As global energy markets are roiled by the geopolitical tensions created by Russia’s aggression in Ukraine, Americans feel the economic pain from higher energy prices and Europe is boxed into an uncomfortable corner due to its dependence on Putin’s oil and gas — the rationale for a renewed domestic energy approach is clear. A national strategy for energy must combine a supply security agenda with the clean energy transition imperative. It simply no longer makes political or policy sense to focus on these issues in isolation.
Due to its longstanding leadership both supporting advanced energy technologies like wind and solar and helping to unleash the natural gas fracking boom across the country, Congress should be well-positioned to build on its historically bipartisan actions to enact the logical next wave of federal policy. Legislation combining an ambitious push to deploy clean energy technologies at home with an aggressive support package enabling new supplies of clean American natural gas to reach our friends across the globe seems eminently achievable. Such an agenda could garner bipartisan support in Congress and generate enormous goodwill across the world while positioning the U.S. for continued energy, climate and economic leadership in the century ahead.
It is no surprise then that Sen. Joe Manchin (D-W.Va.), Sen. Lisa Murkowski (R-Alaska) and a broader group of House and Senate members from both parties began informal talks this week regarding the outlines of such a measure. The bipartisan nature of such a deal is critical. Clean energy tax credits that can serve as the foundation for the domestic energy transition have a long history of bipartisan congressional support. In fact, they have garnered ever more support from both Republicans and Democrats over time.
Even as the partisan Build Back Better package was advanced by Democrats last year, the $300 billion clean energy tax package embedded in the deal includes credits for technologies that have support across party lines. And while a revived reconciliation bill that includes climate is still very much in play, surprisingly, thinking bigger instead of “Better” could unlock a broader, more durable, path forward in Congress for a range of clean energy tax incentives that would not only significantly reduce U.S. greenhouse gas emissions but grow the economy by attracting billions of dollars in new investment, push back against energy inflation and create new American jobs.
It is these economic benefits stretching to every region of the country that historically accounted for past bipartisan support. Many Senate Republicans have supported a wide range of clean energy tax incentives for well over a decade. In fact, the last clean energy tax incentive deal in 2020 was delivered by a Democratic House and Republican Senate that approved a powerful package of tax credits for many technologies from wind and solar extensions to carbon capture enhancements. That legislation, signed into law by former President Donald Trump, sent a signal that domestic clean energy is popular across the country in both red and blue states.
Pivoting from the Democrat-only Build Back Better to a more bipartisan track requires the incorporation of more Republican priorities, and this is where an aggressive vision for natural gas exports fits in. Easing the permitting of natural gas infrastructure for distribution and export can be an important accelerator of economic growth in the near term and global security over time. A domestic clean energy push will free up more of our nation’s abundant gas for utilization overseas. Ensuring we do this with strict controls on methane leakage and efficiency in production and use can put the U.S. on a path towards the cleanest natural gas system in the world while creating a strong alternative to those seeking to use natural resource dependence as a geopolitical lever. The clean energy tax credits have important incentives for carbon capture and clean hydrogen production that will, over time, further reduce the climate impacts from natural gas utilization.
While there’s something in this package for both progressives and conservatives, successfully enacting a deal that can become law will require compromise and a vision from lawmakers that rises above party interests. Climate advocates have been loath to accept any support for fossil fuels, particularly while Democrats control both chambers of Congress. Fiscal conservatives on the right have been opposed to more spending, particularly in pursuit of a green agenda that may exacerbate inflationary pressure and disadvantage the American economy while Republican loyalists will be thinking twice about handing President Biden a legislative victory so close to the midterm elections.
Whether enough votes can materialize for a rational and strategic deal that could emerge from the Manchin/Murkowski group remains to be seen. But with congressional leaders expressing public support for a potential energy tax package, unified support against Russian energy and a closing window of legislative opportunity, the prospect of a grand energy bargain driving clean energy at home and secure energy abroad appears more real than ever.
Sasha Mackler is executive director of the Bipartisan Policy Center’s Energy Program.