What’s In the New Spending Law for the Environment?

On December 27, 2020, seemingly at the last minute, President Trump signed the omnibus spending bill negotiated in Congress.  Much of the news has been about the pandemic relief provided in the law.  But the law also funds many new energy and environmental initiatives.

The Act’s environmental features are mostly found in a component called the Energy Act of 2020.  Politically, this Act is a product of compromise by the leadership of two House and one Senate Committees.  The Senate Energy and Natural Resources Committee is led by Lisa Murkowski (R-AL) with Joe Manchin (D-WV) its ranking member.  Overall, this is a victory for a middle of the road environmental approach.  The Act contains a number of features opposed by progressives, including funding for nuclear energy research and development.

Climate.  The Act phases down hydrofluorocarbons (HFCs), the most significant Congressional action on climate change in years.

Renewable Energy.  Tax credits for solar, energy efficiency, and both onshore and offshore wind are extended in the law. The law sets the investment tax credit for the offshore wind industry at 30%.  This applies to projects built between 2017 and 2025. Another provision of the law directs the Interior secretary to set goals for renewable energy production on federal land by 2022 and permit at least 25 GW of solar, wind or geothermal electricity projects by 2025.

Natural Gas Pipelines.  The law for the first time requires companies to use advanced technology to find and fix methane leaks.

Coal.   The Act calls for research, development, demonstration and commercialization of a “carbon utilization program” that would evaluate alternative uses of raw and processed coal that don’t cause “significant” carbon dioxide emissions. These include water filters, automobile bodies, bikes and building products.