On May 22, 2025, the U.S. House of Representatives passed a sweeping budget reconciliation package known informally as the “Big, Beautiful Bill.” Now under Senate review, the 1,100+ page bill includes a range of provisions that affect multiple energy sectors, including oil and gas, electric vehicles (EVs), and renewable energy.
Here’s a factual summary of how the bill intersects with U.S. energy policy and programs:
Oil and Gas Provisions
- Drilling Expansion: The bill reinstates and accelerates oil and gas leasing on federal lands and offshore waters. It also shortens permitting timelines for new drilling projects.
- Regulatory Revisions: Provisions reduce the administrative review period for environmental assessments related to oil and gas activity, in alignment with NEPA (National Environmental Policy Act) reforms.
- Federal Royalties: The bill freezes current royalty rates for federal oil and gas leases and blocks increases that had been proposed under the Inflation Reduction Act.
Power Generation and Renewables
- Subsidy Repeals: The legislation repeals or phases out several tax credits and subsidies for renewable energy, including:
- – The Production Tax Credit (PTC)
- – The Investment Tax Credit (ITC)
- – Energy efficiency incentive programs for wind, solar, geothermal, and bioenergy
- Grid Reliability Provisions: The bill includes funding and directive language for improving power grid reliability, with a focus on dispatchable energy resources, which may include natural gas and coal.
Electric Vehicles (EVs)
- EV Tax Credit Rollback: The bill repeals the $7,500 federal tax credit for new EV purchases and eliminates additional incentives for used EVs or domestically sourced batteries.
- Charging Infrastructure: Federal funding for EV charging infrastructure, as outlined in previous legislation, is rescinded or reallocated.
- Fuel Economy Standards: The bill limits the authority of the EPA and DOT to enforce stricter fuel economy standards through 2035.
Other Notable Energy-Related Provisions
- Carbon Capture: Tax credits for carbon capture and storage (45Q credits) are maintained at reduced levels, and new qualifications are added.
- Strategic Petroleum Reserve (SPR): The bill includes measures to require minimum capacity levels and outlines approval processes for drawdowns.
- State Preemption: A section of the bill prevents states from enacting stricter emissions or fuel regulations that exceed federal standards until 2035.
Current Status
As of June 2025:
- – The bill has passed the House and is awaiting action in the Senate.
- – Some provisions—particularly around state-level EV mandates and federal land leasing—are expected to be the subject of negotiations or amendments.
After the Senate floor vote
- The bill has passed the House (May 22), but still requires approval in the Senate. Senators are working under a self-imposed deadline of July 4 for passage via reconciliation.
- What to watch for:
- – Whether the Senate can keep true to its target, avoiding delays or entering conference negotiations/
- – Any major amendment or rollback on contentious provisions (e.g., SALT cap, Medicaid, SNAP, energy credits)
- – If the Senate introduces substantial changes, the bill may go through a conference process between House and Senate. That could push final passage into July or even August.
Check back soon for further updates as the legislation advances through the Senate.
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The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
