Inflation Reduction Act ties renewable energy projects to more oil lease sales

Touted by the Environmental Protection Agency as “the most significant climate legislation in U.S. history,” the Inflation Reduction Act also contains a variety of concessions to Big Oil companies. Buried within the legislation is a set of provisions that ties the advancement of some future renewable energy projects to increased American oil and gas production.

“So buried very deeply in there is this provision for any further offshore wind lease, granting that 60 million acres of offshore lands must be offered for offshore oil and gas development,” Clean Ocean Action Executive Director Cindy Zipf said. “That has the potential of almost doubling our current amount of offshore oil and gas drilling. So, in order to get more offshore wind, we’re going to have to allow more offshore oil and gas drilling, which we have fought for decades since we started.”

As a prerequisite for issuing any offshore wind leases, the law stipulates that the Department of the Interior must have held a lease sale for offshore oil totaling at least 60 million acres in the previous year. This requirement is set to remain in place throughout the 10 year lifespan of the Inflation Reduction Act.

“The average offshore lease is about 100,000 acres or so,” Zipf said. “So, if you lease something for offshore wind at 100,000 acres, but you’re going to allow 60 million acres of oil?  What’s the point?  If you’re trying to reduce fossil fuel dependency, what is the point of tying those two things together?”

Additional provisions place restrictions on new land-based wind and solar projects until millions of acres of land have been leased for oil and gas purposes in the previous 120 days. The required amount offered to oil companies must total either 2 million acres, equivalent to about the size of Yellowstone National Park, or cover at least half of the total area that industry groups have expressed interest in.

Failure to fulfill these requirements could result in the suspension of renewable energy projects on public lands and waters.

“This is a climate suicide pact,” said Brett Hartl, government affairs director at the Center for Biological Diversity. “It’s self-defeating to handcuff renewable energy development to massive new oil and gas extraction. The new leasing required in this bill will fan the flames of the climate disasters torching our country, and it’s a slap in the face to the communities fighting to protect themselves from filthy fossil fuels.”

The legislation also extends concessions to the oil and gas industry concerning previously illegal offshore development. This includes the reinstatement of a 2021 Gulf of Mexico oil lease sale, which had been invalidated by a federal judge due to the Interior Department’s failure to transparently disclose the potential greenhouse gas emissions resulting from the lease.

“[The Interior Department] basically said, and then the court said that this is nonsense, that adding more offshore oil and gas would have no effect basically, on the climate, or overall emissions,” Hartl said. “And the courts were like, ‘yeah, pretty sure if you, you know, pull billions of gallons of oil out of the ground, you’re gonna have a climate impact.’ You can’t just say it’s sort of a wash, and it doesn’t matter.”

Sen. Joe Manchin, D-W.Va., a pivotal figure in the passage of the bill within an evenly split Senate, asserted his role in securing these stipulations for the oil industry.

Manchin contends that these measures will enhance American energy security and generate revenue to support U.S. education, as well as contribute to the Land and Water Conservation Fund.

“I’ve been concerned about efforts by the Administration to throttle back oil and gas leasing and production, so I made sure the Inflation Reduction Act tied the ability to issue wind and solar leases to whether or not [the Interior Department] is holding significant oil and gas lease sales,” Manchin said.

However, opponents of the legislation’s oil and gas leasing provisions remain skeptical. The Center for Biological Diversity intends to challenge every offshore oil lease granted under the Inflation Reduction Act through legal action. They argue that such leasing could have detrimental effects on climate and the environment.

“More oil and gas leasing is completely incompatible with maintaining a livable planet, so we’re forced to fight this,” Hartl said. “This deal is unacceptable. If it passes, we’ll fight every single lease the Interior Department tries to approve. Our climate and the health of our communities depend on it.”

The intention of the Center for Biological Diversity to pursue litigation sets the stage for a potential legal battle that could extend for years, coinciding with the potential lease of hundreds of millions of acres for offshore oil and gas production over the next decade.