. Manchin claimed that instead of implementing the law as intended, appointees seemed determined to violate the law to advance a partisan agenda that ignores both energy and fiscal security. He also called for President Biden to instruct his administration to implement the Inflation Reduction Act as written, and to stop redefining its credits and other subsidies. With this opening, West Virginia elected a Republican senator in his place, Jim Justice, which played a large part in flipping the Senate into Republican control.

Oil companies, specifically, are conveying an unlikely message to the Republican party and the president-elect: spare President Biden’s signature climate law – at least the parts that benefit the oil industry. Oil giants originally opposed the Inflation Reduction Act (IRA) when it was passed in 2022 due to environmental regulations but have since come around to love provisions that set aside billions of dollars for low-carbon energy projects. Despite the oil industry being largely pro-Trump, many executives are worried, when inaugurated, he will side with conservative lawmakers who want to gut the IRA. At a fundraiser in Houston for Trump in May, Occidental CEO Vicki Hollub directly told the president-elect to reserve the tax credits propping up the company’s huge investments in technology. Exxon and Chevron, the two largest domestic oil rcl50@pitt.edu companies in the United States, have promised many future projects totaling more than $30 billion combines, virtually all of which rely on tax credits in the IRA to be feasible.

Trump has called Biden’s climate efforts the “Green New Scam” and in September promised to cut unspent IRA funds if he was re-elected. Republicans in Congress have tried to repeal the law and provisions in it dozens of times and are expected to push for cuts again next year during the legislature’s budget reconciliation. Trump has attacked Vice President Kamala Harris’s support for a fracking ban when she was a presidential candidate in 2019, which she has since backtracked on in an effort to gain support from the oil industry. During the presidential debate in September between Harris and Trump, Harris promoted her support for the IRA, which she gave credit to for the record oil production levels reached during the Biden administration. However, the oil industry’s support for the IRA only extends so far, where many oppose tax credits for renewable energy and purchasing electric vehicles. The oil industry understands that with higher demand for electric vehicles, comes lower demand for oil. America’s largest oil producers are betting big on being able to suck carbon dioxide from the atmosphere to store it underground to recover more crude oil, a very unproven technology. The market consensus with Republicans winning the 2024 election is either a full repeal or no repeal at all. A full repeal is unlikely because many of the IRA benefits are concentrated in nonDemocratic states. Republicans will most likely look to extend the tax cuts introduced by Trump in 2017 that are set to expire in 2025; doing so could require them to offset spending elsewhere, in which they would look to repeal parts of the IRA. This could mean cutting the additional funding distributed by the Department of Energy and the Environmental Protection Agency. I believe to see the best domestic results for energy efficiency and for the economy, it is in the best interest of the Republican Party to not repeal the IRA. The IRA has been crucial in the record oil production numbers reached during the Biden administration, as well as being the largest investment in clean energy and climate action ever. Repealing the IRA could also cause a divide in the Republican Party, as some members have expressed support for keeping certain tax incentives, recognizing their importance within local economies and industries. A full repeal may not align with the interests of all members of the party. Maintaining these elements of reducing healthcare costs and addressing climate change could also help the Republican party position itself as a party that cares about economic and environmental stability among voters. A simple majority could repeal the IRA, but the political fallout from doing so could be significant, especially if it leads to job loss or economic instability. Works Cited: Eaton , C., & Morenne, B. (2024, October 6). Exclusive | Big Oil Urges Trump Not to Gut Biden’s Climate Law. The Wall Street Journal. https://www.wsj.com/business/energyoil/big-oil-urges-trump-not-to-gut-bidens-climate-law-795dc597 A Guidebook to the Inflation Reduction Act’s Investments in Clean Energy and Climate Action. The White House. (2023, January). https://www.whitehouse.gov/wpcontent/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf Impact and Stories of the Inflation Reduction Act. U.S. Department of the Treasury. (2024a, September 12). https://home.treasury.gov/policy-issues/inflation-reduction-act/impact-andstories Inflation Reduction Act. U.S. Department of the Treasury. (2024b, September 13). https://home.treasury.gov/policy-issues/inflation-reduction-act Manchin, J. (2023, March 29). The Inflation Reduction Act Betrayal. U.S. Senator Joe Manchin of West Virginia. https://www.manchin.senate.gov/newsroom/op-eds/the-inflationreduction-act-betrayal The United States Government. (2024a, August 16). Fact sheet: Two Years In, the Inflation Reduction Act is Lowering Costs for Millions of Americans, Tackling the Climate Crisis, and Creating Jobs. The White House. https://www.whitehouse.gov/briefingroom/statements-releases/2024/08/16/fact-sheet-two-years-in-the-inflation-reduction-actis-lowering-costs-for-millions-of-americans-tackling-the-climate-crisis-and-creating-jobs/ The United States Government. (2024b, August 16). Statement from Vice President Kamala Harris on the Inflation Reduction Act Anniversary. The White House. https://www.whitehouse.gov/briefing-room/statements-releases/2024/08/16/statementfrom-vice-president-kamala-harris-on-the-inflation-reduction-act-anniversary/