How will the Inflation Reduction Act affect us?

As you have probably heard by now, the Inflation Reduction Act of 2022 has been signed into law by President Biden. It is the biggest climate investment in United States history and is estimated to reduce carbon emissions by 40% within the next eight years. While there are some beneficial provisions, the $370 billion investment includes provisions that will ensure frontline communities are entrenched in the effects of fossil fuel extraction for years to come. Additionally, provisions purported to be to the advantage of environmental justice communities will not accomplish the goals they set out.

At least one inclusion in the Inflation Reduction Act will greatly benefit our region: the permanent extension of the Black Lung Tax Credit.¹ Inflation Reduction Act of 2022 § 13901, https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf. The Center for Coalfield Justice has engaged in the fight to ensure that coal miners have access to the Black Lung Excise Tax for some time. It is a tax imposed on each ton of coal produced and is used to help miners pay for the treatment of black lung, or pneumoconiosis, if the company they were employed by files for bankruptcy. This permanent extension of the Black Lung Excise Tax is a major win for our coal communities.

There are also several provisions that will improve the air in Washington and Greene Counties. The Methane Emissions Reduction Program²Inflation Reduction Act of 2022 § 60113. is designed to reduce the leaks from the production and distribution of natural gas. Methane, the main component of natural gas, is 80 times more harmful to the environment than carbon dioxide. Since our communities produce a lot of natural gas, we should see a lot of emissions reductions.

While methane is bad, the transportation sector is the largest contributor to the United States’ greenhouse gas emissions. Rural communities will be reliant on personal transportation for the foreseeable future; therefore, Congress’ investment in electric vehicle (“EV”) tax credits³ Inflation Reduction Act of 2022 § 13401. will help us move into the future and cut our emissions. The tax credits will provide low- to middle-class families⁴ Individuals cannot make more than $150,000 to receive the tax credit. Joint-filers can make up to $300,000. tax credits up to $7,500 if they purchase a new EV or, for the first time ever, up to $4,000 if they purchase a used EV. There are also investments in clean heavy-duty vehicles⁵ Inflation Reduction Act of 2022 § 60101. as well as a diesel emissions reduction program⁶ Inflation Reduction Act of 2022 § 60104. to help curb greenhouse gas emissions from the transportation sector. These investments, paired with the Methane Emissions Reduction Program, will make the air quality in Washington and Greene counties noticeably better.

The Inflation Reduction Act also contains other items that will benefit communities like ours. There will be funding for air quality monitoring and financial assistance for disadvantaged communities to improve access to drinking water.⁷Inflation Reduction Act of 2022 §§ 50231; 60105-60106. The federal government will also provide funding to collect data in environmental justice communities to measure disparate impacts and burdens of pollution and climate change.⁸Inflation Reduction Act of 2022 § 60401.

Additionally, the Inflation Reduction Act will make the United States competitive in the clean energy manufacturing industry. Congress included subsidies so businesses will manufacture clean energy technologies at home instead of abroad, which will create many jobs. They also invested in a clean energy technology accelerator which will support the deployment of emissions reduction technologies in disadvantaged and low-income communities.

There are a few items in this bill that seem good on their face, but when you get into the details there are problems. For example, there are several grant programs included in the bill to benefit disadvantaged communities, including the Greenhouse Gas Reduction Fund⁹ Inflation Reduction Act of 2022 § 60103., the Neighborhood Access and Equity Grants¹⁰Inflation Reduction Act of 2022 § 60601., and Environmental and Climate Justice Block grants¹¹ Inflation Reduction Act of 2022 § 60201.. However, all of these grants require the community to compete with industry or large nonprofit organizations, which have more connections and more money for matching, to receive funding.

The Home Electrification and Efficiency programs¹²Inflation Reduction Act of 2022 §§ 50121-50122. will help households lower their utility bills while reducing emissions. However, because this is a rebate program, families will have to pay the costs to switch their appliances up front, with those costs being repaid by the government. Not being able to afford those up-front costs will make it difficult for low-income households to participate in the program. Therefore, the program will not help those that it should. Additionally, upgrades to efficiency in affordable housing do not exclude false solutions like hydrogen for heat.

In fact, the Inflation Reduction Act contains a lot of funding for false solutions like carbon capture and hydrogen under the guise that they are clean technologies. However, most hydrogen is collected by separating it from the methane in natural gas, which means that fracking is still necessary to produce this energy. When the hydrogen is created, it is separated from carbon dioxide, which is then captured and stored underground using carbon capture and sequestration technologies. However, carbon capture technology may not be economically sound, and it may be possible for the carbon to escape. Thus, the promotion of these false “solutions” to climate change will not only serve to keep us in the fossil fuel age for the foreseeable future, but it will also subsidize polluters.

While the funding for hydrogen and carbon capture is bad enough, frontline communities on the Gulf Coast and Alaska are being sacrificed to the oil and gas industry. The Inflation Reduction Act contains a reinstatement of canceled oil and gas leases in those regions.¹³ Inflation Reduction Act of 2022 § 50264. Additionally, there is a requirement that at least 60 million acres of offshore leases be offered to the oil and gas industry before they are offered for renewable leases.¹⁴ Inflation Reduction Act of 2022 § 50265. A bill that is supposed to push us into the future should not be so dependent on the energy of the past at the expense of the people.

Finally, as part of the deal to pass the Inflation Reduction Act, Senator Joe Manchin, Senate Majority Leader Chuck Schumer, House Speaker Nancy Pelosi, and President Joe Biden agreed to permit reform, specifically to permits issued under the National Environmental Policy Act (NEPA). Manchin claims that the reform will be “commonsense” to “ensure all energy infrastructure, from transmission to pipelines and export facilities, can be efficiently and responsibly built to deliver energy safely around the country . . . .” But, as our friends at Taproot Earth made clear, significant cuts to NEPA would remove many of the tools that frontline communities use to prevent their homes “from becoming sacrifice zones for dirty energy.”

In conclusion, the Inflation Reduction Act of 2022 has some good provisions, but its investment in and reliance on the fossil fuel industry will affect frontline communities for decades to come, making the wins we got feel small. At the Center for Coalfield Justice, we are committed to monitoring and advocating for implementation of these resources in southwestern Pennsylvania, and will join with allies to prevent harmful permitting reform. 

• 1
  Inflation Reduction Act of 2022 § 13901, https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf.
• 2
  Inflation Reduction Act of 2022 § 60113.
• 3
  Inflation Reduction Act of 2022 § 13401.
• 4
  Individuals cannot make more than $150,000 to receive the tax credit. Joint-filers can make up to $300,000.
• 5
  Inflation Reduction Act of 2022 § 60101.
• 6
  Inflation Reduction Act of 2022 § 60104.
• 7
  Inflation Reduction Act of 2022 §§ 50231; 60105-60106.
• 8
  Inflation Reduction Act of 2022 § 60401.
• 9
  Inflation Reduction Act of 2022 § 60103.
• 10
  Inflation Reduction Act of 2022 § 60601.
• 11
  Inflation Reduction Act of 2022 § 60201.
• 12
  Inflation Reduction Act of 2022 §§ 50121-50122.
• 13
  Inflation Reduction Act of 2022 § 50264.
• 14
  Inflation Reduction Act of 2022 § 50265.