PacifiCorp's Seven Mile Hill wind farm in Carbon County generates 111 megawatts of electrical power. (Dustin Bleizeffer/WyoFile)

The Inflation Reduction Act, unveiled in a surprise announcement last week after West Virginia Sen. Joe Manchin came on board —  proposes changes to health care — including giving Medicare the power to negotiate for prescription drug prices — as well as addressing deficit reduction, climate change and energy. 

Opinion

Manchin’s heavy hand in the negotiations resulted in a plan that gives a big opportunity to energy producing states like Wyoming and West Virginia. West Virginia is the U.S.’s second largest producer of coal. Wyoming is the largest. 

The bill is designed to fight climate change and strengthen at-home-domestic energy security and manufacturing at the same time, and when looked at in tandem with the opportunities coming through the Infrastructure Investment and Jobs Act, there’s a lot for Wyoming, and other energy-producing states, to go after. 

Carbon capture

Through investments like the Integrated Test Center, a CO2 pipeline initiative and research being done at the University of Wyoming, the state has positioned itself to lead in carbon capture and carbon removal technologies — increasingly viewed as critical industries that the globe will need to fight climate change in the years ahead. The bill’s $369-billion climate and energy credits include generous applications for the carbon capture (45Q) tax credit, such as options for direct payment of the credit, multiyear extension of the commence construction window to qualify for the credit, expanded transferability of the credit to another entity, increased credit values for direct air capture and more. 

Renewable energy

Wyoming has over 50% of the best quality wind capacity in the nation, and continues to have a tremendous opportunity to build out this resource. Wind can lead the charge in diversifying Wyoming’s economy — bringing new jobs, revenue and industries. Beyond wind farms, the state can be a central cog in the wind manufacturing supply chain and, through making wind energy directly procurable for businesses, tap into the growing business demand to directly procure renewable energy. 

The bill is a big deal for climate action and putting the U.S. back into a meaningful leading position globally.

Wyoming wind projects should fare well under the IRA, which provides $30 billion in incentives for wind, solar and battery production. Further included in the bill are another $10 billion in tax credits that can go toward the construction of facilities that make renewable energy technologies.  

Electric vehicles and critical minerals

Elon Musk is presumably pretty happy about what the bill does for Tesla, headquartered in Texas. Tesla used up its previously allotted tax credits available after the company sold 200,000 cars. These credits will be reset without a quota and only applied to EV cars made in North America. Future demand for EVs is looking strong. Further, to strengthen American manufacturing, cars only qualify for the credit if their batteries are made with materials and components from the United States or nations that we have trade agreements with. This is good news for Wyoming, home to abundant critical minerals including lithium in the southwestern part of the state. Perhaps there is an opportunity to play a role in the Tesla supply chain and the critical minerals that go into it?

Nuclear and hydrogen

The bill includes tax incentives for next-generation technologies, including clean hydrogen and advanced nuclear. That’s got to be good news for the plans underway for Kemmerer and the TerraPower Advanced Reactor Demonstration Project.  

Wyoming has signed onto a plan to coordinate and develop, alongside Colorado, New Mexico and Utah, a regional clean hydrogen hub. Those clean hydrogen tax credits will undoubtedly be useful. 

Fossil fuels 

Relative to energy security concerns exacerbated by the war in Ukraine and the elevated awareness of domestic reliance on petrostates’ fossil fuel production, the bill provides opportunity for expanded oil and gas exploration, increases oil and gas royalty rates from 12.5% to 16.67%, and ends non-competitive oil and gas leasing on public lands. On Manchin’s website, he outlined his priorities in energy security: “As the superpower of the world, it is vital we not undermine our superpower status by removing dependable and affordable fossil fuel energy before new technologies are ready to reliably carry the load.” This clearly means that Manchin’s support is contingent on an approach that incentivizes innovation in clean energy while preserving traditional energy generation sources.

Coal communities

The bill would provide full and permanent funding for the Black Lung Disability Trust Fund. This acknowledges the commitment that the U.S. has to step up to the health impacts that coal workers who have powered America have sometimes suffered, particularly in Appalachia.  

The bill is a big deal for climate action and putting the U.S. back into a meaningful leading position globally. It’s projected to reduce carbon emissions by around 40% by 2030, which gets near the U.S.’s current goal of cutting U.S. emissions by at least 50-52% below 2005 levels by 2030. 

A week ago, U.S. climate action looked like it was over, with global implications. The IRA creates an opportunity for Wyoming and other energy producing states to thrive in the new energy economy and reduce carbon emissions all at the same time, if it passes.

Nathan Wendt

Nathan Wendt is president at the Jackson Hole Center for Global Affairs (www.jhcga.org), a non partisan organization in Jackson with a track record of working to generate clean-energy, job-creating, climate...

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  1. I received a notification that the University of Wyoming School of Energy Resources was hosting a panel and discussion on “The Future of Energy in Wyoming.” Among the speakers were representatives from the rare Earth, nuclear, oil and gas, coal and natural gas industries. Noticeably absent was any representative from the wind industry. This inspite of the fact that the largest wind development in the country (Chokecherry and Sierra Madre Wind Energy Project) is less than 100 miles from where the discussion is going to be!

  2. Shock. Surprise. Factual comment memory-holed. Again.
    Too honest I guess.
    Windmills are a croc. They do not work. Period.
    California wasted Billions on ruining the Palm Springs/Coachella Valley with these monstrosities. Most are broken. Few spin slowly. The beautiful view is gone. Gone. Real engineers could build real windmills. But this was NEVER about making energy.

  3. Inflation and taxes will go up. Not down.
    Nothing we are told by these people is true. Nothing.

  4. Nathan on a recent drive back east on 80 I was just astounded at the number of wind turbines along the highway. They are a total and complete landscape disaster. The The number of wind turbines we need would cover the Wyoming landscape with the ugliest contraptions known to man .The number of birds that these machines kill is staggering and the amount of electricity they produce as minuscule you. The idea that carbon is bad for the world is driving this entire decarbonization of the country at the expense of reliable cheap energy. We are intentionally buggering our economy and our country, the idiocy of the policies of the Biden administration is apparent to many except those few intellectuals who are in the know.

    1. Estimates of up to a million or more birds a year are killed by wind turbines in the US but that is far exceeded by collisions with communications towers (6.5 million); power lines, (25 million); windows (up to 1 billion); and cats (1.3 to 4.0 billion) and those lost due to habitat loss, pollution and climate change.

    2. So the oil rigs are a better look??? And we all know that oil spills never hurt anything or anyone.

      1. Oil is abiotic. It is not from fossils.
        It is a self-renewing resource.
        Can it be better managed? Of course.
        Is carbon a pollutant? Hell no. NO.
        Can windmill designs be improved? Yes.
        There are potential designs that do not kill birds.
        We have to take the politics out and focus on productivity and stewardship.