Climate change? The Inflation Reduction Act's surprise winner, the US oil and gas industry.

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

Climate bill to boost US oil and gas industry

It came at a pivotal time for Chevron, Exxon and other industry players: The Biden administration had curtailed opportunities for new offshore drilling, while raising climate change concerns. To the industry, the new law signals Democrats are willing to work with them and abandon the notion fossil fuels could soon be rendered obsolete, said Andrew Gillick with Enverus, an energy analytics company whose data is used by industry and government agencies.

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."Subscribe to USA TODAY’s free weekly newsletter on climate change, the environment and the weather

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.

A stream of potential drilling sites is crucial for companies to maintain future production because wells can take years to develop and some yield nothing, said Jim Noe, an industry lobbyist who worked with Senate staff on the climate bill's leasing provisions.

 

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