Industry groups call for expansion of offshore lease sales as DOI plans to limit access

July 03, 2022

Industry groups reacted to the Department of Interior’s release of its five-year offshore drilling plan that seeks to block new offshore drilling in the Atlantic and Pacific oceans, saying it would be an overall disadvantage to America and its energy security.

The Department of Interior on Friday released its five-year offshore leasing plan, which they are required to do by law. It contains much ambiguity and uncertainty for the industry, signaling a plan for 11 lease sales, but not guaranteeing any lease sales, Energy Workforce & Technology Council CEO Leslie Beyer said.

Also, the plan limits access to two of our bordering oceans,” Beyer said. “If the Administration's goal is truly to bring down energy costs and provide energy security for our nation, the Department should be expanding offshore drilling access to boost production to meet demand instead of limiting leases and continuing to disincentivize domestic production.”

The American Petroleum Institute (API) Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola said the announcement leaves open the possibility of no new offshore lease sales, the continuation of a policy that has gone on for far too long.
“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,” Macchiarola said.

National Ocean Industries Association President Erik Milito the Biden administration must act swiftly to finalize and implement the offshore oil and gas leasing program.

“We are in the middle of a substantial, unnecessary, and avoidable gap in offshore leasing that is having serious impacts for both near-term and long-term investment in U.S. energy production,” Milito said. “The gap in offshore lease sales – and all of negative impacts associated with reduced domestic production – will continue for the foreseeable future until a final leasing program is in place and lease sales resume.”

The proposed leasing plan is just one step in that process, he said, adding it is imperative that the Administration act without any further delays and finalize the program as proposed, without reduced acreage. At a time of historic tightness in the global oil marketplace and associated high prices for Americans, energy policies are needed that promote continued and growing supplies from U.S. producing regions.
“Every administration – whether they were Republican or Democrat – have recognized the strategic advantages of the U.S. offshore and fulfilled their statutory obligation to maintain an offshore leasing program and continuously hold lease sales. This is the first year that the U.S. will not hold an offshore lease sale since 1965,” Milito said.

“Including two lease sales per year in the Gulf of Mexico – as proposed – supports the long-term competitiveness of the U.S. offshore. Most leases do not contain commercially viable amounts of oil or gas. Efforts to limit acreage or hold fewer lease sales would needlessly eliminates opportunities for U.S. energy production in a basin that is recognized as providing among the lowest carbon barrels. Wood Mackenzie predicts that restrictions on U.S. Gulf of Mexico production could ‘have a counterproductive impact on global emissions.’  

“The final offshore leasing program must include multiple, region-wide lease sales per year in the Gulf of Mexico to provide the flexibility necessary for companies to adapt to rapidly changing market conditions and to pursue the most promising geologic prospects of hydrocarbons. The U.S. offshore Gulf of Mexico region is one of the top oil producing basins in the world. It is world class, high-tech, and is characterized by low carbon emissions. We can work together to advance energy policy that is grounded in reality by securing affordable, reliable, and environmentally responsible energy here at home, while also widening the pathway for deployment of low and zero carbon technologies and energy sources. We need to look no further than the U.S. Gulf of Mexico to achieve our energy policy goals, and this requires the prompt finalization and resumption of a robust domestic offshore oil and gas leasing program."

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