Where the New Climate Law Means More Drilling, Not Less.
HOUMA, La. — Justin Solet planted his foot on the edge of his camouflage green boat in Bayou Chauvin and pointed to a natural gas rig protruding from the waters ahead. A web of pipelines and rusted storage tanks jutted up from the marsh behind him as a shrimp boat floated past and markers for crab traps bobbed on the water’s surface.
“We are water people,” said Mr. Solet, 37, a member of the United Houma Nation, a Native community with many shrimpers, oyster farmers and crab fishers who depend on the Gulf of Mexico’s bounty. “This is their livelihood. And it’s right next to these tanks that I don’t think have been fixed or serviced in years.”
Oil and gas wells and drilling equipment are a persistent threat to the fishing industry in the Gulf. In addition to the 2010 Deepwater Horizon disaster, there have been dozens of less-noticed oil spills. Last month, on the first day of Louisiana’s inshore shrimp season, a tank platform collapsed, pouring 14,000 gallons into Terrebonne Bay and ruining the catch.
Now, more drilling may be on the way.
Under a new climate and tax law, the federal government will lease hundreds of millions more acres for offshore drilling in the Gulf in the next decade, even as it invests $370 billion to move the country away from fossil fuels and develop wind, solar and other renewable energy.
More Gulf leasing was among the concessions that Democrats and President Biden made to Senator Joe Manchin III of West Virginia, a Democrat who champions fossil fuels and whose vote for the legislation was crucial in the evenly divided Senate.
It came despite Mr. Biden’s promise as a candidate to end new drilling on public land and in federal waters “period, period, period.” And it came even though Deb Haaland, who will oversee the leasing as the interior secretary, said as a congresswoman in 2020 that “we need to act fast to counteract climate change and keep fossil fuels in the ground.”
The leasing also follows a warning from the International Energy Agency that nations must stop approving new fossil fuel projects if the world has any hope of keeping the average global temperature from increasing 1.5 degrees Celsius above preindustrial levels. That’s the threshold beyond which scientists say the likelihood of catastrophic climate impacts increases considerably. The planet has already warmed 1.1 degrees Celsius.
The new law condemns communities like Houma, which are already dealing with storms made more intense by climate change, to continued reliance on oil and gas drilling, even as other parts of the United States race toward renewable power, said Cynthia Sarthou, executive director of Healthy Gulf, an environmental organization based in New Orleans.
What’s in the Inflation Reduction Act
A substantive legislation. The $370 billion climate, tax and health care package that President Biden signed on Aug. 16 could have far-reaching effects on the environment and the economy. Here are some of the key provisions:
Auto industry. Until now, taxpayers could get up to $7,500 in tax credits for purchasing an electric vehicle, but there was a cap on how many cars from each manufacturer were eligible. The new law will eliminate this cap and extend the tax credit until 2032; used cars will also qualify for a credit of up to $4,000.
Energy industry. The legislation will provide billions of dollars in rebates for Americans who buy energy efficient and electric appliances. Companies will get tax credits for building new sources of emissions-free electricity. The package also includes $60 billion set aside to encourage clean energy manufacturing and penalties for methane emissions that exceed federal limits starting in 2024.
Health care. For the first time, Medicare will be allowed to negotiate with drugmakers on the price of some prescription medicines. The law also extends subsidies available under the Affordable Care Act, which were set to expire at the end of the year, for an additional three years.
Tax code. The law introduces a new 15 percent corporate minimum tax on the profits companies report to shareholders, applying to companies that report more than $1 billion in annual income but are able to use credits, deductions and other tax treatments to lower their effective tax rates. The legislation will bolster the I.R.S. with an investment of about $80 billion.
Low-income communities. The package includes over $60 billion in support of low-income communities and communities of color that are disproportionately burdened by climate change. Among the provisions are grants for zero-emissions technology and money to mitigate the negative effects of highways and other transportation facilities.
Fossil fuels industry. The legislation requires the federal government to auction off more public space for oil drilling and expand tax credits for coal and gas-burning plants that rely on carbon capture technology. These provisions are among those that were added to gain the support of Senator Joe Manchin III, Democrat of West Virginia.
West Virginia. The law is expected to bring big benefits to Mr. Manchin’s state, the nation’s second-largest producer of coal, making permanent a federal trust fund to support miners with black lung disease and offering new incentives to build wind and solar farms in areas where coal mines or coal plants have recently closed.
“We were really sold down the river and had to serve the role of bargaining chip without the input of folks in Louisiana,” said Jack Sweeney, an activist with the Louisiana Bucket Brigade, an environmental nonprofit organization. The group’s members traveled to Mr. Biden’s home state of Delaware last month to point out that, while Congress and the administration are enabling more drilling in the Gulf, they are protecting the Atlantic and Pacific coasts. “The treatment of coastal Louisiana is so different,” he said.
Erik Milito, president of the National Ocean Industries Association, which represents offshore energy companies, said the new law created an “even playing field” for offshore oil and gas alongside wind. His organization said oil and gas production in the Gulf was projected to average about 2.6 million barrels of oil equivalent per day through 2040, and said the industry would support an estimated 372,000 jobs in the region during that time.
As oil drilling technology improves, the physical footprint of the industry is shrinking, Mr. Milito said.
Under the new law, the Interior Department must accept by Sept. 15 the highest bid it had received last year to lease 80 million acres in the Gulf of Mexico. (The sale was canceled in January by a federal judge who ruled that the Biden administration had not sufficiently taken climate change into account, but it has been revived under the new climate law.)
Analysts have said the lease sale could produce up to 1.1 billion barrels of oil and would most likely emit 723 million metric tons of carbon dioxide into the atmosphere over its lifetime.
