American Oil and Gas Reporter - October 2024 - 51

Election2024: Industry Analysis
Investment and Jobs Act and the IRA.
In a high price environment, oil and gas tax reforms
may be possible under mixed government, too. Even
the George W. Bush administration presided over de
facto windfall taxes. The 2005 Energy Policy Act
initially gave all companies two-year geological and
geophysical expensing under Section 167(h). But
lawmakers rolled it back for five operators that met a
new " major integrated oil companies " definition-
first to five years in 2006 and then to seven in 2007.
And, in 2008, Congress froze the Section 199 deduction
for oil companies at 6% instead of the originally
scheduled increase to 9% in 2009.
Q: During the Biden administration, the U.S. Department of Interior's
Bureau of Land Management has shrunk federal onshore mineral
leasing offerings considerably. New offshore leasing from DOI's Bureau
of Ocean Energy Management also has slowed to a crawl. Is it likely
that a (Harris/Trump) administration will continue, accelerate or
reverse these trends?
H
ClearView: At minimum, we would expect
Harris to continue the Biden administration's
trajectory toward less-frequent leases of smaller
and/or more fragmented federal parcels on less-generous
fiscal terms. The IRA raised royalty rates and
rents and imposed new fees, and conservation leasing
under the Biden administration's landscape rule may
serve as a vehicle for limiting access to some mineral-bearing
lands.
It is true that Section 50265 of the IRA tied
offshore wind leasing to offshore oil and gas sales
and onshore federal rights of way for wind and solar
to onshore oil and gas auctions. However, the Interior
Secretary retains considerable discretion to delay
and/or cancel sales. Biden's offshore oil and gas
leasing plan contained a historic low of three sales
over five years, but if interest in offshore wind
continues to flag, BOEM might cancel one or more
of them.
AEI: DOI's 2024-2029 offshore oil and gas
leasing program-released nearly two years
late-drastically limits opportunities, with only
three lease sales in the Gulf of Mexico and none in
Alaska. For the first time since 1958, there will be no
offshore lease sales in 2024. This endangers domestic
jobs, reduces resource supply and drives operators to
seek opportunities abroad. Without more lease sales,
future investment and production will stagnate.
The Gulf of Mexico, which produces nearly 15%
of U.S. oil and supports 370,000 jobs, will be hit
hard, as will state revenues that rely on offshore
production. The Biden administration's continued
restrictions, including canceling Arctic leases and
locking up land in Alaska, already damage job
growth and weaken energy security. Under a potential
Harris administration, we can expect the same detrimental
policies, further reducing domestic energy
production, increasing foreign dependence and jeopardizing
national security.
As energy revenues shrink, states will be forced
to reassess budgets and critical projects. The current
approach leaves the country at risk of long-term
economic harm and increased foreign energy dependence.
Incredibly, Biden and Harris attempt to
claim they have increased oil production. As American
Enterprise Institute's Ben Zycher has explained, " the
number of new drilling permits issued in a given
year is driven heavily by leases approved in prior
years. The increase in fossil energy production on
federal lands observed during the Biden administration
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OCTOBER 2024 51
American Oil and Gas Reporter - October 2024

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