The ‘Inflation Reduction Act’ Is A 4-Step Recipe For Wrecking US Energy

Want to know whether a candidate is truly supportive of American energy?

Here’s one simple test: Did they oppose the “Inflation Reduction Act”?

If not, then they supported one of the most destructive energy policies in American history. [bold, links added]

• The “Inflation Reduction Act” is a 4-step recipe for destroying American energy

1. Make us more dependent on unreliable electricity

2. Impose new oil and gas taxes during an energy crisis

3. Give the Environmental Protection Agency more power to restrict fossil fuels

4. Give more power to anti-fossil-fuel activists

• Step 1 of the Inflation Reduction Act’s recipe for destroying American energy: Make us more dependent on unreliable electricity by
  1) reducing the supply of reliable electricity via solar and wind favoritism
  2) increasing demand for electricity via electric vehicles and other electricity subsidies
• We’re in a growing electricity crisis caused by shutting down reliable power plants and not replacing them with reliable power plants.

The Inflation Reduction Act’s response to this crisis is to double down on one of its main causes: subsidies for unreliable solar and wind. 1

• Why is America shutting down too many reliable power plants?

Two of the chief villains are the subsidies known as the Investment Tax Credit (ITC) and Production Tax Credit (PTC). These subsidies had expired. But the Inflation Reduction Act restored and extended them.

• The “ITC” and “PTC” solar and wind subsidies pay utilities to shut down or slow down reliable gas and coal plants whenever the sun shines or the wind blows. This defunds reliable plants, causing many to be shut down.

The Inflation Reduction Act extends these ruinous subsidies indefinitely. 2

• The Inflation Reduction Act pretends to be pro-nuclear by adding nuclear to its subsidized forms of energy. But since nuclear overregulation makes new plants cost-prohibitive, the Inflation Reduction Act’s endless “clean energy” subsidies = endless solar and wind subsidies = more defunding and shutting down reliable power.
• Here’s how massive the Inflation Reduction Act’s solar and wind subsidies are. They will pay up to two-thirds of the cost of wind turbines—the equivalent of paying $60-70,000 for a $100,000 electric vehicle! They also further subsidize solar and wind by paying 50%+ of hydrogen from solar and wind that’s nowhere near competitive. 3
• Solar and wind subsidies not only drive the shutdown of reliable power plants and loot taxpayers, but they also inflate electricity prices. Because solar and wind can go near zero at any given time, they don’t replace most of the costs of reliable power plants—they add to them. 4

• Even before the Inflation Reduction Act, government policy was already threatening up to 185 gigawatts of coal power in the next 7 years—about 1/5 of reliable capacity!—with the vast majority not replaced by reliable gas or nuclear.

By increasing solar and wind subsidies the Inflation Reduction Act will ruin our grid even more. 5

• Here are current projections through 2030 for retirements vs. additions of reliable electricity capacity.

Imagine looking at this disaster-in-waiting and saying “Let’s shut down even more reliable power plants!”

Yet that’s what every supporter of the Inflation Reduction Act effectively did. 6

• At the same time, the Inflation Reduction Act is hastening the shutdown of reliable electricity generation, it is—insanely—promoting far more use of electric cars via subsidies.

California recently previewed the Inflation Reduction Act by telling citizens there wasn’t enough power for electric vehicles even at 3% market penetration.7

• To make matters still worse, the Inflation Reduction Act not only drives the shutdowns of reliable electric capacity while subsidizing us into using more electric cars, but it also coerces us into increasing electricity use in many other ways: electric heating, electric cooking, electric water heating.
• If your goal was to ruin our grid you’d do exactly what the Inflation Reduction Act does

1) reduce the supply of reliable electricity via solar and wind favoritism

2) increase demand for electricity via electric vehicles and other electricity subsidies

And that’s only the beginning of the Inflation Reduction Act’s energy destruction…

• Step 2 of the Inflation Reduction Act’s recipe for destroying American energy: Impose new oil and gas taxes during an energy crisis at a time when we and the world desperately need more oil and gas, the Inflation Reduction Act imposes FOUR new taxes on the oil and gas industry that make production more expensive.
• The world is in the midst of an energy crisis—specifically a crisis of lack of fossil fuel supply, which has increased the cost of energy and increased Europe’s dependence on Russia. To help ourselves and our allies we need to foster fossil fuel production. Instead, the Inflation Reduction Act punishes it.

The Inflation Reduction Act has 4 new taxes that make oil and gas production more expensive:

1. Higher federal royalty payments

2. A high and anti-drilling min. corporate tax

3. A methane fee that penalizes US producers

4. A “Superfund” tax to pay for impacts today’s producers are not responsible for 8

• Anytime the government adds new taxes to the oil and gas industry, it increases costs and thereby discourages production. To do this anytime is suspect. To do it during an energy crisis where oil and gas are desperately needed is ruinous.
• Step 3 of the Inflation Reduction Act’s recipe for destroying American energy: Give the Environmental Protection Agency more power to restrict fossil fuelsThe Environmental Protection Agency’s use/abuse of its existing powers has crippled our grid and handicapped our fossil fuel industry. The Inflation Reduction Act gives the Environmental Protection Agency much more dollars and power to do far more damage.
• Arguably the largest single cause of today’s electricity crisis, in which reliable power plants are being shut down without reliable replacements, is the EPA—which has aggressively acted to shut down coal plants without considering the catastrophic costs of an unreliable grid.
• Thanks largely to irrational EPA actions, the next 7.5 years are scheduled to be a bloodbath of reliable capacity retirements. There are 93 gigawatts of announced coal plant retirements, plus up to 92 more gigawatts are at risk of retiring early due to new EPA rules. That’s about 20% of reliable capacity! 9
• We need the government to recognize our electricity emergency and immediately reform the EPA to do a proper cost-benefit analysis of its actions so it doesn’t destroy our grid.

Instead, the Inflation Reduction Act just gave the EPA Protection Agency more money and power to recklessly attack fossil fuel use. 10

Read rest at Energy Talking Points