U.S. President proposes more money for offshore wind activities and no tax subsidies for oil & gas in 2024 budget

On 9 March, the Biden-Harris administration released the President’s Budget for Fiscal Year (FY) 2024, with funds for federal agencies’ activities in offshore wind proposed to be increased. The budget also supports the agencies’ work on the next National OCS Oil and Gas Leasing Program, however, in terms of corporate support, it eliminates tax subsidies for oil and gas.

The FY 2024 budget requests $64.5 million for the renewable energy programme of the U.S. Department of the Interior’s (DOI) Bureau of Ocean Energy Management (BOEM) – $21.6 million more than for FY 2023. This includes a $12 million increase to support permitting associated with the current offshore wind leasing path forward.

“In FY 2024, BOEM will maintain an all-of-government approach by collaborating with multiple government agencies and states, and consulting with Tribal Nations to expand responsible offshore wind development. BOEM aims to run efficient, transparent, and inclusive processes to identify future lease sale areas; avoid, reduce, and mitigate conflicts; and advance projects. BOEM will also work with the Governors of U.S. Territories to explore the potential of offshore wind lease sales in federal waters off their coasts, as authorized by the Inflation Reduction Act (IRA)”, the agency states.

The budget also proposes $92.8 million for BOEM’s Environmental Programs, an increase of $10.4 million, which includes funding for environmental review associated with renewable energy projects. 

Furthermore, the Biden-Harris administration earmarks $60 million to expand offshore wind permitting activities at the National Oceanic and Atmospheric Administration (NOAA), the agency under the Department of Commerce which last year joined BOEM in the quest to reach 30 GW of offshore wind capacity in the U.S. by 2030.

According to the FY 2024 budget, this will allow NOAA to use the best available science to help meet the 2030 goal while protecting biodiversity and promoting sustainable ocean co-use. 

The budget also includes $75 million for the Department of Energy to advance domestic supply chain capacity for key climate technologies.

The proposed funds complement funding in the Inflation Reduction Act by providing support for Loan Program Office administrative expenses to originate and oversee the growth in the financing of clean energy, projects supporting the repurposing of legacy energy infrastructure, and advanced technology vehicle manufacturing projects envisioned in the IRA. 

For BOEM, the FY 2024 budget also requests $72.3 million for its Conventional Energy Program under which the federal agency is developing the next National OCS Oil and Gas Leasing Program.

“In the coming fiscal year, the Department will finalize and implement the next National OCS Oil and Gas Leasing Program. President Biden’s Bipartisan Infrastructure Law gave the Department new authority to authorize leases, easements, and rights-of-way on the OCS that support carbon sequestration activities. The FY 2024 budget will ensure the effective launch of that program and allow for reviewing new proposals for carbon storage projects, as well as related environmental analyses”, BOEM states.

However, while the FY 2024 budget backs the U.S. activities in securing new oil and gas production assets, it is moving away from supporting the oil and gas companies through tax subsidies.

“The President is committed to ending tens of billions of dollars of federal tax subsidies for oil and gas companies. Even as they benefit from billions of dollars in special tax breaks, oil companies have failed to invest in production”, the White House states in one of the fact sheets issued to support the release of the proposed budget with more information.

According to the current U.S. administration, Big Oil last year realised record profits and cut their investment as a share of operating cash flows to the lowest levels in a decade while undertaking record stock buybacks that benefited executives and wealthy shareholders.

“The Budget saves $31 billion by eliminating special tax treatment for oil and gas company investments, as well as other fossil fuel tax preferences”, the White House says.