Fossil Fuel Production Rises Under the Inflation Reduction Act, Exacerbating Environmental Injustice

The Inflation Reduction Act (IRA) fails to reduce fossil fuel production or alleviate impact on environmental justice communities, according to a new briefing by Oil Change International titled “Biden’s Fossil Fuel Fail: How U.S. Oil and Gas Supply Rises under the Inflation Reduction Act, Exacerbating Environmental Injustice.”

The report documents an analysis of post-Inflation Reduction Act energy modeling that projects U.S. oil and gas production rising while exports soar.

This not only makes a mockery of the IRA’s “climate bill” label and President Joe Biden’s claims of “climate leadership,” but signals that without additional action to constrain oil and gas production, the suffering of oil and gas frontline communities will only grow. Black, Brown, Indigenous, and poor communities, especially in Appalachia, the Gulf Coast, and the Permian Basin, are disproportionately impacted by fossil fuel pollution, climate disasters, and health impacts.

Report Link: https://priceofoil.org/fossil-fuel-fail

Key Findings

1. The report presents previously unpublished data from the Rhodium Group’s Climate Deck model, which projects U.S. oil and gas production will continue to grow despite the IRA’s support for clean energy. While the model projects a modest decline in domestic demand for oil and gas, oil production rises 13% while gas production rises 7%.
2. The gap between production and demand is filled by surging exports. Gas exports are projected to double by 2035, while oil and petroleum product exports rise 23%. As wind and solar replace gas in the power sector, the decline in domestic gas demand is tempered by an increase in gas consumption within the oil and gas industry itself. Gas consumption by energy-hungry LNG export plants grows by 140%.
3. Rhodium’s model shows the Inflation Reduction Act may fall significantly short of achieving the United States’ stated Paris Agreement goal of reducing emissions by 50-52% below 2005 levels by 2030. The central scenario projects a 16-18 percentage point gap in meeting this target, emphasizing the need for additional policies to ensure faster emissions decline this decade and beyond.
4. Science shows that the only way to maintain the 1.5ºC climate goal is to phase out fossil fuels. Continued growth in U.S. oil and gas production and exports will not only threaten this goal, but will also exacerbate the ongoing suffering of communities living on the frontlines of oil and gas production, processing, and exports.
5. These impacts are disproportionately borne by Black, Brown, Indigenous, and poor communities — specifically in Appalachia, the Gulf of Mexico, and the Permian Basin of Texas and New Mexico.

Ahead of COP28, these findings spotlight the urgent need for the Biden administration to go beyond the IRA and take bold measures to align with international climate objectives and address environmental injustice issues head-on. It is imperative for the United States to stop fossil fuel exports, end leasing on federal lands, halt approval of new fossil fuel infrastructure projects, and phase out fossil fuels.

The United States is the world’s largest producer, expander, of oil and gas and the largest exporter of fossil gas. Since taking office, President Biden has approved at least a dozen fossil fuel projects at home and abroad. This year alone, Biden has approved the Willow oil project in Alaska and multiple LNG export facilities, greenlit almost $2 billion in public finance for fossil fuel infrastructure abroad, and thrown its support behind the Mountain Valley fracked gas pipeline. While the IRA was touted as the “largest investment in climate and energy in American history,” it could turn out to be a failure if Biden doesn’t also take bold action on fossil fuels. As the world gathers for COP28, Biden still has a chance to be the climate leader he claims he is by making a commitment to phasing out fossil fuels.

Collin Rees, United States Campaign Manager at Oil Change International, said:
“The Biden administration touts the Inflation Reduction Act as a centerpiece of its achievements on climate. In reality, the bill leaves a massive escape hatch for the fossil fuel industry to continue business as usual. To align with global climate goals, President Biden and his administration must phase out the export of oil and gas, end fossil fuel leasing on federal lands, and stop all approvals for new fossil fuel infrastructure projects.

“At COP28 the spotlight will be on our collective effort to end the fossil fuel era. Will the United States deliver, or will Biden’s climate legacy be one of disastrous oil and gas expansion and failure to adequately tackle the climate crisis?”

Roishetta Sibley Ozane, Founder of The Vessel Project of Louisiana, said:
“It’s clear that President Biden’s promises made to frontline communities are nothing but a smokescreen. The Inflation Reduction Act leaves a massive escape hatch for the fossil fuel industry to continue its destructive practices, and my family battles the real consequences from fossil fuel production every day.

“We supported Biden for change, not to deal with deadly decisions made without us at the table. The fight against climate disaster is collective, and the United States cannot preach about caring for communities while exporting pollution globally. President Biden, our fight is your fight.”

Read the Full Report: https://priceofoil.org/fossil-fuel-fail