When President Joe Biden signed the Inflation Reduction Act into law on Aug. 16, his signature opened the door to reinstating the largest oil and gas lease sale in U.S. history, which had been blocked by a court because of climate impact concerns.
The Inflation Reduction Act includes provisions that direct spending, tax credits, and loans to bolster technologies such as solar panels and equipment to cut pollution at coal- and gas-powered power plants.
But the legislation also contains a provision that reinstates the previously halted Lease Sale 257, the biggest offshore oil and gas lease in U.S. history, spanning nearly 81 million acres in the Gulf of Mexico.
Lease Sale 257, which sold at auction for $192 million in March 2019, was challenged by environmental groups, which argued that the sale violated federal law by relying on an inadequate environmental impact review that failed to accurately consider greenhouse gas emissions.
Contreras’s ruling blocked the lease and the Biden administration didn’t appeal. But by signing the Inflation Reduction Act into law, Biden has effectively revived the lease.
NOIA also pointed to a handful of other lease sales that now must be held because of the enacting of the Inflation Reduction Act (IRA) after the Biden administration canceled them in May, when prices at the pump were soaring to record highs.
The association’s chief generally gave a passing grade to the legislation for putting in place what he described as “a framework for continued development of U.S. offshore oil and gas, mechanisms to advance offshore wind, and incentives to spur offshore carbon sequestration innovation.”
The IRA increases federal tax credits for carbon capture and storage while lifting a moratorium on offshore wind leasing in parts of the southeastern United States and the Gulf of Mexico.
“No legislation is perfect, but the IRA’s offshore energy provisions will enable continued investment in U.S. energy projects by an industry that is already solving, scaling, and deploying low carbon energy solutions,” NOIA President Erik Milito said in a statement.
The American Petroleum Institute (API), a fossil fuel industry group that appealed on behalf of the firms involved in the blocked Lease Sale 257, expressed relief that the IRA revives the sale but reservations about the overall impact of the measure.
“While reinstating lease sale 257 is a positive step forward for American energy leadership, the legislation as a whole falls well short of addressing America’s long-term energy needs,” API Senior Vice President of Policy, Economics, and Regulatory Affairs Frank Macchiarola told The Epoch Times in an emailed statement.
The Inflation Reduction Act requires the reinstatement of Lease Sale 257 within 30 days of the legislation’s enactment.
