Biden administration to hold smallest auction for offshore oil drilling rights in Gulf of Mexico
(Bloomberg) – The Biden administration released plans on Friday to hold three auctions of offshore drilling rights over the next five years — part of what it cast as an effort to phase down oil leasing.
The leasing program charts sales of Gulf of Mexico oil and gas leases in 2025, 2027 and 2029 — the fewest-ever since the government started planning the auctions in five-year blocks. The level was carefully calibrated to sustain offshore wind development, since last year’s climate law ties the fate of those renewable projects to the sale of oil leases.
“These three proposed lease sales are the minimum number that will enable the Interior Department to continue to expand its offshore wind leasing program through 2030,” the agency said in a release.
The schedule of auctions — focused solely on the Gulf — represents the latest attempt by President Joe Biden to balance competing climate and energy priorities while navigating within the bounds of federal laws meant to promote fossil fuels.
On the campaign trail, Biden promised to confront climate change and ban new oil and gas permitting on public lands and waters.
But a 1953 law requires the government prepare and maintain an offshore oil and gas leasing program determined to “best meet national energy needs for the five-year period following” its development, reflecting affected states, the environmental sensitivity of the region and potential company interest.
Last year’s climate law goes further by blocking the Interior Department from issuing new offshore wind leases unless it held an oil lease sale with at least 60 million acres up for grabs in the prior year.
Oil industry leaders and their advocates on Capitol Hill have said more auctions are necessary to sustain production in the Gulf of Mexico that now provides about 15% of U.S. crude output. Because it can take years for companies to find and obtain crude from newly sold leases — and some never produce a drop — leasing now helps sustain production for decades to come.
Rising oil prices — marching toward $100 a barrel — only underscore the need for sustained development, industry advocates said.
“This restrictive offshore leasing program is the latest tactic in a coordinated strategy to reduce energy production, ultimately weakening America’s energy dominance, limiting consumers access to affordable reliable energy and compromising our ability to lead on the global stage,” said Mike Sommers, President of the American Petroleum Institute. “For decades, we’ve strived for energy security, and this administration keeps trying to give it away.”
The five-year program is a legally required precursor to leasing offshore waters for oil development. The plan is now subject to a 60-day waiting period before it can be formally approved, giving time for Congress to intervene and advance legislation seeking changes.
Interior Secretary Deb Haaland said the schedule reflects a Biden administration commitment “to building a clean energy future that ensures America’s energy independence.”
“The proposed program, which represents the smallest number of oil and gas lease sales in history, 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,” Haaland said in a news release.
The tempo of biennial oil lease sales represents a big shift from the recent approach, with parcels in the Gulf typically sold twice each year. The government is still on track to auction oil leases across some 73 million acres of the Gulf by Nov. 8, in a sale first scheduled by President Barack Obama and subsequently mandated by the Inflation Reduction Act.
Biden’s Interior Department last year proposed as many as 11 sales — with 10 in the Gulf and one in Alaska’s Cook Inlet — matching the number under the previous, Obama program. It’s a marked reduction from the 47 potential sales under President Donald Trump outlined under an earlier draft of the program — with territory earmarked along almost every coast.