The Republican-led US Senate narrowly passed a more than $3 trillion bill today that would expand oil and gas leasing, weaken fuel-economy rules, and phase out many of the clean energy tax credits in the Inflation Reduction Act.

The Senate voted 51-50 to pass a revised version of the massive budget bill, with US vice president JD Vance casting a tie-breaking vote. US senators Rand Paul (R-Kentucky), Thom Tillis (R-North Carolina) and Susan Collins (R-Maine) joined Democrats in voting against the bill, which will now advance to the US House of Representatives for a potential final vote by the end of the week.

"The House will work quickly to pass the One Big Beautiful Bill that enacts President Trump's full America First agenda by the Fourth of July," House speaker Mike Johnson (R-Louisiana) said.

President Donald Trump has pushed for the enactment of the bill the Independence Day holiday, but suggested today that his non-binding deadline may slip. "I'd love to do July 4th, but I think it's very hard to do July 4", he said. Among the difficulties is a House rule meant to provide at least 72 hours to review a bill before starting debate, in addition to a razor-thin Republican majority in the House that could make it challenging for the bill to pass.

The Senate bill is expected to save about $560bn over a decade by ending many of the clean energy tax credits from the Inflation Reduction Act, but other tax cuts and policies in the bill are expected add more than $3 trillion to the deficit, according to estimates the non-partisan US Joint Committee on Taxation conducted on the bill as drafted on 28 June.

The bill would repeal a $7,500 tax credit for electric vehicles purchased after 30 September and zero out all penalties against automakers that fail to meet fuel-economy standards.

The bill would also end tax credits for wind and solar projects that fail to start operations by 2027. As part of a final amendment released today, Republicans said they agreed to remove an excise tax on wind and solar projects they added into the bill just days ago.

But the Senate bill softened some of the energy tax credit cuts the House voted to pass in May. Clean hydrogen projects would need to start construction by 1 January 2028 to qualify for a tax credit of up to $3/kg that developers say is critical for the industry's growth, rather than facing a House deadline at the end of 2025. In another recent change, the Senate bill is seeking a two-year extension of a biofuels tax break until 2029, rather than a four-year extension the Senate initially proposed.

The bill would expand federal oil and gas leasing by mandating twice yearly lease sales in the US Gulf of Mexico and regular onshore leases, in addition to slashing royalty rates to the lowest levels in nearly two decades. The bill would also indefinitely delay the collection of a $900/metric tonne fee on methane leaks and reinstate a federal tax deduction for "intangible" drilling costs. Another program would provide $171mn to buy crude to refill the US Strategic Petroleum Reserve, a fraction of the $1.3bn fund that was passed by the House.

Republicans initially sought to overhaul permitting through the bill, but the only program that is eligible for the filibuster-proof process used for the bill would allow industry to pay a fee to fast-track environmental reviews. The bill would also cut royalties on coal mined on federal land, provide a tax credit for metallurgical coal, repeal climate-related grant programs from the Inflation Reduction Act, and permanently extend some business tax breaks.

By Chris Knight