US Interior Department plans three offshore oil, gas lease sales over next five years

The US Interior Department Sept. 29 issued its long-awaited five-year offshore oil and gas leasing plan, which contemplates only three auctions, to the chagrin of the oil industry.

The plan comes over a year after the country's last offshore leasing program expired and must undergo a 60-day review period before Interior Secretary Deb Haaland may formally approve it.

The department on July 1, 2022, proposed holding up to 10 auctions for Gulf of Mexico acreage and one for Alaska's Cook Inlet, with the possibility of zero lease sales over that five-year period on the table. That proposal garnered more than 760,000 comments.

The new 2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program calls for a total of three auctions to be held in 2025, 2027, and 2029, all for acres in the Gulf of Mexico.

Plan infuriates oil lobby

The oil industry and its advocates were quick to blast the new offshore leasing program, as well as the Interior's failure to commence environmental analyses for the individual lease sales that have historically been conducted in tandem with the development of the leasing program.

National Ocean Industries Association President Erik Milito said these actions erode producers' and investors' long-term confidence and certainty in oil and gas development in the Gulf of Mexico region.

The result, he said, will be "relinquishing geopolitical advantages of energy production to countries like Russia, Iran, and China" and "setting the table for potential future delays, including from litigation by activist groups, and an offshore energy leasing cliff."

The American Petroleum Institute said the five-year plan would add to the pain US consumers are feeling at the pump. US gasoline prices averaged $3.84/gal the week ended Sept. 25, climbing 24 cents over the past two months, according to the Energy Information Administration.

"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," API President and CEO Mike Sommers said.

Lawmakers in producing states also criticized the Biden administration's actions.

"To be clear—three lease sales is more than the zero we would have gotten had it not been for the [Inflation Reduction Act]," Senate Energy and Natural Resources Committee Chairman Joe Manchin, Democrat-West Virginia, said. "But it makes no sense at all to actively be limiting our energy production while our adversaries are weaponizing energy around the world."

The IRA requires Interior to offer at least 60 million acres in offshore oil and gas lease sales a year prior to issuing any offshore wind leases.

Senator John Barrasso of Wyoming, the top Republican on the energy panel, echoed sentiments that the leasing schedule favors foreign oil producers.

"America is one of the cleanest, most responsible, and most efficient producers of oil and natural gas in the world," Barrasso said. "It's a disgrace that the Biden administration refuses to acknowledge that simple truth."

Fewest sales in history

But the Biden administration boasted about the proposed final program offering the fewest oil and gas lease sales in history, asserting that it aligns with the goal of net-zero emissions by 2050. The three contemplated sales are the minimum needed to allow Interior to continue expanding its offshore wind leasing program through 2030.

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

Interior said that the Trump administration's proposal to hold 47 lease sales spanning all US coastal areas over a five-year period "presented risks to local coastal economies—particularly for communities along the East and West Coast, where offshore oil and gas development has not been authorized in decades, if ever."

The new plan limits leasing to the Gulf, where production and infrastructure already exist.

Enviros' reactions mixed

"This move signals a shift away from the toxic industry and toward a cleaner future," Climate Power senior advisor for oil and gas Alex Witt said.

Still, some—even in Biden's camp—argued that Interior should have gone with the no-leases option.

"More fossil fuel development off our shores means more climate change, more coastal communities in harm's way, and more time wasted on a dirty energy economy that should be left in the past," said Raul Grijalva, an Arizona Democrat who is also the ranking member of the House of Representatives Natural Resources Committee.

He commended Interior for limiting the number of future auctions and reiterated his support for legislation that would repeal the provisions of the IRA that tie clean energy development to continued oil and gas leasing.

But other environmentalists were less understanding.

"I feel disgusted and incredibly let down by Biden's offshore drilling plan," said Brady Bradshaw, senior oceans campaigner at the Center for Biological Diversity. "It piles more harm on already-struggling ecosystems, endangered species, and the global climate. We need Biden to commit to a fossil fuel phaseout, but actions like this condemn us to oil spills, climate disasters, and decades of toxic harm to communities and wildlife."