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Biden bans US offshore drilling and expands clean energy tax credits
US President Joe Biden has announced a new ban on all future oil and natural gas leasing from most of the US coastline. Separately, he announced plans to extend Inflation Reduction Act (IRA) production and investment tax credits to promote clean energy technologies.‘My decision reflects what coastal communities, businesses and beachgoers have known for a long time: that drilling off these coasts could cause irreversible damage to places we hold dear and is unnecessary to meet our nation’s energy needs,’ Biden said in a statement.
The areas include the entire US Pacific and Eastern Atlantic coasts, the Eastern Gulf of Mexico, and the remainder of the Northern Bering Sea along the state of Alaska and encompass more than 625mn acres.
‘The relatively minimal fossil fuel potential in the areas I am withdrawing do not justify the environmental, public health and economic risks that would come from new leasing and drilling,’ Biden continued.
The executive order would not stop new drilling in the central and western areas of the Gulf of Mexico, some of which has been mandated by Congress. The Gulf produces nearly 15% of the nation’s oil and accounts for about 97% of US offshore gas production.
Incoming President Donald Trump has said he will reverse the policy.
Biden is taking the action under the Outer Continental Shelf Lands Act of 1953, which allows US presidents to withdraw areas from mineral leasing and drilling. The law does not grant presidents the legal authority to overturn prior bans, according to a 2019 court ruling. It means a reversal would likely require an act of Congress. However, the incumbent Republican party holds a majority in both houses of Congress.
Biden widens IRA tax credits
President Biden has also announced new guidance to extend Inflation Reduction Act (IRA) production and investment tax credits (PTC/ITC) to a range of qualified clean energy technologies, including geothermal, hydropower and nuclear energy.
The tax credits encourage innovation by allowing new zero emissions technologies to develop over time, while also providing durable incentives for companies to make investments in clean energy technologies, the Treasury Department said.
US Secretary of the Treasury Janet Yellen commented: ‘The final rules issued today will help ensure America’s clean energy investment boom continues – driving down utility costs for American families and small businesses, creating good-paying construction jobs, and strengthening energy security by making the US more resistant to price shocks.’
