Every summer, people gather to celebrate the works of William Shakespeare in festivals from Utah to Pennsylvania, Cambridge to Poland, and everywhere in between. This summer, Senate Democrats apparently decided to host their own festival in Washington, DC.
Thanks to the negotiating power of one person, Senator Joe Manchin from West Virginia, President Joe Biden is panting to sign a “historic climate bill” lauded by the Left as a once-in-a-lifetime opportunity to save the planet. It’s dubiously titled the “Inflation Reduction Act.”
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This is the ultimate climate cart before the horse moment. In the words of the Fool in Shakespeare’s King Lear: “May not an ass know when the cart draws the horse?”
The 730-page “Inflation Reduction Act” won’t reduce inflation (additional government spending, by definition, increases inflation) and instead sprays around $437 billion like a fire hose. It mandates government price controls on prescription drugs. Imposes a 15% minimum tax rate on US companies that make “too much money.” It “invests” $80 billion in the IRS for tax enforcement. It strengthens the hands of unions.
None of that has anything to do with inflation or climate change.
It’s the same approach Democrats always reach for: their way to attack climate change is to spend taxpayer money and to remake our system of government to be more socialist.
The economy or the climate? Why not both?
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To be fair, there is much in the Inflation Reduction Act related to climate, energy security and the environment, and not all of it bad. Almost 85 percent of the price tag, $369 billion, will go to programs related to some aspect of climate, energy, and the environment.
That includes subsidies for energy sectors: aviation biofuels, electric vehicles (new and used), energy efficiency (home and business), hydrogen, solar, nuclear, and wind (onshore and offshore).
There are also rebates for retrofits for homeowners, multi-family buildings, and industrial manufacturing facilities. Conservationists, farmers, and ranchers get funding. Forests, rural electric cooperatives, ports, and even pipelines get funding. Electric transmission lines get $2 billion in direct loans and $760 million in grants.
To the chagrin of many environmentalists, even the oil and gas industry benefits through the “45Q” carbon sequestration and utilization tax credit. Among other things, it pays oil and gas producers to capture and use carbon, including for extending the life of oil and gas fields, aka enhanced oil recovery. In a step that is long overdue, the bill also opens up some key drilling areas in the US.
The funding parade rolls on:
- Scientists at our national laboratories get funding. There’s funding for early-stage ”basic” research, later stage but not yet commercial ”applied” research for everything from fusion to fission, molecules but not quite moon landings.
- There’s funding for domestic manufacturers of iron, steel, aluminum, cement, glass, pulp, paper, ceramics, chemicals and virtually anything dubbed as ”energy intensive.”
- There are loan programs for Made in the USA critical minerals production, processing, manufacturing and recycling. Loan guarantees for retooling, repowering, and replacing energy infrastructure.
- There’s funding for planning, modeling, and analysis, building, processing, and deploying.
No matter where you live, anywhere in the U.S., there’s something in this for you.
The bill covers just about every base, except for one – the most important one. The Inflation Reduction Act fails to address federal permitting reform.
It’s said that if all you have is a hammer, then everything starts to look like a nail. Apparently, President Biden and the Congressional Democrats think that their golden appropriations hammer is the solution to climate. But what we need now is a saw.
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We can spend ever more and it won’t solve the problem we can actually build projects expeditiously on American soil. What is keeping us from “Build Back Better” is the regulatory morass under the National Environmental Policy Act, or NEPA, that environmentalists deploy to delay energy projects, sometimes for a decade, sometimes forever.
And the problem is not just for oil and gas projects, but also for solar, wind and nuclear. Want more solar and wind on the grid? Want more clean electricity for your EV? We need to build new transmission lines for that. NEPA stands in the way.
Senator Manchin did supposedly get a “side deal” that will streamline the federal permitting process for new infrastructure projects, but only over the objection of his Democrat colleagues. Kudos to Senator Dan Sullivan from Alaska for his resolution forcing the Democrats’ hand on their unwillingness to roll back regulations. But I wouldn’t bet on Biden signing this part of the bill.
Our federal permitting process must be reformed to allow climate solutions to flourish and to make those solutions here in the U.S. Otherwise, billions of taxpayer dollars will be wasted.
Someone please tell the ass that it’s time to put the spending cart behind the permitting horses. Mr. President, the reins are in your hands.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.