Inflation Reduction Act: all bark and no bite for upstream

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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 8 images and tables including:

  • 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:

  • Document

    Inflation Reduction Act: all bark and no bite for upstream

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