The recently enacted “One Big, Beautiful Bill Act” introduces sweeping adjustments to the U.S. tax and regulatory framework, with direct consequences for oil, gas, renewables, and emerging clean energy technologies. For industry leaders, understanding these provisions is essential to effectively navigate the evolving landscape, balance risks, and capitalize on new opportunities.

Key Provisions

  • Oil and Gas Lease Sales: The law now requires the Bureau of Land Management to hold quarterly oil and natural gas lease sales on federal lands and waters, with royalty rates reinstated at 12.5%.
  • Prohibited Foreign Entity (PFE) Rule: The bill limits access to tax credits for projects involving prohibited foreign entities (PFEs), based on ownership or supply chain participation
  • Carbon Capture and Storage (CCS): he 45Q credit for CCS projects remains in place for facilities beginning construction before 2033, with direct pay provisions intact
  • Renewables Timelines: Wind and solar facilities will continue to qualify for production and investment tax credits, but under accelerated deadlines. Projects must begin construction within 12 months of enactment or be placed in service by December 31, 2027. The 45X advanced manufacturing credit also remains, but wind component credits phase out after 2027.
  • Phase-Out of EV and Efficiency Incentives: After December 31, 2025, tax credits will no longer be available for electric vehicles (EVs), charging stations, residential energy efficiency improvements, or energy-efficient homes.

Industry Impact

The bill’s provisions are set to reshape strategies across the energy industry. For oil and gas, expanded lease sales may drive increased production, but companies must carefully assess the impact of reinstated royalties on long-term project economics. At the same time, new prohibited foreign entity (PFE) rules elevate the importance of supply chain diligence, with many developers likely needing to reconfigure procurement practices to maintain tax credit eligibility.

On the clean energy side, stability in the 45Q credit provides confidence for capital-intensive carbon capture projects, supporting investment and financing decisions. However, renewable developers face compressed timelines to qualify for production and investment tax credits, creating urgency in project execution and supply chain coordination. The phase-out of tax credits for EVs, charging stations, and residential efficiency improvements after 2025 could also dampen near-term adoption, requiring companies to reassess demand expectations and adapt their business models.

Navigating the New Energy Landscape

The Act presents both opportunities and challenges across the energy value chain:

  • Oil and gas producers may benefit from expanded lease sales but face tighter cost considerations.
  • Renewable energy developers must accelerate project pipelines to meet new deadlines.
  • CCS projects gain confidence from long-term policy stability.
  • EV and efficiency markets will need to adapt quickly as incentives decline.
  • All energy players will need to strengthen compliance and supply chain management under the new PFE rules.

While certain credits have been phased out, others remain stable or accelerated, creating a mix of risks and opportunities. Energy companies that act now—by reassessing strategies, aligning timelines, and reinforcing compliance—will be better positioned to succeed in this evolving regulatory and tax environment. The Act underscores a broader shift: agility, planning, and supply chain resilience are becoming as important to success as technology and capital deployment.