US oil and gas industry an unlikely beneficiary of new climate bill

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The climate measure President Biden signed this week bypasses the administration’s concerns about emissions and guarantees new drilling opportunities in the Gulf of Mexico and Alaska.

The sun sets at Chalmette refinery in Chalmette, La., located just over the Mississippi River levee May 3, 2020. While the Inflation Reduction Act concentrates on clean energy incentives that could drastically reduce overall U.S. emissions, it also buoys oil and gas interests.

As a result, U.S. oil and gas production and emissions from burning fuels could keep growing, according to some industry analysts and climate experts. With domestic demand sliding, that means more fossil fuels exported to growing foreign markets, including from the Gulf where pollution from oil and gas activity plagues many poor and minority communities.

The measure’s importance was underscored by Chevron executives during a recent earnings call, where they predicted continued growth in the Gulf and tied that directly to being able “to lease and acquire additional acreage.” Communities near polluting industrial plants will continue to suffer if the oil and gas industry remains vibrant, said Beverly Wright, executive director of the Deep South Center for Environmental Justice and a member of the White House Environmental Justice Advisory Council. She worries that incentives in the law for technology that captures carbon from industrial processes could also perpetuate harm to these poor, mostly minority residents.

Republicans complained the administration still wasn’t holding enough sales even after a federal judge blocked Biden’s order. On Wednesday a federal appeals court struck down an injunction that had blocked the leasing suspension, but the impact could be minimal because of the new law’s mandates. Other bill provisions that focus on renewable energy and capturing carbon dioxide from industrial plants would result in net emission reductions 10 to 50 times greater than emission increases from burning more oil and gas, analysts say.

 

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