NOIA praises Manchin’s Inflation Reduction Act provisions

Written by Nick Blenkey
Manchin gets pen used to sign Inflation Reduction Act

C-Span cameras captured Senator Joe Manchin receiving pen used to sign Inflation Reduction Act into law.

When President Biden signed the Inflation Reduction Act into law, among those coming away from the ceremony with a signing pen as a souvenir was Sen. Joe Manchin (D-W.Va.), who cosponsored the legislation with Sen. Chuck Schumer (D.-N.Y.). As passed, the legislation has a lot in it for the U.S. offshore industry to like, and National Ocean Industries Association (NOIA) president Erik Milito paid tribute to Manchin’s efforts in passing it.

“The Inflation Reduction Act puts in place a framework for continued development of U.S. offshore oil and gas, mechanisms to advance offshore wind, and incentives to spur offshore carbon sequestration innovation,” said Milito. “No legislation is perfect, but the IRA’s offshore energy provisions will enable continued investment in U.S. energy projects by an industry that is already solving, scaling, and deploying low carbon energy solutions. We applaud the leadership of Sen. Manchin and his team for shepherding this legislation from concept through enactment. We hope Congress can build on this by passing a bipartisan, common-sense package of permitting reforms to fully realize our energy potential. NOIA stands ready to work to deliver on those efforts as well.”

Manchin’s office says that he also secured a commitment from Biden, Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi to move a comprehensive permitting reform package before the end of the fiscal year on September 30, 2022. More on the permitting reform legislation here.

Meantime, the Inflation Reduction Act includes several NOIA priorities that would strengthen the outlook for the American offshore energy industry, including:

  • Lease Sale 257 is reinstated and high bidders must get their lease;
  • A new royalty minimum offshore of 16.66%, with a maximum of 18.75%; and
  • Lease sales 258, 259, and 261 must be held. Lease Sale 258 would occur no later than December 31, 2022, Lease Sale 259 would occur by March 31, 2023, and Lease Sale 261 by September 30, 2023.
  • The offshore wind leasing moratorium in the Southeastern U.S. and Eastern Gulf of Mexico is lifted;
  • There is an increase in staffing money for BOEM and NOAA;
  • Extension of Production Tax Credits (PTC) for offshore wind;
  • New tax credits for offshore wind vessels; and
  • OCSLA is amended to allow for wind lease sales offshore U.S. territories.
  • Increases the federal 45Q tax credit to $85/ton if wage/apprenticeship requirements are met and construction commences before January 1, 2033; and
  • Direct pay is available for the first five years after the project is placed in service. There is no
  • direct pay for final seven years except for nonprofits and co-ops, which can receive all 12 years.
  • In order to issue an offshore wind lease, an oil and gas sale of 60 million acres (roughly an area-wide Gulf of Mexico lease sale) must have been held in the prior year. This tie-in runs for 10 years.
Categories: Legislation, News, Offshore Wind, Oil & Gas Tags: , , ,