In August, President Biden signed the Inflation Reduction Act into law which, among other things, has the goal of combatting the climate crisis in the United States. With provisions establishing clean energy development and manufacturing tax credits for communities transitioning away from fossil fuel economies, incentives for rural electric cooperatives switching to clean energy, and a shoring up of healthcare benefits for coal miners. The Act is an important step on the nation’s path towards energy transition. Within Appalachia—the mountainous, coal-intensive region encompassing thirteen eastern states—many communities are celebrating the Act as a historic investment for rural energy transition. However, the politics surrounding the Act reflect the region's history of exploitation by playing a role in promoting outsider interests, leaving many in the region wary.

Appalachia’s History of Energy Exploitation

Appalachia is a resource-rich area, but a history of exploitative practices has resulted in high poverty rates and poor health outcomes. Since the 1800’s, industries have taken advantage of the region by extracting natural resources to use elsewhere. The primary example of this being the coal industry, on which the region became very dependent. Although “the nation’s development benefited from coal, it was coal communities that suffered almost all direct, environmental, and human costs (e.g., natural resource destruction, crippling injuries, black lung disease, economic decline).” Some of these issues stem from absentee corporate land ownership, as well as the separation of surface and mineral rights, which allows outside corporations to profit from the destruction of the land without being held responsible for the environmental disasters and economic decline that inevitably follows. For Appalachian communities to thrive, there must be a just transition away from dependence on outsider, fossil fuel corporations, towards more sustainable forms of industry.

The Inflation Reduction Act

The Inflation Reduction Act is one of the largest US public investment proposals ever passed for the energy sector, and it has the potential to yield numerous benefits across Appalachia. One analysis estimates that the Act’s energy and environmental investments will generate millions of jobs, including more than 90,000 jobs for rural electric cooperatives to support clean energy and economic development in rural communities, and more than 30,000 jobs from grants for community-led projects that address the disproportionate health and environmental impacts from pollution. In the weeks after the Act passed, a few corporations announced large scale projects in compliance with the legislation’s scope. One example is Piedmont Lithium announcing plans to open a plant in Tennessee to create jobs and to help mitigate battery supply shortages in the American EV industry. First Solar, a solar manufacturer, also plans to invest $1.2 billion in a new factory, as well as upgrades to existing Ohio factories, in response to the tax incentives passed under the Act. This will not only create jobs, but increase American solar technology production, thereby supporting clean energy.
Furthermore, past analysis found that wind and solar-driven economic development could generate tens of billions of dollars, with the benefits in Appalachia being greater than in any other US region. This is especially relevant as, according to a Wood Mackenzie report, the solar incentives within the Act will result in a 67% increase in solar additions between 2022 and 2032—although the numbers will take a few years to scale.

Appalachia’s Political Burden

While the Inflation Reduction Act provides Appalachian communities with the resources to work towards transitioning away from its fossil fuel dependency, political dealings may have gotten in the way. In July, Democratic Leadership struck a deal with the Senate Energy and Natural Resources Chair, Joe Manchin (D-W.Va.), who was previously a holdout on any climate legislation, to get the necessary votes to pass the Act. In exchange for Senator Manchin’s vote, it was agreed that Democratic leaders would attach “permitting reform” legislation to an upcoming government funding bill. This permitting “reform” is meant to expedite energy projects, including finishing the construction of the Mountain Valley Pipeline (MVP) which is slated to transport natural gas from “West Virginia shale reserves to energy markets in mid-Atlantic states.”

The proposed pipeline is about 303-miles long, involves nearly 400 stream, river, and wetland crossings, and would cross thousands of parcels of private land in West Virginia and Virginia. Furthermore, the pipeline is owned by several large investment companies based in different states. Machin insists that the over $6.6 billion dollar pipeline is necessary to maintain a reliable and affordable energy system, but reports show that allowing the pipeline’s completion would do little to advance these goals. The pipeline does, however, present very real environmental dangers relating to water pollution and destruction of land—MVP has already been cited more than 300 times for water quality and protection violations. As the Southern Environmental Law Center argues, the MVP “is an irresponsible project that threatens public health, environmental justice, and our region’s water and land. MVP would contribute to climate change at a time when we should be fighting it. The Mountain Valley Pipeline is obsolete, irresponsible, and dangerous.”

As of today, Senator Manchin is the top recipient of oil and gas industry donations in Congress, with more than $338,000 in donations from the natural gas industry alone. Many across the region argue that Machin’s support for the project is based on his fossil fuel donor’s demands rather than any real value the pipeline has for US energy. In light of Appalachia’s history of extractive and exploitative policies, there has been fierce opposition to the pipeline within the region, but the Democratic leaders said they intend to honour the deal with Manchin.

There is no denying that the Inflation Reduction Act is a historic investment for energy transition in the nation, but the politics surrounding the deal have seemingly shifted additional costs onto the Appalachian region once again. While there has been growing opposition to Senator Manchin’s proposed measure, it remains to be seen whether the opposition will be enough for other lawmakers to vote down the upcoming legislation.