Ms. Haaland said this week the agency was “committed to implementing the law,” including the mandate for additional lease sales on public lands and in federal waters. Environmental groups have indicated they still plan to challenge the sale.
The new law also requires the Interior Department to lease two million acres in federal lands onshore and 60 million acres offshore each year for oil and gas development before it can approve federal leasing for wind, solar and other renewable energy projects.
Brian Deese, director of Mr. Biden’s National Economic Council, said no communities were sacrificed during negotiations over the legislation. He called the new law “the most significant legislation in American history to not only meet the moment of the climate crisis but build a clean energy manufacturing base in the United States that will power renewable energy and jobs for years.”
Mr. Deese noted that the law includes $60 billion to help low-income communities address what he called “the legacy of environmental pollution and environmental justice.”
The Interior Department this week proposed to strengthen safety regulations for offshore oil and gas drilling that were loosened under the Trump administration. Yet there is no money the in new climate law or federal plans to repair the more than 8,600 miles of active offshore pipelines that lack adequate oversight, according to government estimates.
Activists said that putting even more drilling rigs in the Gulf, where they are vulnerable to larger and more frequent hurricanes because of climate change, would lead to disaster.
The region is already home to the nation’s longest-running oil spill. Undersea wells owned by Taylor Energy have been seeping into the Gulf of Mexico since 2004, when a production platform about 10 miles off the Louisiana coast was damaged by Hurricane Ivan. More than one million gallons of crude have been collected and removed so far, and the spill is still active. When Hurricane Ida slammed into southeast Louisiana last year, it triggered 55 oil spills, including a spill near a fragile nature reserve.
Relatively small spills, like the recent one in Terrebonne Bay on the opening day of shrimp season, rarely make national news.
Mr. Milito, the spokesman for the industry group, said that aging equipment remained a problem. “It is one of the risks related to oil and gas development, but it’s a risk the industry takes seriously,” he said. Asked if the Gulf was a “sacrifice zone,” he said. “If we weren’t to continue leasing in the Gulf of Mexico we would be creating a far greater sacrifice for Americans.”
In a region tied to both fishing and oil drilling, it is perhaps unsurprising to find the annual Louisiana Shrimp and Petroleum Festival, hosted over the Labor Day weekend in Morgan City, a town about 70 miles west of New Orleans. Hundreds of people streamed beneath an overpass two weeks ago to sample fried alligator and jambalaya, tour a decommissioned oil rig nicknamed Mr. Charlie, and view the blessing of the shrimping fleet along the Berwick Docks.
Skipper Williams, 71, who said he came from a family of boat captains, said the region prided itself on both fuel and food.
“It goes hand in hand,” said Mr. Williams, who runs a sporting goods store that sells T-shirts at the festival. As for oil spills, he said, “Does it hurt? Yeah. but does it hurt forever? No.”
Told that the new climate and tax law ensured more offshore oil and gas leasing in the Gulf, Mr. Williams said: “I think that’s the right thing to do. I mean, what do you suppose, we just convert all vehicle to electricity right now? You have a hurricane down here which we have every year practically. Well, you’re not going to get very far with an electric car.”
A.J. Richard, 68, worked as a pipe fitter for oil companies throughout the Gulf Coast and overseas for 36 years. He said Mr. Biden had “shut everything down” in the oil industry and blamed the president for inflation, including the $18 he and his wife Cathy, 66, paid at the festival for two hamburgers and two orders of fries.
The couple said they were not aware that Mr. Biden had signed a law ensuring more drilling leases in the Gulf but did not believe the president deserved credit for helping the region. Mr. Richard said he believed the area’s only hope was the 2024 presidential election.
“As long as it’s a Republican — it doesn’t have to be Trump — a Republican can straighten it all back up and people can start going back to work,” said Mr. Richard, who is retired.
Wanda Presa, 46, moved to Amelia, La., from New Jersey 14 years ago and now works as captain on a riverboat casino. She said she worried about climate change but was heartened to hear that oil and gas leasing would continue in the Gulf. It means more residents may have disposable income to spend.
“If there’s more leasing in the Gulf, that means I feel a little more secure in my job,” she said.
Even some whose livelihoods have been hurt by recent spills said they want the oil industry to thrive.
At a shrimp dock in the nearby town of Dulac, Kimberly Chauvin, co-owner of the David Chauvin Shrimp Company, said she was furious about the spill on the first day of shrimp season. Fishermen she works with “woke up in the oil” that day to find the slicks had fouled their catches, and the extent of the financial damage won’t be clear until the end of the season.
“We do have a double-edged sword,” she said of the Gulf’s reliance on oil and gas as she lifted fresh shrimp from blue plastic buckets into plastic bags for customers.
But Ms. Chauvin said she was skeptical about climate change and added that oil and gas are vital to the Gulf.
“We do need more leases,” Ms. Chauvin said. “We just also need more oversight.”
Mr. Solet nodded silently as Ms. Chauvin spoke. Afterward, he acknowledged that he treads carefully with friends and neighbors. His opposition to oil and gas expansion in the Gulf already has caused friction with family members who work in the industry, he said.
“People down here don’t like to be labeled as ‘you live in a sacrifice zone,’ because what they hear is, ‘You’re coming for our jobs. You’re coming for the food on my table, the clothes on my child’s back, a way of life I love,’” he said.
Mr. Solet himself worked for nine years on oil rigs until the Deepwater Horizon spill turned him to activism. He also comes from a long line of commercial fishermen whose livelihoods he has seen altered by coastal erosion, waters that have been battered by increasingly devastating hurricanes or threatened by aging infrastructure.
“I’m afraid by the time my youngest one is 16 years old, I won’t be able to bring him here,” Mr. Solet said. “It’s going to be gone.”