Energy provisions to watch in tax talks
As the dust settles on the Senate's early Saturday morning vote, here's a few things to look for in conference...
ANWR: A decades-long push to allow oil exploration in Alaska's Arctic National Wildlife Refuge is on the brink of succeeding.
- What's next: Your Generate host sees very little chance that the ANWR provisions will be jettisoned in a House-Senate conference, so the fate of the legislative drilling effort rises or falls on the overall tax negotiations.
- Axios' Jonathan Swan wrote last night that "None of my best sources — inside or out of Republican leadership — think there's much of a chance the GOP tax effort collapses."
- If the tax bill is signed into law, look for the long ANWR fight to enter a new phase as environmentalists look to slow leasing and development with court battles, among other efforts.
Renewables and EVs: The renewables and electric car sectors will battle House provisions that kill an EV credit and cut the value of the wind energy production tax credit. Renewables groups are also very worried about a Senate provision called "Base Erosion Anti Abuse Tax" (BASE) that they say would thwart their ability to monetize renewable tax credits (a recent letter to lawmakers about this is here).
More BASE: "Anti-base erosion language in the Senate tax bill, as currently written, would impose a 100% surcharge on overseas companies' purchases of solar ITCs and PTCs in the tax equity market. The provision, which would appear to apply retroactively to existing credits, could significantly dampen financing for wind and solar infrastructure," the firm Clearview Energy Partners said in a note Monday morning.
Corporate concerns: This Wall Street Journal story notes that corporate interests including coal magnate Bob Murray are upset over the Senate bill's Alternative Minimum Tax provisions and how they would complicate companies' ability to use other credits, notably the R&D credit.
Oil-and-gas: Via the New York Times and others, a late add to the Senate bill would give new opportunities to certain oil-and-gas firms to benefit from major deductions for so-called pass-through entities.