After the US House of Representatives passed the Inflation Reduction Act, Eric Milito, president of National Ocean Industries Association (NOIA), has said the Energy and Climate bill secures some key priorities for long-term US energy security.
Mr Milito said: “Like we said when the Inflation Reduction Act of 2022 passed the Senate, no law is perfect. However, we welcome the passage by congress of a bill that undoubtedly secures an above-ground energy framework. To promote offshore oil and gas, offshore wind, and carbon capture and storage – the key to long-term US energy security.
“We are confident that the president will swiftly sign this into law, and that America’s offshore industry will continue to do what it does best, which is to produce American energy.”
The Inflation Reduction Act includes several NOIA priorities that will strengthen the outlook for the US offshore energy industry, including:
Offshore oil and gas
● Lease sale 257 has been restored and the high bidders should get their lease.
● A new royalty minimum offshore of 16.66 percent, with a maximum of 18.75 percent.
● Lease sales for 258, 259 and 261 must be held. Lease sale 258 will take place no later than December 31, 2022, lease sale 259 March 31, 2023, and lease sale 261 September 30, 2023.
Carbon Capture and Storage
● If wage/apprenticeship requirements are met and construction begins before January 1, 2033, the federal 45Q tax credit is increased to $85 per ton.
● Direct pay is available for the first five years after the project is placed in service. There is no direct salary for the past seven years except for non-profits and co-ops, which can all receive 12 years of salary.
● Offshore Leasing Sales – offshore wind and offshore oil and gas.
● To issue an offshore wind lease, an oil and gas sale of 60 million acres (approximately a Gulf of Mexico lease sale) would have been conducted in the prior year. This tie-in lasts for 10 years.
For more information visit www.noia.org
