President Biden’s oil and gas offshore lease plan is late and will be even later as the Interior Department argues it needs until December to finalize the plan. It told a court it needs the rest of the year to complete an analysis on the delayed five-year program, which will replace the expired 2017-2022 program. There is currently no active offshore leasing program providing for new lease sales despite the Outer Continental Shelf Lands Act mandating that the Secretary of the Interior ‘shall prepare’ this program to ‘best meet national energy needs.’ America’s energy future is on hold as the Biden Administration deliberates on how to comply with the law at the same time it is working to “end fossil fuels” as President Biden promised. Senator Manchin, who chairs the Energy and Natural Resources Committee, said the administration is “putting their radical climate agenda ahead of our nation’s energy security” with the delay and what is even more terrifying is that on top of this disturbing timeline, Interior refuses to confirm if they intend to actually include any lease sales in the final plan. The draft proposal released last July had an option of no lease sales.
Federal law directs the Interior Department to issue an offshore leasing program detailing the year and location of potential oil and gas lease sales over the course of a five-year period. All previous administrations have finalized new programs to take over expiring plans basically on time. Biden’s Department of Interior proposed its new five-year program in July 2022 when the previous plan expired but has yet to advance it further. It expects to publish a proposed final program in September 2023, which triggers a mandatory 60-day review period for the President and Congress, after which the secretary may approve the program. That schedule makes it 18 months late.
According to attorneys for the Interior Department, litigation brought by Republican states and oil and gas industry groups is a factor causing the delay. Before Interior can finalize a new five-year leasing plan, the administration has to respond to 760,000 public comments. It also needs to complete an analysis that includes greenhouse gas emissions and the economic impacts of alternative leasing scenarios. For the latter, the Interior Department says it needs data from the Energy Information Administration that should be available this month. It also needs to conduct analyses on leasing benefits and air quality, among others.
Inflation Reduction Act
The Inflation Reduction Act (IRA) directed the Department of interior to reinstate three offshore lease sales in the previous five-year program that Interior canceled in May 2022. Interior attorneys claim that this creates a temporary avenue for continued Outer Continental Shelf leasing until the end of September. The Biden administration held a lease sale in the Gulf of Mexico that was originally invalidated by the courts and another off the Alaska coast. Interior’s Bureau of Energy Management will hold another Gulf of Mexico lease sale on March 29, 2023, but environmental groups who oppose oil and gas leasing filed a lawsuit against that sale on March 6. The IRA also linked continued oil and gas leasing to the development of renewable energy on federal lands and in federal waters. Senator Manchin said, “I will remind the administration that the Inflation Reduction Act also prevents them from issuing any leases for renewables, like offshore wind or onshore solar, unless there are first reasonable lease sales for oil and gas that actually result in leases being awarded.”
Background
President Biden’s Department of Interior released its draft offshore lease plan late on July 1, 2022—just before the Fourth of July holiday and when American families were paying historically-high gasoline prices. A final plan was due by June 30, 2022 when the current plan ended. Biden’s 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 had 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. This was part of his “American Energy Dominance” policy, which sought to make the United States stronger.
Biden’s Abysmal Lease Record
When Biden became President, he immediately placed a moratorium on lease sales supposedly for agencies to review their practices due to climate change. During his first 19 months in office, President Biden leased fewer acres for offshore oil and gas production than any other President before him since the inception of offshore drilling rights. Not since Harry Truman have fewer acres of federal land or offshore rights to develop oil and gas resources been leased by a U.S. president. Under President Truman, offshore drilling was just beginning and the federal government did not yet control the deep-water leases that have made up the largest part of the federal oil-and-gas program. It is clear from the graph below that the Biden administration is withholding U.S. energy development at a time when the world is facing an energy crisis and consumers are experiencing very high energy prices. President Biden is withholding resources that Americans own, resulting in gasoline prices reaching an all-time high of $5 a gallon in June 2022 and remaining over a dollar per gallon above the gas price when he took office The following graph from the Wall Street Journal indicates how few acres have been leased during Biden’s first 19 months in office despite the law requiring oil and natural gas lease sales.
President Biden’s Interior Department leased 126,228 acres for drilling through August 20, 2022. Under Biden’s stewardship leasing is down 97 percent from the first 19 months of President Trump’s term. No other president since Richard Nixon in 1969-70 leased out fewer than 4.4 million acres at this stage in his first term, and that was in the wake of the Santa Barbara oil spill of January 1969. Harry Truman was the last president to lease out fewer acres—65,658—in 1945-46, but as noted above the offshore program was just starting during his term. During former presidents Jimmy Carter and Ronald Reagan, leasing was at record highs in the 1970s and early 1980s in response to geopolitical oil crises. Mr. Reagan still holds the record, leasing nearly 48 million acres in his first 19 months, almost three times as much as any other president.
The U.S. Department of Interior awarded 203 leases for oil and gas development during Biden’s first 19 months in office while former Presidents Trump and Obama each approved 10 times as many leases during that time period. Going back into prior Presidencies, the 203 leases under Mr. Biden amount to just 3.2 percent of what all the Presidents from Dwight Eisenhower to Donald Trump awarded on average in the same time period.
Conclusion
“No more drilling on federal lands, no more drilling including offshore—no ability for the oil industry to continue to drill—period,” Biden said when he ran for office. That’s the President’s plan and he has succeeded so far in placing delays and other obstacles in the way of leasing. The draft offshore leasing plan required by law will be at least 18 months late when it is finalized at the end of this year. And, it may state no lease sales since that was one of the options released in the proposal of July 1, 2022. About 15 percent of U.S. oil production was produced in the Gulf of Mexico in 2022 on leases that the American public owns, using American technology that has been deployed in other places around the world. Biden is doing his best to reduce that number by limiting new supplies. This is setting the stage for energy price hikes in the future, which Biden has typically blamed on the people working in the oil and gas industries that he is stopping from exploring.
