How does Trump’s ‘big, beautiful bill’ affect US energy dominance?
TL/DR –
The “big, beautiful bill” passed through Congress aims to recalibrate the US’s energy system to prioritize reliability, domestic capacity, and system integration. The legislation emphasizes technologies like natural gas, nuclear, and geothermal and cements nuclear energy as a foundational aspect of the nation’s future energy mix. However, some argue that the bill undermines the goal of energy dominance by creating uncertainty in energy tax preferences, wasting billions in commitments made for renewable energy, ceding the future of renewable investment to China, and raising the cost of energy supply.
Overview
The Republican mega-legislation, dubbed the “big, beautiful bill,” passed Congress and is set to be signed by President Donald Trump. The bill, which is expected to reshape US energy policy, has undergone various changes throughout its journey, including the addition and removal of several provisions pertaining to US energy. Insights from Atlantic Council Global Energy Center experts shed light on whether the bill aligns with Trump’s aim to solidify US energy dominance.
The bill sets a foundation, but one bill won’t be enough
The “big, beautiful bill” signifies a turning point for US energy policy, opening up a new dialogue about recalibrating the nation’s energy system to enhance energy security. The legislation emphasizes the need for reliable, domestic capacity, and system integration in the wake of expanding AI-driven electricity demand. It promotes the use of dependable resources like natural gas, nuclear, and geothermal technologies to meet this demand.
The bill strongly endorses nuclear energy as a key component of the nation’s future energy mix, reflecting a growing global consensus on its strategic value. It also includes provisions to limit the use of Chinese-manufactured components in the US grid, highlighting concerns over foreign influence in critical energy systems. However, the bill sets the foundation for what’s to come, and there’s more work to be done, particularly in permitting reform and infrastructure development.
This bill is not the way to US energy dominance
Conversely, critics argue that the bill could potentially undermine the goal of US energy dominance. Firstly, by prematurely ending tax preferences under the Inflation Reduction Act (IRA), the legislation may create uncertainty among energy investors. Secondly, it is claimed that the bill mismanages billions in commitments made for hydrogen, carbon capture, and renewable energy investments.
Furthermore, the bill is seen as a concession to China in the global competition for dominance in the renewable energy sector. Critics also speculate that the legislation may hinder the cost-effective generation of new power for AI and data-center hyperscalers, increasing the cost of electricity for industry and consumers, and potentially leading to higher interest rates throughout the economy.
Further reading
—
Read More US Economic News