The U.S. Department of the Interior chose the Friday of the July 4 weekend to release its proposed program for the National Outer Continental Shelf Oil and Gas Leasing Program (National OCS Program) for years 2023-2028.
“This is the second step in a three-step planning process to determine whether or how many offshore oil and gas lease sales to hold over the next five years. The proposed plan puts forward several options from no lease sales up to 11 lease sales over the next five years,” said Secretary of the Interior Deb Haaland. “Like the current program finalized in 2016, it removes from consideration the federal waters off the Atlantic and Pacific coasts while inviting public comment on 10 potential sales in the Gulf of Mexico and one in the Cook Inlet off south-central Alaska. A proposed program is not a decision to issue specific leases or to authorize any drilling or development.
MAY BE TEN GULF SALES, MAY BE NONE
The proposed program includes no more than ten potential offshore oil and gas lease sales in the Gulf of Mexico (GoM) and one potential lease sale in the northern portion of the Cook Inlet Planning Area offshore Alaska, which is the same as in the five-year program finalized in 2016,” says the Department of the Interior. These potential lease sales, including in the GoM, could be further refined and targeted, based on public input and analysis, prior to program approval. The final program also may include fewer potential lease sales, including no lease sales.
Following this opportunity for public comment, BOEM will prepare a proposed final program and final proposed environmental impact statement, which will include analysis of the size, timing, location, and number of potential lease sales in the proposed program. Those may be further narrowed or areas could be excluded. There is then a minimum 60-day period before the secretary can approve the program and finalize the record of decision.
National Ocean Industries Association President Erik Milito issued the following statement after the Department of the Interior issued the proposed program for the 2023-2028 five year program for offshore oil and gas leasing:
“The Biden administration must act swiftly to finalize and implement the offshore oil and gas leasing program. We are in the middle of a substantial, unnecessary, and avoidable gap in offshore leasing that is having serious impacts for both near-term and long-term investment in U.S. energy production. The gap in offshore lease sales – and all of negative impacts associated with reduced domestic production – will continue for the foreseeable future until a final leasing program is in place and lease sales resume. The proposed leasing plan is just one step in the process, and it is imperative that the administration act without any further delays and finalize the program as proposed, without reduced acreage. At a time of historic tightness in the global oil marketplace and associated high prices for Americans, we need energy policies that promote continued and growing supplies from U.S. producing regions.
“Every administration – whether they were Republican or Democrat – has recognized the strategic advantages of the U.S. offshore and fulfilled their statutory obligation to maintain an offshore leasing program and continuously hold lease sales. This is the first year that the U.S. will not hold an offshore lease sale since 1965. That year, Bonanza and Gomer Pyle were the most popular shows on television and the Sound of Music topped the box office.
“Including two lease sales per year in the Gulf of Mexico – as proposed – supports the long-term competitiveness of the U.S. offshore. Most leases do not contain commercially viable amounts of oil or gas. Efforts to limit acreage or hold fewer lease sales would needlessly eliminates opportunities for U.S. energy production in a basin that is recognized as providing among the lowest carbon barrels. Wood Mackenzie predicts that restrictions on U.S. Gulf of Mexico production could ‘have a counterproductive impact on global emissions.’
“The final offshore leasing program must include multiple, region-wide lease sales per year in the Gulf of Mexico to provide the flexibility necessary for companies to adapt to rapidly changing market conditions and to pursue the most promising geologic prospects of hydrocarbons. The U.S. offshore Gulf of Mexico region is one of the top oil producing basins in the world. It is world class, high-tech, and is characterized by low carbon emissions. We can work together to advance energy policy that is grounded in reality by securing affordable, reliable, and environmentally responsible energy here at home, while also widening the pathway for deployment of low and zero carbon technologies and energy sources. We need to look no further than the U.S. Gulf of Mexico to achieve our energy policy goals, and this requires the prompt finalization and resumption of a robust domestic offshore oil and gas leasing program.”
NOIA notes that the proposed program is the second of three lengthy phases of the development of a final leasing program. There will be a 90 day comment period on the proposed program, up to a 90 day comment period on the programmatic environmental impact statement, and a 60 day Congressional review period for the proposed final program, along with the time it takes for the requisite work to finalize the program and environmental review.