The U.S. oil and gas industry is openly lauding elements of a reconciliation package that includes historic renewable energy investments, a response likely to heighten climate advocates' wariness of the bill as Democrats look to push it through the Senate as soon as next week.
The legislation, whose scope and ambitions were dictated by fossil fuel industry ally Sen. Joe Manchin, D-W.Va., includes components "that are helpful to our business," Rich Walsh of Valero said during the fossil fuel giant's earnings call on Thursday, referring to tax credits in the 725-page bill that could benefit the company.
Valero wasn't alone in celebrating aspects of the bill that President Joe Biden hailed Thursday as "the most significant legislation in history to tackle the climate crisis"—an emergency for which the fossil fuel industry is responsible.
Politico reported Thursday that the oil and gas industry—which has spent more than $200 million since last year to tank climate legislation—has "identified provisions that may make the climate medicine go down a little easier."
For instance, fossil fuel companies that are already posting record profits could benefit massively from the part of the legislation that requires drilling in the Gulf of Mexico and off the coast of Alaska. Another potential boon is the bill's mandate that oil and gas lease sales be held before the federal government can greenlight new solar and wind development.
"If you look at the pros and cons, the pros generally outweigh the cons," an unnamed oil and gas industry lobbyist told Politico. "The Easter eggs that Manchin forced into the bill on leasing, they're a big deal."
The American Petroleum Institute, the fossil fuel industry's largest U.S. trade organization, responded less enthusiastically, but still welcomed what it described as "some improved provisions in the spending package."
Barrons reported Thursday that ExxonMobil Chevron, Occidental Petroleum, and Equitrans Midstream could be among the bill's leading beneficiaries given its incentives for carbon capture technology, which climate advocates and scientists have decried as a false solution pushed by oil companies trying to stop genuine efforts to slash emissions.
"The legislation extends a tax credit for carbon capture and storage that oil companies can claim based on how much carbon they capture and sequester," Barrons noted. "Exxon has made carbon capture a centerpiece of its low-carbon investments, and wants to build hubs in industrial areas where several companies could collaborate on projects... While it's still a relatively small business, the big oil companies could start growing their projects quickly with federal help."
Such provisions have drawn the ire of climate organizations that argue the bill's sizable renewable energy spending could be undermined by its promotion of new fossil fuel production and reliance on industry-backed faux solutions.
"The Inflation Reduction Act injects $369 billion into programs to support renewable energy production and innovation and creates the clean energy economy that can power this country into the future, while finally spending real money to clean up deadly fossil fuels pollution. This is a once-in-a-lifetime opportunity, and we urge the Senate to seize it," said Abigail Dillen, the president of Earthjustice.
"At the same time," Dillen continued, "we have to recognize the many provisions in this bill that hold back progress. Tax credits that extend the life of dirty coal plants will make it harder to reach critical targets for clean power, and we are outraged that this deal would undermine historic investments in clean energy by holding wind and solar projects hostage to massive new oil and gas leasing off our coasts and on our public lands."
"We can't afford to double down on fossil fuels at this late stage of the climate crisis," she added.