Energy policies included in the US House budget reconciliation package represent a big departure from the federal energy strategy under the Biden Administration, with a return to fossil fuel development that could provide a financial boost to states like Alaska in the coming years.
The legislation, supported by House Republicans and endorsed by President Donald Trump, includes a wide range of pro-energy provisions designed to expand oil and gas production while rolling back Biden’s so-called “clean energy” incentives that depend on dirty mining in China.
The House reconciliation package has yet to pass out of the House Budget Committee, which stalled the bill on Friday.
However, energy-related sections advanced by the House Ways and Means and Natural Resources Committees outline sweeping changes. These include mandates to expand federal fossil fuel leasing, streamline the permitting process, lower royalty rates for oil and gas producers, refill the Strategic Petroleum Reserve, and delay implementation of the Methane Emissions Reduction Program.
A centerpiece of the proposal is a requirement for at least 30 oil and natural gas lease sales on federal lands and in the Gulf of Mexico over the next 15 years.
For Alaska, the bill mandates six lease sales in Cook Inlet and authorizes new leasing in the National Petroleum Reserve and the Arctic National Wildlife Refuge. Additionally, it reinstates quarterly onshore lease sales, with projected federal revenue gains of roughly $12 billion.
Alaska Congressman Nick Begich, a Republican, played the key role in ensuring the inclusion of measures favorable to the state, particularly those enabling development in Cook Inlet, NPRA, and ANWR.
In addition, Begich has thrown a life ring to future Alaska legislators struggling to balance the state budget. In what could be one of the most important developments for Alaska’s economy and ailing state budget, Begich has inserted in the budget an increase Alaska’s share of federal leasing revenues from 50% to 90% starting in 2035. This could dramatically strengthen the state’s long-term fiscal outlook at a time when state lawmakers are looking to tax Alaskans and to even dissolve their Permanent Fund dividends altogether.
While the bill has strong backing from Republicans and fossil fuel advocates, it faces resistance from Democrat lawmakers and strong opposition from environmental groups.
Sen. Lisa Murkowski of Alaska, who has had mercurial stances energy issues, expressed concerns about the scope of the legislation because she wants the Biden “green energy” measures preserved.
“I’m not investing anything in it until we see it,” Murkowski told reporters last week. “I’m not going to get too excited about what’s happening there until you see the final.”
Although the budget reconciliation failed to pass the House Budget Committee on Friday due to opposition from four conservative members of the Freedom Caucus (Chip Roy, Josh Brecheen, Andrew Clyde, and Ralph Norman), who joined Democrats to block it, the committee plans to reconvene on Sunday. The four members who blocked it argue that the bill needs more cuts to federal spending.
Once out of committee, the “Big Beautiful Bill” will be sent to the House floor for debate under rules set forth by the Rules Committee. Representatives then debate the bill, and a floor vote will be held. With the GOP’s slim majority, the bill needs nearly unanimous Republican support, as Democrats are expected to oppose it unanimously. If it passes, the bill moves to the Senate, where Murkowski is expected to hold it hostage in order to get the green energy programs back into the bill, as well as funding for Planned Parenthood.