US Plans Sharp Reduction in Offshore Oil and Gas Lease Sales

Credit: scandamerican/AdobeStock
Credit: scandamerican/AdobeStock

The Biden administration on Friday unveiled a plan to phase down oil and gas auctions in federal waters with the release of a long-awaited leasing schedule that includes a maximum of three sales in the Gulf of Mexico through 2029.

The Interior Department's plan includes by far the lowest number of sales since the agency began producing Congressionally-mandated five-year oil and gas leasing schedules in 1980

Previous programs have ranged between 11 and 41 sales, according to Interior's U.S. Bureau of Ocean Energy Management.

The record-low number of three lease sales was first reported by Reuters on Thursday. 

The reduction brings the federal program in line with President Joe Biden's goal to decarbonize the U.S. economy by 2050 and address climate change, Interior said.

The plan disappointed supporters and opponents of offshore drilling and fell short of Biden's campaign promise to end new federal leasing entirely.

Politicians from producing states and the oil industry have cast the national leasing program as a critical tool to shore up domestic energy supplies and keep pump prices low, while environmentalists argue that leasing must end to rein in fossil fuel development to combat climate change.

The Gulf of Mexico accounts for about 15% of U.S. crude oil production, according to government data. It can take between four and 10 years between issuing a lease to producing oil, according to the Bureau of Ocean Energy Management. 

The International Energy Agency has warned that new fossil fuel investment should stop to avert the worst impacts of global warming.

LINKS TO OFFSHORE WIND POWER

Recent court decisions required the continuation of the program and last year's Inflation Reduction Act made oil and gas lease sales a prerequisite for new offshore wind power auctions, making it impossible for Biden to keep his campaign promise.

"The Biden-Harris administration is committed to building a clean energy future that ensures America's energy independence," Interior Secretary Deb Haaland said in a statement.

The plan "sets a course for the Department to support the growing offshore wind industry and protect against the potential for environmental damage and adverse impacts to coastal communities," she added.

Interior said the three sales are the minimum number that will enable the agency to expand its offshore wind program through 2030. Offshore wind is a key pillar of Biden's climate policy, and his administration has an ambitious goal to deploy 30 gigawatts of the clean energy technology by the end of the decade even though just two pilot projects exist currently.

Still, environmental groups criticized the plan for continuing the oil and gas leasing program.

"This decision is beyond disappointing," Beth Lowell, vice president for the U.S. division of Oceana, an environmental group, said in a statement. "President Biden is unfortunately showing the world that it's okay to continue to prioritize polluters over real climate solutions."          

The sales are expected to take place in 2025, 2027 and 2029, Interior said in a statement. The agency declined to include a sale in waters off the coast of Alaska after considering one there in a 2022 draft proposal that contemplated between zero and 11 total sales.

The final plan is a dramatic reduction from a proposal the Trump administration had crafted in 2018 that envisioned 47 lease sales, including in California and the Atlantic.

"This restrictive offshore leasing program is the latest tactic in a coordinated strategy to reduce energy production," American Petroleum Institute President Mike Sommers said in a statement. "For decades we've strived for energy security and this administration keeps trying to give it away."

The plan is subject to a 60-day waiting period before it can be approved Haaland.

(Reuters - Reporting by Nichola Groom; Editing by Jamie Freed)

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