Energy Talking Points by Alex Epstein

Alex Epstein

Dear Chairman Smith and Chairman Crapo:

We, the undersigned American energy producers and investors, write to voice our principled support for full repeal of the Inflation Reduction Act’s (IRA) energy subsidies, including subsidies that would appear to be to our firms’ and industry’s benefit. This is the only moral and practical path forward if we are to truly unleash American energy.

In recent weeks, Congress has been embroiled in battles over which, if any, of the IRA energy subsidies to cut. Lobbyists representing every corner of the energy landscape, including trade groups that many of us are part of, are jockeying to preserve their own piece of the pie, claiming that it is uniquely valuable.

We have oil lobbyists fighting to keep carbon capture and hydrogen subsidies, solar and wind lobbyists fighting to keep solar and wind subsidies, biofuel lobbyists fighting to keep biofuel subsidies, and EV lobbyists fighting to keep EV subsidies.

If this continues, we will likely preserve most if not all of the subsidies, which, deep down, everyone knows are not good for America.

The fundamental truth about subsidies is very simple. For any product, including energy, a subsidy is just a way of taking money from more efficient producers—and from taxpayers—and giving it to less efficient producers. The result is always less efficient production and therefore higher costs or lower quality for Americans.

The most egregious example of subsidies’ destructiveness is the IRA’s solar and wind subsidies, which pay electric utilities to invest much more money in solar and wind than they otherwise would, and thus much less in coal and gas than they otherwise would. Ultimately this means higher electricity prices and certainly less electricity reliability for Americans.

The IRA subsidies’ devastating harm to American energy is more than enough to compel us, as energy producers, to oppose them.

But their harm goes far beyond energy, as they will dramatically increase our debt and ultimately undermine every aspect of our economy.

A central Congressional priority is to curb the national debt during the upcoming budget reconciliation exercise. But according to credible estimates, the IRA will cost over $1 trillion over the next decade and trillions more after that. Worse, the IRA subsidies are expected to misallocate, into uncompetitive business and jobs, $3 trillion of investment by 2032 and $11 trillion by 2050. That’s a disaster for our economy, and for real job opportunities.

Clearly, the right thing to do is to eliminate all these subsidies. When lobbyists say that these subsidies are essential for America, what they’re really saying is that their backers have made investments in projects that have no near term cost-effectiveness and that are totally dependent on indefinite subsidies to sustain themselves.

Most people know the truth, but are afraid to say it due to institutional pressures. Too many Congressmen are afraid of alienating trade groups. Too many trade groups are afraid of alienating their large and vocal members who have made investments hoping for indefinite subsidies. All the while, too few are talking about freedom.

That’s why we invite our colleagues to do the right thing: level with the American people, say that we made a mistake, and that those who built subsidy-dependent businesses took on the kind of risk that we do not want to reward.

Keeping the IRA subsidies—despite all the evidence that they benefit only special interests at the expense of America—risks making our nation ever more like Europe, where industries do not succeed by providing the best value to consumers, but by providing the best favors to politicians. That’s not the America we want to work in.

Sincerely,

Bud Brigham, Founder, Atlas Energy Services and Brigham Exploration

David Albin, Managing Partner, Spectra Holdings

Adam Anderson, CEO, Innovex International

Thurmon Andress, Chairman and CEO, Andress Oil

Don Bennett, Managing Partner, Bennett Ventures LP

Greg Bird, CEO and President, Jetta Operating Company

David de Roode, Partner, Lockton

Andy Eidson, CEO, Alpha Metallurgical Resources

Matt Gallagher, President and CEO, Greenlake Energy

Mike Howard, CEO, Howard Energy

Justin Thompson, CEO, Iron Senergy

Ed Kovalik, CEO, Prairie Operating Company

Thomas E. Knauff, Executive Chairman, EDP

Lance Langford, CEO, Langford Energy Partners

Mickey McKee, CEO, Kodiak Gas Services

Mike O’Shaughnessy, CEO, Lario Oil and Gas Company

D. Martin Phillips, Founder, EnCap Investments LP

Karl Pfluger, midstream executive

David Rees-Jones, President, Chief Energy

Rob Roosa, CEO, Brigham Royalties

Bobby Shackouls, Former CEO, Burlington Resources

Ross Stevens, Founder and CEO, Stone Ridge Holdings Group

Kyle Stallings, CEO, Desert Royalty Company

Justin Thompson, CEO, Iron Senergy

Mike Wallace, Partner, Wallace Family Partnership

Ladd Wilks, CEO, ProFrac

Denzil West, CEO, Admiral Permian Operating

Bill Zartler, Founder and CEO, Solaris Oilfield Infrastructure

Additional signatories (email [email protected] to add yours):

Jimmy Brock, Executive Chairman, Core Natural Resources

Ted Williams, President and CEO, Rockport Energy Solutions LLC

To make sure as many politicians as possible see this letter, help us by sharing on Twitter/X and tagging your Congressmen! Congress is currently undecided about what to do about the IRA subsidies, so now is the moment to make your voice heard.

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