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The Biden administration on Friday unveiled plans for a record low number of offshore lease sales over the next five years, dealing a blow to the oil and gas industry.
Only three lease sales are planned in the Gulf of Mexico from 2025 to 2029 under the final terms of the government plan, which has been delayed for months amid fierce debate between climate and fossil fuel groups.
The number of lease sales is significantly lower than the Donald Trump administration’s original proposal, which called for as many as 47 lease sales that would open nearly all of the U.S. coast to drilling.
The restrictions are a disappointment to the oil and gas industry, which has been lobbying hard for greater access to the Gulf of Mexico – which accounts for about 15% of total U.S. crude production.
“This restrictive offshore leasing program is the latest tactic in a coordinated strategy to reduce energy production,” said Mike Summers, chief executive of the American Petroleum Institute, an industry group.
“(This) will ultimately undermine America’s energy dominance, limit consumers’ access to affordable, reliable energy, and harm our ability to lead on the global stage.”
But plans to completely reserve any oil and gas lease sales have also been slammed by environmentalists, who say it is a “missed opportunity” to minimize future drilling.
Earthjustice, a climate group that has previously sued the Biden administration over lease sales in the Gulf of Mexico, said it will continue to work with Gulf Coast communities to challenge new leases and the fossil fuel economy that “poisons humanity and drives climate change.” ”.
The White House said the three proposed lease sales comply with provisions of the Inflation Reduction Act, a landmark climate law linking offshore wind leases to offshore oil and gas development.
The IRA does not allow the Bureau of Ocean Energy Management to issue leases for offshore wind development unless the agency has made at least 60 million acres available for oil and gas leasing in the previous year.
The plan unveiled by the Interior Department comes as President Joe Biden walks a tightrope between climate action and energy security, passing aggressive climate policies while trying to limit rising gasoline prices.
This month, six congressional Democrats sent a letter to the White House urging the administration not to release new lease sales.
“We cannot achieve a safe climate, a healthy environment and a prosperous economy through drilling,” the lawmakers wrote, adding that energy security issues “will not be solved by introducing new leases.”
Analysts are skeptical that the five-year plan will have a significant impact on U.S. oil production. Offshore leases do not guarantee the discovery of oil and can take up to 10 years to explore and develop.
“Even if they were the most oil and gas friendly government in the world, these sales wouldn’t have much of an impact on production,” said Hunter Kornfeind, oil markets analyst at Rapidan Energy Group. He called concerns about the production impact “overblown.” .
Despite limited corporate investment, U.S. oil production is expected to reach a record high this year as more efficient shale mining techniques push production to 13 million barrels per day.
Biden has pledged not to pursue new oil and gas leasing on federal lands during his term as president and signed an executive order suspending new sales in his first month in office. Months later, that claim was rejected by a federal judge.
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