The Biden administration is drawing up plans to sell offshore oil drilling rights in the Gulf of Mexico over the next five years, while cutting the program to its smallest level ever.
The oil leasing plan being released by the Interior Department on Friday will contain only a small number of sales, according to people familiar with the deliberations who declined to be named because the project is not yet public. That’s far from the 11 sales the agency proposed last year, and would be the lowest on record.
Still, even a single auction is a blow to environmentalists who argued the new lease is incompatible with the urgent need to decarbonize by mid-century and would block oil development for decades, even as the domestic demand is reduced.
Oil industry advocates had pushed for a robust sales schedule to ensure steady production in the Gulf of Mexico, which provides about 15 percent of U.S. crude output today.
The release of the plan comes as dwindling crude stockpiles push oil futures toward $100 a barrel. However, new leases would take years to lead to exploratory drilling, let alone actual crude oil production.
A major factor in the administration’s decision is a provision in the Inflation Reduction Act that blocks the Interior Department from issuing new offshore wind leases unless it had made a sale of oil lease that put at least 60 million acres at stake. The requirement developed by Sen. Joe Manchin, a West Virginia Democrat, was seen as tying the agency’s hands and forcing at least one oil auction to allow future sales of wind rights in the Gulf of Maine and off the Oregon coast.
Spokesmen for the White House and the Interior Department did not immediately respond to a request for comment. But Deputy Interior Secretary Tommy Beaudreau told a Senate panel Thursday that the five-year program “is definitely informed by the IRA and the connection the IRA makes between offshore oil and gas leasing and the leasing of renewable energy”.
Proponents of offshore wind have told administration officials they need a pipeline of new offshore opportunities to fuel a domestic supply chain that includes making turbine towers, foundations, blades and other gear. But environmentalists stressed that the Interior Department only needs to maintain one or two oil sales to meet offshore wind goals.
“We’re in a climate crisis, and we’re not going to drill our way to lower emissions,” said Valerie Cleland, senior ocean advocate at the Natural Resources Defense Council. “If the administration’s primary goal is to maximize all future offshore wind leases, the administration could do all the offshore wind leasing in the pipeline with one, at most two, lease sales of offshore oil and gas”.
During the campaign, President Joe Biden promised to fight climate change and ban new oil and gas permits on public lands and waters. Activists argue the industry already has a substantial backlog of untapped leases — about 9 million acres, according to government data.
“We know the solution is to move away from fossil fuels,” said Jacqueline Savitz, policy director for the conservation group Oceana. “And we know President Biden knows that. He promised he wouldn’t sell any new leases, which he’s not required to do by law, and if he’s proposing new leases, he’s breaking that promise.”
But the oil industry has argued that the recent approach, with generally semiannual lease sales across a wide swath of the Gulf of Mexico, is the most efficient way to encourage the development needed to meet the world’s energy needs. They emphasize that the oil extracted from the Gulf is one of the least carbon intensive in the world.
The typical pattern of two sales a year is an “appropriate frequency that allows the industry to ramp up and get the acreage it needs to maintain production and increase production,” said Erik Milito, head of the National Ocean Industries Association.
Congress will have 60 days to review the plan and advance legislation to seek changes once the plan is released.
The schedule is a legally required precursor to leasing offshore waters for oil development; this will govern potential sales through the end of 2028. While a different, future administration could try to change course, the project itself takes years to develop, defying quick pivots.
An earlier proposal by the Biden administration left the door open for up to 11 auctions of offshore oil and gas leases: 10 in the Gulf of Mexico and one in Alaska’s Cook Inlet. The previous Obama-era plan, which expired on June 30 of last year, also contained 11 sales.
