Why Offshore Drilling Opponents Are Dismayed Over the Inflation Reduction Act

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An oil platform in the Gulf of Mexico, at sunset. I.e. a visual metaphor for sunsetting fossil fuels.

The Inflation Reduction Act has been widely described as the largest piece of climate legislation ever passed in the U.S. It contains “the most substantial federal investment in history to fight climate change,” wrote the Associated Press on the day President Joe Biden signed the bill. Biden himself called it “the biggest step forward on climate ever.”

At first glance, it seems like something environmental advocates should be over the moon about: The U.S. is finally doing national climate policy! Yet certain key provisions in the IRA have climate experts and advocates alike worried. Or, in some cases, more than worried.

“I’m incredibly disappointed, to be honest,” Cyn Sarthou, executive director of the nonprofit group Healthy Gulf said in a phone call with Gizmodo. Sarthou’s organization is focused on environmental conservation, restoration, and justice in the Gulf of Mexico and the surrounding region. When asked if anything about the IRA is good news, Sarthou responded, “No, not for the Gulf.”

That’s because sections of the bill actually require more fossil fuel drilling. The IRA mandates that four offshore oil and gas lease sales in the Gulf of Mexico and Alaska, which had previously been canceled, now go forward (see: section 50264 on page 242).

Plus, the IRA ties the next decade of federal solar and wind development to even more fossil fuel projects (see: section 50265, page 244). Under the bill, new wind or solar projects on federal land or in federal water are only allowed after a minimum amount of oil and gas leases have been offered. This applies to both on and offshore energy development. For example, new offshore wind lease sales can only move forward if an offshore fossil fuel lease sale of at least 60 million acres has been held in the past year.

The largest piece of climate legislation in our national history mandates that we keep expanding oil and gas extraction. Even as scientists and policy experts worldwide repeatedly emphasize that’s exactly what we shouldn’t be doing, if we want to avoid the worst impacts of climate change.

For anti-drill advocates, the IRA forces “compromise” out of what should’ve been non-negotiable. “They’ve chained renewable energy to the continuance of fossil fuels,” said Sarthou. It’s what the Center for Biological Diversity has termed the bill’s “poison pill.” If U.S. policy requires fossil fuel expansion in the transition away from fossil fuels, is there really any transition planned at all?

What Does the IRA Do for Climate?

The approximately $375 billion in climate-related investment is significant, though a far cry from the $2 trillion plan that Biden initially proposed. Through policies and incentives promoting things like clean energy expansion, electric vehicle adoption, domestic battery and solar panel manufacturing, and improved energy efficiency, the legislation is a big proverbial carrot that the Democrats are hoping will lure the nation away from decades of reliance on fossil fuels.

“One of the big ways that we can reduce drilling in the Gulf of Mexico and elsewhere is to reduce the demand for oil and gas,” Chris Eaton, a senior environmental attorney at the advocacy nonprofit Earth Justice, said in a phone call with Gizmodo. “The IRA has a lot of stuff in there that’s going to do that.”

It’s an ambitious policy that includes some exciting things. For instance, one provision might get millions of households switching over to wondrous heat pumps. And, all in all, three independent, non-governmental analyses have determined that the bill will cut U.S. carbon emissions by about 40% compared with peak 2005 levels over the next eight years. There are some caveats to that figure, however: Between 2005 and 2020, U.S. CO2 emissions had already decreased by about 21%. And, pre-IRA, we were on track for more emissions reductions nationally, thanks to the ever-dropping cost of clean energy (but also because we’ve exported lots of our emissions to places like China, along with our production of goods). Global annual emissions have not been decreasing.

And whether or not the legislation actually leads to those additional projected emissions reductions depends on how quickly consumers and industries adopt the newly incentivized improvements. Change can take time, especially when it’s all carrot and no stick.

The IRA’s true impact will also rely on the outcome of promised technologies that have yet to fully materialize. There’s a chunk devoted to controversial carbon capture and storage, which hasn’t yet actually delivered on capturing and storing CO2 nearly at the scale experts say is necessary. The largest operational direct air capture plant only sequesters a measly 4,000 tons of CO2 annually, and each ton costs $100.

