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The Center for Western Priorities and other conservation groups agree that the most problematic parts of the Inflation Reduction Act are provisions that link renewable energy leasing and permitting to ongoing sales of oil and gas leases. The link was a demand from Sen. Joe Manchin of West Virginia, who wanted to lock in future oil and gas production on national public lands and waters.
But Jake Bittle, writing at Grist, points out that it's not clear that the oil industry is very interested in what Manchin won for them in the final bill. Offshore, where the bill requires the Interior Department to offer 60 million acres of new leases every year, the amount of acreage leased has declined steadily over the last decade as leases expire and oil companies decline to renew them.
40 percent of U.S. oil production now comes from the Permian Basin in Texas and New Mexico, which does include public lands. But large companies like ExxonMobil are focusing their efforts in countries like Guyana and Suriname, where less-mature oil fields provide the prospect of oil that is cheaper and easier to drill.
“In terms of oil, our view is that virtually all of the highly prospective [onshore] acreage is already leased and held,” said Raoul LeBlanc, a former strategist for Anadarko Petroleum who is now an industry analyst at S&P Global. “In that sense, opening up a lot of auctions for more development is unlikely at this point to yield a lot of actual activity.”
And as CWP Deputy Director Aaron Weiss points out, the Inflation Reduction Act's overhaul of the onshore leasing system creates new incentives against speculative leasing, where companies lock up public lands that are unlikely to ever produce oil. If the bill becomes law, companies will have to pay $5 per acre to nominate lands for leasing. Currently, nominations are free, and often anonymous. The bill also significantly raises the cost of holding onto a non-producing lease, rising after 2 years, then again after 8 years, creating a “use-it-or-lose-it” incentive to return leases that are not profitable.
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The tension lies in thinking that it’s an either/or. It’s a false dichotomy that we can’t have ranching and bison, we can certainly have both. Even in these areas that are human dominated, there can still be room for these large animals as well.”
