Biden Admin Holds Major Offshore Oil And Gas Lease Sale After Spending Months Trying To Tank It

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The Bureau of Ocean Energy Management (BOEM) sold leasing rights for a major offshore oil and gas drilling area in the Gulf of Mexico on Wednesday, after the Biden administration spent months trying to cancel or significantly alter it.

Lease Sale 261 drew robust interest from bidding firms, and it generated more than $380 million for the government, according to BOEM, a sub-agency of the Department of the Interior (DOI). The Biden administration moved to cancel the Congressionally-mandated sale in May 2022, and subsequently pushed for ecological protections for the Rice’s whale that would have reduced the acreage on the table and made the available area less appealing to prospective bidders.

In July, weeks before the sale was initially scheduled to occur, the administration settled a lawsuit filed by activist groups that alleged the government’s environmental reviews were inadequate, agreeing to impose extra protections for the Rice’s whale and removing millions of acres from the available lease area. The U.S. Fifth Circuit Court of Appeals struck down that settlement in November, finding those last-minute changes to be illegal and ordering BOEM to hold the sale as originally designed. (RELATED: Biden Admits He ‘Wanted To Stop All Drilling,’ But Was Forced To Follow The Law)

“Despite policy headwinds, today’s sale generated the highest bid amount in nearly a decade, demonstrating that our industry is working to meet growing demand and investing in the nation’s long-term energy security,” Holly Hopkins, the American Petroleum Institute’s vice president of Upstream Policy, said of the sale. “Although today’s congressionally mandated lease sale is a positive step after multiple delays, the lack of any offshore sales in the year ahead is a prime example of the administration’s failure to implement a long-term energy strategy. We urge the administration to reconsider its shortsighted approach and plan today for tomorrow’s energy demand.”

The lease sale was the last one scheduled under 2017’s five-year offshore leasing schedule, crafted and finalized by the Trump administration. The Biden administration finalized the most restrictive five-year schedule in American history on Friday, allowing the bare minimum acreage of sales mandated by the Inflation Reduction Act.

The new schedule includes one lease each in 2025, 2027 and 2029, and industry groups have sharply criticized it for potentially jeopardizing American energy security and empowering foreign energy producers, some of whom are adversaries of the U.S.

Offshore oil production in federally-controlled waters in the gulf of Mexico accounted for about 15% of total U.S. crude oil output in 2021, according to the U.S. Energy Information Administration. As the Gulf of Mexico’s oil is thought to be less carbon-intensive to produce than oil from most other regions, reduced production in the Gulf could be replaced by more carbon-intensive output from elsewhere in the world, according to the American Petroleum Institute.

“Without Congressional intervention, this is the final lease sale until at least 2025,” Erik Milito, the president of the National Ocean Industries Association, said of the sale. “In future years without scheduled lease sales, we remain concerned about the potential shift of investment away from the U.S. to energy projects around the world… without opportunities for investment in new leasing we are concerned that American jobs, American energy production, our national security, and environmental progress will be at risk.”

The White House and DOI did not respond immediately to requests for comment.

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