The oil and gas provisions of the climate bill are a valid compromise
Senators Chuck Schumer and Joe Manchin shocked Washington on July 27 by announcing that they had reached an agreement on a climate bill. nicknamed the Inflation Reduction Act of 2022, the bill includes $369 billion in spending for climate action. If passed, it would be the most significant climate legislation in U.S. history and a key step toward the U.S. meeting the emissions reduction goal that U.S. President Joe Biden has outlined. at the Glasgow Climate Summit in November 2021.
Predictably, the bill has received a lot of attention, some of it misleading and frustrating. It represents a compromise designed to rally all 50 Democratic senators and includes some provisions intended to help fossil fuel producers. More specifically, he requires the U.S. Department of the Interior to lease 2 million acres of federal land onshore and 60 million acres offshore annually for oil and gas development (or whatever acreage requested by industry, whichever is smaller) . These quotas must be met to allow federal leasing for onshore and offshore renewable energy development, respectively.
Climate benefits far outweigh oil and gas leasing
There is a certain irony in associating new oil and gas development – a key cause of climate change – with renewable energy development – a key solution. And as you’d expect, some members of the environmental movement are screaming. “It is counterproductive to limit renewable energy development to massive new oil and gas extraction,” said Brett Hartl, director of government affairs at the Center for Biological Diversity, also called the bill a “climate suicide pact.” In an online statement, a senior scientist at 350.org called the bill is a ‘sham’ and said it ‘contains so many freebies to the fossil fuel industry’ that it ‘turns all the gains from tackling the climate crisis into a moot point’.
But many others ecologists and clean energy supporters praise the bill, and the numbers justify their praise. Energy Innovation’s analysis shows that for every tonne of emissions expected from the bill’s fossil fuel provisions, the bill will result in 24 tonnes of emissions reductions. That’s a huge net positive! One of the reasons for the strong reduction in emissions is that the bill contains provisions affecting all major emitting sectors of the economy – transport, power generation, industry, homes and buildings, and agriculture. There is something for everyone, and the broad scope of the bill results in significant emission reductions.
Harness the power of consumer demand
Another reason for the large net positive impact on greenhouse gas emissions is less obvious, but very important. The bill aims to reduce demand for fossil fuels by providing tax credits and rebates to consumers who purchase electric vehicles and energy-efficient appliances, utilities and developers who build renewable electricity and electricity storage, and to companies that build efficient factories or products. Reducing the demand for fossil fuels is the way to reduce greenhouse gas emissions.
What about the production of fossil fuels, which the bill also seems to encourage? Well, there’s no guarantee that those acres will actually be leased if the fossil fuel industry doesn’t want them, or that the leased acres will ever provide oil and gas. Oil and gas companies will make these decisions based on…wait…consumer demand.
The parts of the bill aimed at reducing the demand for fossil fuels run counter to the provisions relating to the rental of fossil fuels. It’s a weird way to write legislation, but if that’s what it takes to pass the most important climate bill of all time, so be it. As I’ve written before, ending US oil and gas production is not the way to reduce US greenhouse gas emissions. The world has plenty of oil and gas (even though it doesn’t currently) and the US will import anything it doesn’t produce, perhaps from countries with lower environmental standards and profiles. greenhouse gas emissions higher than ours. . Tackling the demand for fossil fuels is the way to reduce emissions, and this bill does just that.
Not perfect, but a good step
The bill is not perfect — a law never is. Without Republican votes, the bill must pass through the budget reconciliation process, which means the bill cannot make substantive changes to the law that do not have budget implications. So the provisions are all tax credits, fees, rebates, etc. — financial incentives to reduce emissions. The reconciliation process does not allow for direct regulation of emissions, as such regulation would not significantly involve the federal budget. And the bill completely avoids the idea of a levy or tax on carbon dioxide emissions, a policy that eminent economists agreement would be the most economically efficient way to achieve emission reductions.
However, the perfect cannot be the enemy of the good, and this bill is unquestionably good. I believe that the reductions in demand for fossil fuels that the bill would bring about would far outweigh the provisions encouraging production, and the industry may never drill much of the land that could be leased. (Remember there are more than 9,000 permits to drill on public lands today that are not being usedrepresenting nearly 12 million acres of land.) Passing this bill would be a huge win for our climate.