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FILE PHOTO: An oil and gas drilling platform stands offshore in the Gulf of Mexico in Dauphin Island, Alabama, U.S., October 5, 2013. REUTERS/Steve Nesius/File Photo

FILE PHOTO: An oil and gas drilling platform stands offshore in the Gulf of Mexico in Dauphin Island, Alabama, U.S., October 5, 2013. REUTERS/Steve Nesius/File Photo

Biden Administration’s Oil Leasing Plan Draws Criticism from Both Sides

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September 29, 2023

By Nichola Groom and Jarrett Renshaw

Sept 29 (Reuters) – The Biden administration’s plan to slash offshore oil and gas leasing drew fire from both the fossil fuel industry and environmentalists on Friday, with energy companies saying it will raise fuel prices and greens saying it undermines efforts to stop global warming.

The criticism from both sides reflects the difficulty Biden’s White House has had in dealing with U.S. oil extraction policies, as it seeks to balance national energy security with the need to cut greenhouse gas emissions to fight climate change. Biden had promised on the campaign trail to end new federal leasing, but has been blocked by the courts from doing so, and discouraged by rising pump prices that political analysts say could hurt his chances of reelection.

Biden’s Interior Department on Friday unveiled a congressionally mandated five-year plan for offshore oil drilling that included just three sales, all in the Gulf of Mexico — the lowest number in any five-year plan since the government began publishing them in 1980. The record low number was first reported by Reuters on Thursday.

Erik Milito, president of the National Ocean Industries Association, which represents offshore oil and gas developers, said it was an “utter failure for the country” that would increase gas prices, kill Gulf Coast jobs and make the U.S. more reliant on oil imports.

Previous five-year offshore lease programs have ranged between 11 and 41 sales, according to Interior’s U.S. Bureau of Ocean Energy Management. 

Environmentalists also slammed the plan.

“We are too far along in the climate crisis to be committing ourselves to decades of new fossil fuel extraction, especially following the hottest summer in recorded history,” Earthjustice President Abigail Dillen said in a statement.

The Gulf of Mexico accounts for about 15% of U.S. crude oil production, according to government data. It can take between four and 10 years between issuing a lease to producing oil, according to the Bureau of Ocean Energy Management. 


The Interior Department said it had chosen to approve the minimum number of oil lease sales required to expand its offshore wind program, which is now tethered to fossil fuel leasing under federal law.

The Inflation Reduction Act, a landmark climate change law passed last year, made oil and gaslease sales a prerequisite for new offshore wind power auctions. Biden sees offshore wind power as a key element to his plan to decarbonize the U.S. economy by 2050.

But the American Petroleum Institute, a leading U.S. oil industry trade group, said the U.S. was relinquishing its role as a global leader in energy production.

“For decades, we’ve strived for energy security and this administration keeps trying to give it away,” API President Mike Sommers said.

The U.S. Chamber of Commerce and a Gulf Coast senator also slammed the decision.

“It’s a slap in the face to American energy workers and a pat on the back to Putin and OPEC dictators,” Senator Bill Cassidy of Louisiana said in a statement, referring to President Vladimir Putin of huge oil producer Russia and members of the Organization of the Petroleum Exporting Countries. 

Cassidy, whose home state relies heavily on fossil fuel industries, introduced legislation in July that would require Interior to hold two offshore lease sales each in 2024 and 2025.

The Interior Department’s final plan is a dramatic reduction from an earlier proposal by the Trump administration, crafted in 2018 and later thrown out, that envisioned 47 lease sales, including in California and the Atlantic.

Interior said the three sales are expected to take place in 2025, 2027 and 2029.

In a sign of the litigious nature of U.S. drilling policy, Biden’s administration had been scheduled to hold a Congressionally mandated Gulf of Mexico oil and gas lease auction this month. But a lawsuit over federal protection of an endangered whale prompted a U.S. appeals court to give Interior until November to hold the sale.

(Reporting by Nichola Groom; Editing by Jamie Freed and Daniel Wallis)

(c) Copyright Thomson Reuters 2023.


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