BOEM proposes fewest oil and gas lease sales in history

The Inflation Reduction Act (IRA) does not allow the Bureau of Ocean Energy Management (BOEM) to issue a lease for offshore wind development unless the agency has offered at least 60 million acres for oil and gas leasing on the OCS in the previous year. With that gun to its head, BOEM has finally released its proposed 2024–2029 National Outer Continental Shelf Oil and Gas Leasing Program.

Industry does not like it, and it’s not hard to see why.

Proclaiming that its proposed program includes the fewest oil and gas lease sales in history, the U.S. Department of the Interior says that, while phasing down oil and gas leasing in the Gulf of Mexico, the plan will enable offshore wind program to continue to rapidly grow.

The proposed final program includes a maximum of three potential oil and gas lease sales in the Gulf of Mexico Program Area scheduled in 2025, 2027 and 2029. These three proposed lease sales are the minimum number that will enable the Interior Department to continue to expand its offshore wind leasing program through 2030.

“The Biden-Harris administration is committed to building a clean energy future that ensures America’s energy independence,” said Secretary of the Interior Deb Haaland. “The Proposed Final Program, which represents the smallest number of oil and gas lease sales in history, sets a course for the Department to support the growing offshore wind industry and protect against the potential for environmental damage and adverse impacts to coastal communities.” 

NOIA: “UTTER FAILURE”

“The release of this U.S. offshore leasing program, mandated by law and long overdue, is an utter failure for the country,” says the National Ocean Industries Association. “President Biden’s approach to severely limit leasing significantly curtails access to a critical national asset at a time when energy inflation is rampant, the likelihood of a national recession looms, and global efforts are intensifying to curb greenhouse gas emissions. The White House simply ignores our energy realities, once again limiting U.S. energy production opportunities. With global demand at record levels and continuing to rise, regressive policies like this serve to harm Americans of all walks of life by putting upward pressure on prices at the pump, destroying good-paying jobs that form the fabric of Gulf Coast communities, and relinquishing geopolitical advantages of energy production to countries like Russia, Iran, and China.”

“Furthermore, the decision to postpone environmental analyses for individual lease sales needlessly compounds the erosion of long-term confidence and certainty in the Gulf of Mexico region. Environmental assessments for lease sales typically take one to two years to complete, which is precisely why they are conventionally carried out in tandem with leasing program development. Every prior administration, irrespective of party, followed this process in a way that enabled uninterrupted leasing activities. The choice to slow walk lease sales while the Interior Department embarks on environmental work is just setting the table for potential future delays, including from litigation by activist groups, and an offshore energy leasing cliff.

“Policies that limit domestic offshore development force us to rely more on energy imports, often from countries with higher emissions. This jeopardizes our energy security, and economic prosperity, and undermines our efforts to reduce emissions and combat climate change—goals purportedly championed by the current administration.”

API: PAIN AT THE PUMP

The American Petroleum Institute (API) today released the following statement from president and CEO Mike Sommers:

“At a time when inflation runs rampant across the country, the Biden administration is choosing failed energy policies that are adding to the pain Americans are feeling at the pump. This restrictive offshore leasing program is the latest tactic in a coordinated strategy to reduce energy production, ultimately weakening America’s energy dominance, limiting consumers access to affordable reliable energy and compromising our ability to lead on the global stage. For decades, we’ve strived for energy security and this administration keeps trying to give it away.”

MEANTIME, IN THE NORTH SEA …

As the Department of the Interior was moving to phase down U.S. offshore oil and gas, this week U.K. regulators agreed to allow Equinor to proceed with its plans to develop the Rosebank oil and gas field is located around 130 kilometers northwest of Shetland in approximately 1,100 meters of water depth. Total recoverable resources are estimated at around 300 million barrels of oil, with Phase 1 targeting an estimated 245 million barrels of oil.

“While the government is scaling up homegrown clean energy sources such as offshore wind and nuclear, the U.K. still relies on oil and gas and this will continue to be the case over the coming decades,” said a U.K. Government statement. “As the government takes forward a pragmatic, proportionate and realistic response to the path to net zero, a key part of this will be maintaining our domestic oil and gas industry which underpins our energy security and boosts the U.K. economy.”

“We are investing in our world-leading renewable energy but, as the independent Climate Change Committee recognizes, we will need oil and gas as part of that mix on the path to net zero and so it makes sense to use our own supplies from North Sea fields such as Rosebank,” said U.K. Energy Security Secretary, Claire Coutinho. “The jobs and billions of pounds this is worth to our economy will enable us to have greater energy independence, making us more secure against tyrants like Putin.”

• Download BOEM’s proposed 2024–2029 National Outer Continental Shelf Oil and Gas Leasing Program.