The IRA would bring long-sought regulatory certainty to oil industry

Aug 12, 2022

As the Inflation Reduction Act nears final passage in the House, the climate and energy provisions of the bill will ensure something that the oil industry and its supporters in Congress have long dreamed of: regulatory certainty.

For years, oil executives and their allies in Congress have stressed the importance of regulatory certainty for extractive industries, especially oil and gas drilling. Companies including ConocoPhillips, Chevron, BP, and Occidental Petroleum, along with trade groups like the American Petroleum Institute, American Exploration and Production Council, and the Independent Petroleum Association have all called explicitly for “regulatory certainty” under the Biden administration.

Now, with Congress about to overhaul the century-old public lands oil and gas leasing system, locking in new leasing rules for at least a decade, these CEOs and politicians will finally get their wish. Please don’t hesitate to reach out if you want to talk more about the oil and gas leasing provisions in the Inflation Reduction Act. 

ConocoPhillips CEO Ryan LanceJuly 26, 2022:

“What we need from government is stability and predictability. Sensible, predictable regulatory policies can foster a better investment environment. For example, from December 2019 to April 2020, oil prices fell from around $70 to $19 per barrel. Few industries ever see such a huge percent of revenue disappear so quickly. Drilling permits alone are not enough. To encourage investment, government should resume orderly and consistent leasing of federal lands for exploration and development—and not sporadic and inconsistent—and expedite permitting approval not only for drilling, but also for the pipelines, roads and other infrastructure needed to facilitate new oil and liquefied natural gas production. These investments are typically longer cycle and require even greater regulatory certainty.

BP AmericaAugust 1, 2022:

“We applaud Senate lawmakers for making progress toward a historic climate deal. BP has actively advocated for Congress to pass strong climate legislation and supports regulatory certainty. We will continue engaging constructively with policymakers to advance these measures as we aim to provide the world with secure, affordable and lower carbon energy.”

Chevron Advocacy Network,January 2021:

“In the Gulf of Mexico, our business plans are based on the current lease portfolio. Ensuring timely approval and regulatory certainty associated with routine permitting will remain essential…. In our Permian Basin, San Joaquin Valley, and Rocky Mountain areas of operations, federal leases comprise a smaller but still important part of our total acreage position. Across America, regulatory certainty is a critical component of responsible oil and gas development that benefits the entire country.” 

Occidental Petroleum CEO Vicki HollubApril 27, 2021:

“Retaining clarity for continuing operations is important while we aggressively work toward a collective transition plan. To that end, administration action should provide regulatory certainty in the short- and long-term, rather than a moratorium with no stated end date.”

American Petroleum InstituteMay 27, 2022:

The oil and natural gas industry depends on regulatory certainty when making long-term investment decisions for meeting the domestic energy needs of the nation and supporting our allies.”

American Exploration and Production Council CEO Anne BradburyApril 15, 2022:

“To really unleash American energy, the Biden Administration should continue to hold ongoing lease sales pursuant to the Mineral Leasing Act, issue permits more expeditiously, and provide consistent regulatory certainty.”

Independent Petroleum Association of America Vice President Dan NaatzAugust 25, 2021:

“Development is a multi-year capital-intensive process and for these businesses to continue to invest and produce energy for Americans, they need regulatory certainty.”

House Minority Leader Kevin McCarthyMay 17, 2022:

“With an incompetent administration in the White House attempting to squeeze their access to capital and providing no long-term regulatory certainty, the oil and gas industry is simply unable to significantly ramp-up production in the short term. We know how to solve this problem.”

Sen. Shelley Moore CapitoApril 6, 2022:

“We need to incentivize American energy infrastructure buildout, drill on federal lands, and provide regulatory certainty.”

Sen. James LankfordApril 7, 2022:

“Putin’s invasion of Ukraine made prices even worse…. We need long-term policy changes like common sense regulations on pipelines, preventing the Federal Reserve from cutting off access to capital for oil and gas companies, opening up federal lands to energy exploration, and providing regulatory consistency to allow US energy producers certainty to invest again.”

Learn more

STATEMENT and ANALYSIS of Senate climate agreement – Center for Western Priorities

STATEMENT on Senate passage of the Inflation Reduction Act – Center for Western Priorities