GoM oil and gas lease sale generates $191.6 million in high bids

Written by Nick Blenkey
offshore oil rig

Image: BOEM

The Biden administration today complied with a court order and held a Gulf of Mexico oil and gas lease sale it had tried to cancel. According to the Bureau of Ocean Energy Management (BOEM) the sale, Gulf of Mexico Lease Sale 257, generated $191,688,984 in high bids for 308 tracts covering 1.7 million acres in federal waters of the Gulf of Mexico.

While environmental groups were not well pleased that the sale had taken place, National Ocean Industries Association (NOIA) President Erik Milito made the that the sale reflected the U.S. Gulf of Mexico’s record as a low carbon energy basin.

“Energy companies are increasingly making decisions that incorporate climate and ESG factors and want to produce oil from regions with a low carbon intensity,” said Milito. “With its world class infrastructure and prospective resources, the Gulf of Mexico provides an incredible value proposition in society’s efforts to tackle climate change while preserving jobs and economic growth and mitigating against inflationary energy prices.

“While providing a lower carbon energy alternative to oil produced by foreign, higher emitting producers, like Russia and China, the Gulf of Mexico supply chain is also contributing to the build-out of the American offshore wind sector and is investing in emissions mitigation solutions such as carbon capture and storage.

“The benefits that flow from the Gulf of Mexico oil and gas industry are vast. The Gulf of Mexico supports hundreds of thousands of high paying and accessible jobs, generates vital government revenues for conservation and recreation programs, including ones in economically distressed urban areas, and provides home grown energy to help avert inflationary risks and proactively ensure affordable energy for all walks of life, especially low-income communities. Regardless of party, policymakers should embrace the Gulf of Mexico and recognize it as a national strategic energy asset.

“Continued leasing is critical to our energy future; good decisions today will benefit America tomorrow. With the current leasing program expiring this coming summer, the Biden administration must expeditiously finalize the next Five Year Program for OCS oil and gas leasing. Not only is the development of a new leasing program required by law, but continued lease sales will advance climate progress, stimulate continued economic growth, support high-paying jobs throughout the country, and strengthen our long-term national security.”

Chances of the administration expeditiously finalizing the next five year oil and gas program would seem slim.

BOEM noted today’s sale was consistent with a U.S. District Court’s preliminary injunction, while the government appeals the decision and said that the administration is continuing its comprehensive review of its offshore and onshore oil and gas leasing programs and initiating reforms. Moving forward, BOEM says it will use updated greenhouse gas emission models to take substitution impacts and foreign oil consumption into account, resulting in the most robust projections ever of the climate impacts of offshore lease sales, as well as analyzing the social cost of carbon to better understand the true impacts of fossil fuel leasing decisions.

Look at the lease sale stats now.

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