Interior details steep cuts in offshore lease sales for next 5-year plan

The Biden administration has released a proposed final version of its next 5-year leasing program for offshore oil and gas with a maximum of three Gulf of Mexico lease sales and no sale for offshore Alaska.

The program for 2024-2029 will be a sharp drop from the last 5-year program, which included 11 lease sales—two per year over 5 years in the Gulf of Mexico and one sale in Alaska’s Cook Inlet.

The Interior Department, in announcing the proposed final program Sept. 29, said it would hold one lease sale in each of the years 2025, 2027, and 2029.

It is the minimum number of sales the administration could offer if it also wants to promote offshore wind energy, because the Inflation Reduction Act of 2022 tied offshore wind leases to offshore oil and gas sales. That law forbids the government from issuing an offshore wind lease if an oil and gas lease sale covering at least 60 million acres was not held in the preceding 1-year period (OGJ Online, July 28, 2022).

“The three potential sales in the proposed final program will enable the department’s offshore wind energy program to continue to issue offshore wind leases, ensuring continued progress toward the administration’s goal of 30 gigawatts of offshore wind by 2030,” Interior said.

Publication of the proposed final 5-year program in the Federal Register will initiate a 60-day waiting period before Interior Secretary Deb Haaland can formally approve the program and finalize a record of decision. Interior’s Bureau of Ocean Energy Management also will publish a call for information and nominations to gauge industry interest in tracts to offer for leasing.

‘A failure of leadership’

The policy plan did not sit well with many people in Congress and industry and among environmental groups, which criticized the plan from both sides.

“This administration has once again decided to put their radical political agenda over American energy security, and the American people will pay the price,” Sen. Joe Manchin (D-W.Va.) said in a statement responding to Interior’s announcement.

“It makes no sense at all to actively be limiting our energy production while our adversaries are weaponizing energy around the world,” Manchin said. “This is a failure of leadership, and I will continue to do everything in my power to hold this administration accountable.”

A similar reaction was expressed by Sen. John Barrasso (R-Wyo.). Manchin and Barrasso lead the Senate Energy and Natural Resources Committee as chairman and ranking member, respectively.

Erik Milito, president of the National Ocean Industries Association, released a statement criticizing the plan for the prospect of “destroying good-paying jobs that form the fabric of Gulf Coast communities” and doing so at a time when global oil and gas demand is at record levels and continuing to rise.

Faster energy transition wanted

By contrast, some congressional opponents of oil and gas development expressed approval of the low level of lease sales for the next 5 years and said they hoped to reduce the number to zero through legislation they support.

Reps. Raul Grijalva (D-Ariz.), top Democrat on the House Natural Resources Committee, issued a statement expressing frustration that the Inflation Reduction Act links offshore wind leasing to offshore oil and gas sales, and he praised fellow Democrats for two bills proposed in late July to repeal that connection between wind and fossil fuel leasing.

Both the Nonrestrictive Offshore Wind Act (HR 4936) and the Comprehensive Legislation for Expanding and Advancing Nonrestrictive Energy Act (HR 4916) would break the link between wind and fossil fuel for offshore leasing, and HR 4916 would also repeal a parallel linkage for federal onshore leasing. The bills each have more than two dozen cosponsors but are unlikely to advance as long as Republicans are the House majority.

The Sierra Club issued a statement Sept. 29 saying even one offshore oil and gas sale is too many. “Congress must fix these statutory mistakes and end new offshore drilling once and for all,” said Ben Jealous, the group’s executive director.

Similar frustrations with ongoing lease sales were expressed by the Natural Resources Defense Council and the Center for Biological Diversity.

Interior also is releasing a final programmatic environmental impact statement (EIS) for publication along with the final program, and another programmatic EIS will be developed to analyze “the potential impacts of a representative lease sale,” the department said. More lease sale environmental analyses will follow, and individual exploration plans and development plans for a specific tract also are subject to environmental analyses.