The inappropriately named Inflation Reduction Act (IRA) passed as a budget reconciliation bill by the Senate on August 12th, and by the House one week later, comprises many of the energy-related provisions of the previously proposed Build Back Better bill.

A summary of the legislation was prepared by Attorney Brittany Bolen and her colleagues at Sidley Austin, LLC, a prominent law firm.  The IRA is intended to reduce greenhouse gas emissions and transform energy generation to ultimately improve the environment and lower dependence on hydrocarbon fuel.  Major provisions include:-

• Offshore wind development - The Outer Continental Shelf Lands Act is amended to allow the Secretary of the Interior to grant leases, easements and rights of way for offshore wind development, negating the September 2020 Presidential Memorandum withdrawing these provisions.
• Extraction of fossil energy to increase in cost – The Mineral Leasing Act is amended to increase royalty rates for onshore oil and gas extraction.  Flaring of natural gas will become more expensive, since all burned product from Federal lands will be assessed.
• Low and zero emission vehicles – Funding will be provided to support low and zero emissions vehicles including manufacturing facilities for both light and heavy-duty transport.
• Corporate climate goals will be reviewed by the EPA -   The EPA will introduce standardization and transparency relating to corporate climate targets with appropriate funding. 
• Energy-efficient buildings – Rebates will be provided for homeowners to enhance energy efficiency in addition to developing green buildings with low greenhouse gas emissions.
• Investment in nuclear energy – Support will be provided to manufacturers of nuclear material and to design and license transportation for low-enriched uranium for commercial use.
• Methane emissions to be subject to fees – The Environmental Protection Agency will impose fees based on the quantum of methane emitted by both onshore and offshore petroleum and natural gas production and transport.
• Carbon capture – The Department of Energy will guarantee loans for projects that reduce or sequester carbon emissions improvements to the national grid.
• Funding will be available to erect or modify transmission facilities to resolve constraints effecting domestic and industrial consumers.  Grants will be administered by the Federal Energy Regulatory Commission or state authorities as applicable.

The Inflation Reduction Act will have benefits for agriculture through improved renewable energy generation, the possibility of support for improved building materials and transport costs.  Many of the provisions of the IRA are relatively long-term and neither immediate nor short-term benefits should be anticipated.