Unlikely allies of Biden’s Inflation Reduction Act emerge

Two right-leaning industry groups have said they’ll support the IRA if Trump is reelected.

By Alexandra HartMay 29, 2024 12:42 pm,

President Joe Biden’s Inflation Reduction Act was initially met with resistance from conservatives. But now, two right-leaning industry groups have voiced their support for the IRA – or at least certain provisions of it – if former president Donald Trump retakes the White House in November.

The American Petroleum Institute and the U.S. Chamber of Commerce have said they will fight to keep parts of the law, reports Kelsey Bruggers, who covers energy and climate politics for Politico and E&E News. She spoke with the Standard about why.

Listen to the interview above or read the transcript below.

This transcript has been edited lightly for clarity:

Texas Standard: First of all, who are the players here? We’ve got the American Petroleum Institute and the U.S. Chamber of Commerce. Can you tell us more about these industry groups?

Kelsey Brugger: So the American Petroleum Institute is sort of the biggest oil lobby in Washington. And and the Chamber of Commerce just represents, you know, big business.

So these are sort of two of the heavy hitters just in terms of trade associations that lobby for their members that include, for the chamber’s case, you know, a lot of different kinds of industries in terms of energy, clean energy, fossil fuels, developers… And API’s is more oil and gas, of course.

Now, I understand these groups were initially opposed to the Inflation Reduction Act. What’s behind their partial change of heart?

So yeah, two years ago you saw them sort of come out largely against it because the Inflation Reduction Act also has, tax hikes – corporate tax hikes. There’s also a methane emissions fee. So there’s certainly parts of it that they still don’t like.

But the Inflation Reduction Act, of course, also has hundreds of billions of dollars of tax credits for clean energy. But what you’re seeing is a lot of these oil companies kind of getting involved in clean energy technologies, like hydropower or carbon capture. So there’s a lot of money that is for advanced manufacturing for solar panels, for instance, or for kind of high tech carbon capture.

So, you know, I think what we’re kind of expecting to see… We don’t know exactly what will happen, of course, next year. We don’t know exactly what other kind of negotiations on Capitol Hill might happen in terms of of fights over taxes or fights over government funding.

But it’s definitely clear that with these tax breaks, there’s a lot of money on the table. And, you know, we can definitely expect big business to lobby to defend a big bulk of it, I would say.

So is that really what they like best? These specific provisions that relate to investments in clean energy? Is that what both the American Petroleum Institute and the U.S. Chamber of Commerce are kind of pointing to here as like the pieces that they really want to save?

It’s hard to know exactly what their strategy… You know, kind of what they’re looking at.

So big business is going to look at… a lot of these tax breaks are creating projects that are not going to be viable without them, right? So sort of once these production credits and once this money starts going out the door, you know, your business is looking at this with long term certainty.

So it is interesting that you have kind of traditional fossil fuel industries like oil and gas kind of getting into the clean energy market, right? You see some of the big oil companies already have the infrastructure set up to get into offshore wind, for instance. So, yeah, there’s definitely going to be sort of unlikely allies there.

So like you said, we don’t know what the future holds, but do we have any idea how these two groups would plan to defend the Inflation Reduction Act if Trump is elected?

I mean, I think what you would expect to see is just sort of a lobbying campaign on Capitol Hill.

And you have Republicans who are kind of following the lead of Donald Trump and talking about wanting to eradicate Biden’s climate policies, right? Already on Capitol Hill, we’ve seen Republicans try to repeal some of these provisions.

But what happens is you start to see divisions within the Republican Party because, for instance, the Inflation Reduction Act also includes subsidies for biofuels, for instance. And so you have the Iowa delegation – a lot of their constituents are eager to access those those credits, right? So you might see kind of fault lines.

You might see like a lobbying effort if you have the Chamber of Commerce and you have API… and there are other trade groups as well. The story focused on those two because those are sort of the heavy hitters. But absolutely there are other groups that are going to be engaged here, and they are going to be talking to members, right? They’re going to be talking to folks on the Hill, they’re going to be sending out alerts that are going to be talking about the value that some of these subsidies are for their members.

And then the question just becomes, okay, well, do Republicans listen to them?

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