Biden administration postpones offshore lease sale, prompts condemnation from oil trade group

(WO) – The American Petroleum Institute (API) released the following statement from Vice President of Upstream Policy Holly Hopkins on the Department of the Interior Bureau of Ocean Energy Management (BOEM) decision to delay Lease Sale 261:

“From issuing the weakest 5-year program for offshore leasing in U.S. history to repeatedly delaying congressionally-mandated lease sales, the Department of the Interior continues to demonstrate its willingness to ignore the clear and growing need to expand American energy leadership and reduce reliance on foreign energy sources. Beyond the sale that was postponed today, there will be no offshore sales until 2025 – the longest gap in offshore sales since 1966. The U.S. oil and natural gas industry stands ready to support the nation's energy security through reliable, lower carbon-intensive energy produced here in the U.S. Gulf of Mexico, but the Interior Department’s inconsistent policies undermine the certainty needed to invest in future production.”

In September, the Biden administration issued a final 5-year program for federal offshore leasing that included 3 offshore lease sales over the next 5 years, the lowest number of lease sales in the history of the program. Lease Sale 261 is the final offshore lease sale mandated by the Inflation Reduction Act and is the only offshore sale scheduled to take place until 2025.

According to the U.S. EIA, Gulf of Mexico federal offshore oil production accounts for 15% of total U.S. crude oil production and federal offshore natural gas production in the Gulf accounts for 5% of total U.S. dry production. The U.S. Gulf of Mexico produces some of the lowest carbon intensity barrels in the world. Constrained production in this basin could be replaced by higher carbon intensity barrels from elsewhere in the world.

In addition to today's news, NOAA recently denied the petition for rulemaking to impose speed limits on all vessels operating in the Rice's whale core habitat area in the Gulf of Mexico. NOAA concluded that there were a series of actions needed, including conservation tasks, drafting a species recovery plan, and conducting a quantitative vessel risk assessment before NOAA would even consider a rulemaking on the vessel restrictions. Interior conducted none of these actions in their attempt to target oil and gas vessels through placing vessel restrictions as lease stipulations in Lease Sale 261, as well as issuing a Notice to Lessees recommending various restrictions on oil and gas vessels.