NEFI Issues Analysis of Proposed Inflation Reduction Act
NEFI reported that Senator Joe Manchin has reached an agreement with Senate Majority Leader Chuck Schumer on a 725-page bill called the Inflation Reduction Act of 2022 that includes $369 billion of energy and climate policies.
“A bill of this size and scope demands detailed analysis and nuanced discussion. It might pass or might not — no single energy or climate group will be able to change that. What we can do and will continue to do is fight to ensure the best possible political, regulatory and economic outcome for our members,” NEFI said in a statement.
NEFI prepared a summary highlighting the proposed bill’s “Good,” “Bad” and “Mixed Bag” provisions:
Good
- A provision that may result in 600 million acres of federal waters for new oil & gas production – more than 4X the entire Gulf of Mexico outer-continental shelf
- $500 million for downstream biofuel infrastructure grants – NEFI succeeded in increasing the grants from 50% to 75% of project costs and ensuring “heating oil distribution centers” are eligible
- 2-year extension of the biodiesel blender tax credit, cellulosic biofuel producer credit, and propane autogas credit
Bad
- Creation of a new rebate program for electric heat pumps, albeit at a much smaller funding amount than initially proposed
- Replacement of the biodiesel blender tax credit in 2025 with a new producer credit for “clean transportation fuels” – the NEFI team is actively working to ensure heating fuels are eligible for this new credit
- Creation of a sustainable aviation fuel (SAF) tax credit that may result in increased competition for biofuels
Mixed Bag
- $600 tax credits for oil boilers and furnaces that meet 2021 Energy Star criteria and are rated by the OEM for use with at least 20% biofuel blends – NEFI succeeded in securing this language in the bill
- $4.3 billion for performance-based energy efficiency rebates, including up to $4,000 for proven energy savings of 20%-34%