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Biden Administration’s Offshore Drilling Plan Could Bring Up to 11 Lease Sales

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July 1, 2022

By Ari Natter (Bloomberg) —

The Biden administration opened the door to selling new oil and gas drilling leases in the Gulf of Mexico and Alaska in a move likely to anger climate activists pushing to see a domestic ramp down for fossil fuels.

The Interior Department is proposing as many as 11 lease sales over the next five years, according to draft plan made public Friday. They include 10 in the Gulf of Mexico and one in the Cook Inlet off the Alaskan coast. The plan also includes an option to conduct no lease sales. Similar to the previous drilling plan, the proposal bars new leases off both the Atlantic and Pacific coasts. 

“From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy,” Interior Secretary Deb Haaland said in a statement. “Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing.”

The proposal is only an initial step in the process, with several months of public comment and other reviews before it could be finalized. Under federal law, auctions of offshore oil and gas drilling rights can only be held under the formal five-year plans. The current five-year plan expired Thursday.

President Joe Biden vowed on the campaign trail to block new oil and gas permitting on public lands and waters, and once in the White House, he halted lease sales so Interior Department officials could scrutinize their environmental impacts. A Louisiana-based judge last year tossed out that leasing pause, and the Interior Department resumed selling onshore oil and gas leases this week. 

A lot has changed since the campaign trail. The administration has implored oil companies to produce more amid soaring gasoline prices ahead of the midterm elections.

Senator Joe Manchin, a West Virginia Democrat whose vote will be needed to pass Biden’s economic package, has also pressured the White House to allow more lease sales, complaining that the Biden administration is “blocking increased energy production at home” while encouraging more oil flows from Venezuela and OPEC producers.

“I am disappointed to see that ‘zero’ lease sales is even an option on the table,” Manchin said in a statement after the proposal was released. “There is already more than enough flexibility in the program to adjust sales later, which the administration has previously taken advantage of to cancel three sales earlier this year.”

Environmental groups and a cadre of other Democratic lawmakers have implored the administration not to include any new leases in its plan, arguing doing so would run counter to the administration’s climate and environmental goals. The proposal landed the day after the US Supreme Court dealt a major blow to Biden’s climate-change agenda, restricting the Environmental Protection Agency’s ability to curb power-plant emissions.

“Ruling out new leases this year is an important step toward protecting communities and climate, and we urge the administration to finalize a plan that commits to no new offshore drilling leases, period,” said Athan Manuel, a director at the Sierra Club.

Meanwhile, business groups, such as the US Chamber of Commerce, slammed the plan for sending “mixed signals.”

“Reliable, affordable energy requires long-term planning, a government-wide approach and clear signals to the market,” Marty Durbin, president of the Chamber’s Global Energy Institute, said in a statement. “This proposal provides none of that.”

–With assistance from Jennifer A. Dlouhy.

© 2022 Bloomberg L.P.

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