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Caribou graze on the coastal plain of the Arctic National Wildlife Refuge
(Image by USFWS Headquarters) Details DMCA
While the electric vehicle industry and the wind and solar sector can breathe a little easier that the sweeping legislation preserves their tax credits, fossil fuel producers are likely cheering the opening of the Arctic National Wildlife Refuge (ANWR) to oil and gas drilling.
The controversial provision, a proposal from Senator Lisa Murkowski (R-Alaska), would auction off an area known as the "biological heart" of the Arctic Refuge that's home to crucial wildlife habitats, including one-third of all polar bear denning habitat in the U.S. and one-third of the migratory birds that come to the Arctic Refuge. It is also considered sacred to the indigenous Gwich'in people, who sustain themselves from the caribou that migrate there.
Oil drilling in the refuge has been sought by conservative lawmakers for decades despite opposition from 70 percent of Americans.
"Congress has committed the ultimate sellout of America's public lands with such a devious and shortsighted action in one of the wildest places left in the world," said Jamie Rappaport Clark, president and CEO of Defenders of Wildlife. "Shame on those who supported this abhorrent assault on our natural legacy."
Proponents of arctic drilling say the plan would help pay for the massive tax cuts, with Murkowski insisting that her rider would raise "more than $1 billion within 10 years and it will likely raise over $100 billion for the federal Treasury" over time.
But critics contend that with oil prices below $60 a barrel, it's not even certain that oil companies would want to open up one of Earth's most remote and harshest areas, nor would drilling raise enough revenue to offset the massive deficit forecasts created by the tax bill.
Notably, the renewable energy sector did not escape the widely unpopular bill's effects scot-free, as it includes the Base Erosion Anti-Abuse Tax (BEAT) program that would "undermine our capacity to use renewable energy tax credits, which have value only if they can be monetized," according to a letter addressed to the Senate from clean energy trade groups.
Greentech Media delved further:
"That problem is the Base Erosion Anti-Abuse Tax (BEAT) provision, which targets 'earnings strippings,' where large companies with foreign operations reduce their tax bills through cross-border payments they can then deduct in the U.S. The BEAT provision aims to circumvent that stripping with a minimum tax of 10 percent of taxable income.
"BEAT would require every company to do two calculations: one quantifying 10 percent of a company's taxable income, including cross-border payments, and another quantifying the corporation's tax liability, excluding any tax credits the company received from tax equity investments.
"The BEAT provision applies to all but R&D; credits. If a company has invested in renewables, the second number could be lower than the first. If that's the case, the company would have to pay the difference in taxes."
"The environment is the clear loser, with calamitous consequences for all Americans," Anna Aurilio, Environment America's D.C. Office Director said about the tax bill.
Environment America noted that the bill continues massive incentives for fossil fuel production amounting to tens of billions of dollars over the next decade.