President Donald Trump’s newly enacted domestic policy package, officially titled the One Big Beautiful Bill Act, marks a significant shift in US energy policy, dramatically expanding support for fossil fuel development while phasing out key federal incentives for solar and wind energy, NBC News reports.
Passed by the House on Thursday and narrowly approved by the Senate earlier in the week, the sweeping legislation reflects Trump’s energy priorities — favoring oil, gas, coal, and nuclear power over renewable sources. Speaking in a recent interview, Trump expressed strong opposition to wind and solar projects, describing them as unsightly and ineffective.
The legislation opens large areas of federal land and offshore waters for oil and gas development. It mandates a minimum of 30 lease sales in the Gulf of Mexico over 15 years and more than 30 sales annually across nine western states, including expanded access in Alaska.
Additionally, the bill cuts royalties that oil, gas, and coal companies must pay the federal government, a move industry leaders say will encourage greater production. It also enhances a tax credit tied to carbon capture technology, offering increased benefits to companies that use captured carbon to extract more oil — a practice known as enhanced oil recovery.
The coal industry is another key beneficiary. The law requires the government to make at least 4 million additional acres of federal land available for mining and reduces royalties for coal extraction. It also allows companies mining metallurgical coal, used in steel production, to access a manufacturing tax credit.
“These provisions represent nearly all of the oil and gas industry’s priorities,” said Mike Sommers, president of the American Petroleum Institute, a leading industry lobbying group. “This bill is transformational in terms of access to federal lands and waters.”
Hydrogen fuel production also receives some support, with a previously planned phase-out of hydrogen-related tax credits delayed until 2028. Major energy companies, including Chevron and ExxonMobil, have invested in hydrogen development.
While the fossil fuel sector sees significant gains, the renewable energy industry faces a rollback of federal support. The bill phases out long-standing investment and production tax credits for solar and wind projects — incentives that have underpinned much of the sector’s recent growth.
Under the law, projects that begin service after 2027 will no longer be eligible for the clean electricity tax credits, though those that start construction within 12 months of the bill’s enactment may still qualify. A related credit for using US-made components in solar and wind projects will also end for facilities that become operational after 2027.
Renewable energy advocates warn that the rollback could slow industry growth and lead to reduced investment in domestic manufacturing. Abigail Ross Hopper, CEO of the Solar Energy Industries Association, criticized the law, saying it “undermines the very foundation of America’s manufacturing comeback and global energy leadership.”
Michael Carr, executive director of the Solar Energy Manufacturers Association, echoed those concerns.
“Factories that were viable just weeks ago may no longer be financially feasible,” he said. “We expect a slowdown in investment across the sector.”
