President Biden’s Department of Interior released its draft offshore lease plan late on July 1—just before the Fourth of July holiday, as American families were paying historically-high gasoline prices for their travels. The plan is required by law and a final plan was due by June 30, when the current plan ended. The draft plan lays out several options for public input regarding the number of offshore oil and gas lease sales that should be held over the next five years, ranging from zero to eleven. In total, the draft plan has ten potential new leases in the Gulf of Mexico and one in the Cook Inlet off the southern coast of Alaska. There are no new leases in federal waters off the Atlantic and Pacific coasts. Biden’s plan is in sharp contrast to President Trump’s proposed offshore lease plan that had 47 new offshore drilling leases, including in the Atlantic and Pacific oceans. President Trump had proposed a vast expansion of drilling sales to cover more than 90 percent of coastal waters, including areas off California and new zones in the Atlantic and Arctic. The earliest Biden’s offshore lease program could be finalized is likely late fall.
President Biden claims he is doing all he can to bring down gasoline prices, but he does not offer up what counts—providing a means to obtain new domestic oil supplies or ending his official policies to “end fossil fuels.” Instead, he canceled the Keystone XL pipeline, uses up emergency oil supplies in the Strategic Petroleum Reserve, begs OPEC to boost production, demands refiners to raise output when they are already producing at high rates, calls on oil companies to expand production under existing leases, and asks Congress to approve a gasoline tax holiday. All of this is in an effort to convince Americans that he is doing all that he can without making any sizeable contribution to gasoline prices that were less than half their recent high when Biden took office.
That’s because Biden does not want to increase domestic production. Instead, he prefers we import oil from OPEC, Iran or Venezuela. In fact, Biden vowed to suspend all new federal drilling on public lands and waters, but had to change that position when legal challenges from several states and oil companies resulted in a judge indicating that he did not have that power. It is also not because he is keeping federal waters pristine since he is pushing for offshore wind, despite the fact that hurricanes can affect them as well and cause unwanted materials to land in U.S. waters. Biden wants 30 gigawatts of offshore wind turbines in federal waters by 2030. To reach that goal, the Biden administration recently launched a partnership with a half dozen state governors to accelerate offshore wind along the East Coast—an area forbidden to oil leases.
Biden Has Held One Offshore Lease Sale
The Interior Department’s most recent offshore oil and gas auction was in November in the Gulf of Mexico. Shell, BP, Chevron and Exxon Mobil offered $192 million for the rights to drill on 1.7 million acres of oil and gas leases in the November 17 lease sale. However, a court order later vacated the sale, arguing that the administration did not adequately account for the climate effects of the oil and gas consumption that would result from the lease sale. The Biden administration did not appeal the decision, which is not surprising because they only held the sale after being ordered to by another federal judge.
Instead, the Interior Department canceled 3 oil and gas lease sales in the Gulf of Mexico and Alaska’s Cook Inlet. According to the Interior Department, the Cook Inlet lease sale did not proceed due to insufficient industry interest and the planned sale of two leases, lease 259 and lease 261, in the Gulf of Mexico did not proceed due to contradictory court rulings on the leases. The Alaska lease would have covered more than 1 million acres that would provide oil for 40 or more years of production. These cancellations came when the national average price of regular gas hit a high of $4.418 a gallon, and with the CPI increasing almost 15 percent since Biden took office.
Conclusion
Under federal law, auctions of offshore oil and gas drilling rights can only be held under the formal five-year plans. It is clear congressional law that directs the Interior Department to expeditiously lease the Outer Continental shelf: “the outer continental shelf is a vital national resource reserve held by the Federal Government for the public, which should be made available for expeditious and orderly development subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs.”
The Biden draft plan is an initial but tentative step in the process, and appears to be the minimum possible movement to hold off a lawsuit regarding their failure to follow the law. Following a 90-day period for public comment, the Bureau of Ocean Energy Management will put together a proposal for the final program for the Interior Secretary to review and approve within a minimum of 60 days. Biden’s final program, however, may not actually authorize any lease sales, which would be to the detriment of the American public, who actually owns U.S. federal lands and waters and depends on oil for 36 percent – the largest percentage – of its energy supply.
As API Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola said, “Because of their failure to act, the U.S. is now in the unprecedented position of having a substantial gap between programs for the first time since this process began in the early 1980s, leaving U.S. producers at a significant disadvantage on the global stage and putting our economic and national security at risk.”
