The U.S. Senate on Sunday passed a massive spending bill that would invest hundreds of billions of dollars to reshape the energy sector and try to slow climate change, creating far-reaching implications for oil and natural gas, as well as the economy broadly.

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The Inflation Reduction Act includes an estimated $370 billion over 10 years to cut greenhouse gas (GHG) emissions and accelerate the adoption of renewable energy sources. The bill aims to reduce demand for fossil fuels and steer both consumers and utilities toward renewable energy sources such as wind and solar power.

The legislation targets a roughly 40% reduction in GHG emissions below 2005 levels by 2030 and would be the most far-reaching climate legislation in the United States to date. President Biden set a goal of...