The Democrats’ “Inflation Reduction Act” will not decrease inflation, but it will shovel hundreds of billions of dollars in corporate welfare to lucky companies and their lobbyists.
This is what Obamanomics was, and it’s what Bidenomics is: Government gets bigger to the benefit of Big Business. The benefits for the environment and consumers are far more dubious.
Veronique de Rugy at Reason puts it well: “Why should we believe that the Inflation Reduction Act’s massive swelling of ‘investment’ in climate action will succeed as advertised and completely ignore the long record of failure of government subsidies of green energy?”
We shouldn’t. And “investment” typically means transfer from taxpayers to the big companies with the best lobbyists.
“This is kind of an industrial bill masquerading as an energy and climate bill,” energy analyst Robbie Orvis told Politico.
Investment companies are already scrambling to figure out who will be the biggest winners from this law. The act includes subsidies for rich people to buy new electric cars, middle-class people to buy used electric cars, electric carmakers to build electric cars, and their suppliers to supply electric cars.
There are also handouts to green-power firms and good old oil and gas companies. The bill offers $1.5 billion to oil and gas companies for meeting its goals on cleaning up their acts.
Morningstar’s chief U.S. Market Analyst David Sekera named three winners: SunPower, First Solar, and Plug Power.
Plug Power is a hydrogen fuel-cell company, whose outside lobbyists include longtime Kamala Harris aide and Senate Finance Committee staffer Yasmin Nelson and former Ways & Means Committee Tax Counsel Greg Nickerson.
Financial company Lord Abbett writes: “Companies behind clean energy generation, energy efficiency improvements, and clean transportation are likely to be significant beneficiaries of the climate-related provisions of the IRA.” It explains that the subsidies in the bill don’t merely realign incentives of power-industry companies — they also provide gravy to the firms.
Specifically, Lord Abbett mentions “renewable project developers like NextEra Energy and AES,” “wind turbine manufacturers, such as TP Composites,” and electric car “parts suppliers … Borg Warner and Aptiv.” Borg Warner has hired the lobbying firm launched by and named after former Deputy Secretary of State Richard Armitage.
“Mining companies strike gold with new climate law,” reports Energy and Environment News.
“‘It’s a big deal,’ said Jonathan Evans, president and CEO of Lithium Americas Corp. ‘We’re delighted with it.’ His company, which is working to build the largest lithium mine in the United States, is considering building a second U.S. mine, he said, citing optimism over the demand for domestic minerals,” the report read.
E&E News named other winners from the bill’s massive tax credits to boost the production of the materials used in the batteries.
“Another delighted firm is Talon Metals Corp., a junior exploration company. Talon Metals is developing a nickel project in northern Minnesota with global mining conglomerate Rio Tinto. That project got a shoutout from the White House in a press release earlier this year.
“After the climate legislation passed the Senate earlier this month, the company announced it secured exploration rights on 400,000 acres of land in Michigan’s Upper Peninsula in order to look for more nickel — and named Manchin in their press release about the deal,” it reported.
It’s a good day to be a big guy in the energy industry.
