Insight
Inflation Reduction Act: all bark and no bite for upstream
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Biden’s signature pre-election achievement, the Inflation Reduction Act, creates dozens of changes for taxes, energy and renewables. For upstream, the Act presents a mixed bag of pro-exploration lease sale offerings but with harsher fiscal terms. In this insight, we look at what will specifically impact upstream: • The alternative minimum tax • The stock buyback tax • Royalty rate increases • Bid and rental rate increases • Mandatory lease offerings.
Table of contents
- Executive Summary
- The Inflation Reduction Act in name only?
- Increased tax burden obscures reality
- Royalty change is expected
- Bonus and rental minimums increase – but not by much
- The future of renewables tied to traditional energy acreage
- Methane fees introduced
- Biden’s bite of buybacks begins
- Limited upstream impact for now
Tables and charts
This report includes the following images and tables:
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Build Back Better and Inflation Reduction Act comparisonInflation Reduction Act revenue and spending breakdownSimplified example of tax basis calculations
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Economic impact of federal royalty increase on government acreage type wellsBid and bonus change summaryBonuses paid for federal onshore acreage since 2019Methane fee price over timeShareholder payouts through Q2 2022
What's included
This report contains:
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