President Donald Trump has signed into law the One Big Beautiful Bill Act, a sweeping piece of legislation that dramatically reshapes the U.S. energy landscape. Passed by the House of Representatives on Thursday, following a narrow Senate approval, the bill ends long-standing federal support for solar and wind power, while creating a more favorable environment for oil, gas, and coal production. The move aligns with Trump’s stated priorities to rely on traditional energy sources to meet the nation’s growing demands.
In a recent interview with Fox News, Trump criticized renewable energy projects, stating, “I don’t want windmills destroying our place. I don’t want these solar things where they go for miles and they cover up a half a mountain that are ugly as hell.” This sentiment is now reflected in his signature domestic policy, which fulfills many of the oil and gas sector’s top priorities.
Fossil Fuels Gain Ground
The new law significantly opens federal lands and waters to oil and gas drilling, reversing curbs enacted by the previous administration. It mandates 30 lease sales in the Gulf of Mexico over 15 years and more than 30 annually on lands across nine states, including access to Alaska. Additionally, the law reduces the royalties that producers pay for extracting oil and gas on federal lands, incentivizing increased production.
Mike Sommers, president of the American Petroleum Institute, an influential industry lobbying group, remarked, “This bill will be the most transformational legislation that we’ve seen in decades in terms of access to both federal lands and federal waters. It includes almost all of our priorities.”
The legislation also encourages oil companies to utilize a carbon capture tax credit, initially designed to support technologies that capture and store carbon emissions. Under the new law, producers receive enhanced tax benefits for using these emissions to extract more oil, a practice known as enhanced oil recovery.
“I have a number of members who plan on investing significantly in hydrogen and so the extension to the end of 2028 was a welcome priority that was fulfilled,” Sommers said.
Renewable Energy Faces Setbacks
Conversely, the bill phases out crucial tax credits for wind and solar energy, which have been instrumental in the growth of the renewable sector. The investment tax credit, in place since 2005, and the production tax credit, established in 1992, will no longer apply to projects starting service after 2027, with some exceptions for projects beginning construction within a year of the bill’s enactment.
Abigail Ross Hopper, CEO of the Solar Energy Industries Association, criticized the legislation, stating, “Despite limited improvements, this legislation undermines the very foundation of America’s manufacturing comeback and global energy leadership.”
The bill also ends a related tax credit for using U.S.-made components in solar and wind farms for projects entering service post-2027. This credit was intended to boost domestic manufacturing and reduce reliance on Chinese equipment.
Michael Carr, executive director of the Solar Energy Manufacturers Association, warned, “If nothing changes, factories start to close. Factories that are on the drawing board that probably penciled [favorably] two weeks ago, maybe don’t pencil now. We’ll see investment slow down in the sector going forward.”
Implications and Future Outlook
The passage of the One Big Beautiful Bill Act marks a significant shift in U.S. energy policy, prioritizing fossil fuel development over renewable energy expansion. This shift could have far-reaching implications for the nation’s energy independence, environmental policies, and economic growth in the energy sector.
Supporters argue that the law will bolster the U.S. economy by creating jobs and reducing energy costs, while critics warn that it could undermine efforts to combat climate change and stifle innovation in renewable technologies. The international community will also be watching closely, as the U.S. plays a crucial role in global energy markets and climate policy discussions.
As the energy landscape evolves, stakeholders from all sides will likely continue to debate the merits and drawbacks of this legislation. The future of U.S. energy policy remains uncertain, with potential shifts depending on political changes and technological advancements.
