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:
- Build Back Better and Inflation Reduction Act comparison
- Inflation Reduction Act revenue and spending breakdown
- Simplified example of tax basis calculations
- Economic impact of federal royalty increase on government acreage type wells
- Bid and bonus change summary
- Bonuses paid for federal onshore acreage since 2019
- Methane fee price over time
- Shareholder payouts through Q2 2022
What's included
This report contains:
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