Even with those conditions, if the bill “not had the drilling pieces in there, then it would be a lot easier to say ‘oh, it’s a landmark climate bill,’” said Eaton. “But these things definitely temper the enthusiasm.”

What It’s Meant for Anti-Drill Advocates

The fight against offshore drilling has been a pillar of environmental activism and fodder for legal battles in recent years. Extracting fossil fuels from beneath the ocean is a profoundly dirty and ecologically risky endeavor, as so many oil spills have demonstrated.

Even when everything goes according to plan, the offshore industry can have devastating local effects. People living along the Gulf in Louisiana and Texas, for instance, are subject to some of the worst air pollution in the country, thanks to petroleum refineries.

For those like Sarthou, who’ve been working to stop offshore drilling, the new bill feels like a betrayal. She cited local organizers who’ve said they’re “demoralized by this.” These are people who’ve worked for years in the Gulf region to stop fossil fuel expansion in their backyards, “and they’ll tell you they’ve been winning victories against the oil industry—but this undercuts those victories.”

Kristen Monsell, a senior attorney at the Center for Biological Diversity, feels similarly. The Center is one of the nonprofit groups that’s sued the Department of the Interior over offshore drilling. Recently, they got a big victory, with the overturning of lease sale 257 in the Gulf—which would be the largest single offshore fossil fuel lease sale in national history. “We won that lawsuit because the court held that the agencies failed to adequately consider the impacts to our climate,” Monsell said, calling the win “tremendous.”

Yet now, lease sale 257 has to move forward, according to the IRA. “Frankly, it’s just a slap in the face,” Monsell added—to her, but mostly to the predominately Black and poor frontline Gulf communities who will face the worst consequences of continued oil and gas development. In her view, no amount of mitigating provisions in the bill can make up for the drilling requirements. “More oil and gas drilling is fundamentally inconsistent with addressing the climate emergency, and fundamentally inconsistent with addressing environmental justice,” she said.

The Fight Continues

“We are not a sacrifice zone. [The federal government] needs to stop putting the onus of a polluting industry on the communities of the Gulf,” said Healthy Gulf’s Sarthou. The IRA “may change our timeline a little bit, but I don’t think it changes our goal, which is that there need to be no new lease sales in the Gulf of Mexico.” Other sources echoed Sarthou and said that their organizations will continue to fight offshore drilling in the region. It’s just a matter of regrouping and adjusting their strategies.

Dustin Renaud, the communications director for Healthy Gulf, offered that maybe there’s room to bring back an export ban on U.S. oil (which had previously been in place for 40 years, up until 2015). If the IRA brings down fossil fuel demand domestically and we can’t sell it elsewhere, it doesn’t matter if offshore oil leasing is allowed—companies won’t have any reason to buy those leases.

For Monsell, she sees monkey-wrench possibilities in pushing the Department of the Interior to limit production intensity, even at existing offshore drill sites, as well as in continuing to rely on the National Environmental Policy Act (NEPA) to get new lease sales paused. NEPA has already been the basis for some of the advocacy groups’ recent offshore court wins, like a ruling in the Washington D.C. Circuit Court of Appeals that retroactively deemed two 2018 lease sales unlawful on August 30.

Eaton agreed. “There are still legal problems with lease sale 257, even with the IRA. So I think there’s still fight to be had,” he said. “The IRA does not exempt [any lease sales] from complying with NEPA and other environmental laws… so we’ll hold them accountable if there’s not compliance.” In trying to imagine silver linings, he also expressed hope that the IRA could have a domino effect on the international stage.

“It’s probably not just that we’re gonna reduce domestic demand, everything is going to be exported, and the rest of the world is going to continue to burn oil at a higher rate,” Eaton theorized. Maybe instead “because the U.S. is reducing its demand, other countries will see that, and will enact policies to also reduce their own use.”

Ultimately, even though the IRA contains big setbacks for anti-drill advocates, the legal fight against fossil fuels has always been about finding “a way to thread the needle,” said Eaton. The challenge of managing a rapidly changing policy landscape is all part of the job. “There is a good way and a bad way that Interior can implement the IRA leasing provisions,” he added. Environmental groups will continue doing what they can to not leave that outcome up to chance.



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