On Wednesday, December 20, Congress passed H.R. 1, the Tax Cuts and Jobs Act. The bill represents the most comprehensive reform to the tax code in almost three decades and a legislative victory for both the Republican Congress and the Trump administration. At a high level, the bill reduces the overall corporate rate from 35 percent to 21 percent starting in 2018 and introduces a 20 percent deduction for qualified pass-through businesses.

Yet the early reactions to the bill have largely not considered its impact on the energy sector. Below are the provisions included — or omitted — in the bill of particular concern to energy stakeholders.

Alternative Minimum Tax Repealed; Percentage Depletion Deduction Remains

In conference committee, language repealing the Alternative Minimum Tax, an effort supported by many energy sector stakeholders, was introduced and ultimately included in the bill. The percentage depletion deduction, which provides a major incentive for the mining and oil and gas sectors, remains untouched.

Arctic National Wildlife Refuge Cleared for Drilling

The bill also included language opening the Arctic National Wildlife Refuge to oil and gas drilling. Though this provision was a major sticking point, Senator Lisa Murkowski, R-AK, fought hard to include it, as it is expected to raise $1 billion in revenue over 10 years.

Renewable Energy Sector Protects Incentives

The renewable energy sector protected its primary incentives, as both the investment tax credit and production tax credits were left intact. However, there remains increasing concern over the impact of the broader bill on investors’ ability to take advantage of those credits. Expansion of the Base Erosion Anti-Abuse Tax (BEAT), which is intended to eliminate loopholes for overseas companies, is expected to impact renewable investment, although its full effect is less certain.

‘Tax Season’ in Congress Likely to Continue in 2018

While passage of the bill marks the completion of this legislative package, it will not be the end of the tax debate. Congress is expected to consider an “extenders package” in 2018 that will address temporary incentives as and a technical corrections bill to address smaller issues that arise as a result of the reform package.