Fossil fuel energy companies looking to extract oil and natural gas from U.S. waters in the Gulf of Mexico got a boost on Wednesday, as they secured access to 1.6 million acres of waters offered at auction.
That was just a fraction of some 73.3 million acres of federal waters the Interior Department's Bureau of Ocean Energy Management (BOEM) opened up for bidding. Officials spent more than an hour reading aloud the bids in Lease Sale 259, with some 13,600 blocks of "outer continental shelf" acreage in the Gulf of Mexico at stake.
It's the second time this month that the Biden administration has opened federal territory for new oil drilling, after it approved the large and controversial Willow project in Alaska on March 13.
The oil and gas lease auction was written into a budget deal
Coming on the heels of the Alaska oil project, the Gulf of Mexico offshore lease sale renewed criticism of President Biden from environmental groups that note that his 2020 campaign promises included a climate plan "banning new oil and gas permitting on public lands and waters."
But the administration says it was compelled to open the huge swath of Gulf waters to drilling because of stipulations in the Inflation Reduction Act of 2022. The budget act coalesceed around a deal Democratic leaders reached with their conservative colleague Sen. Joe Manchin of West Virginia, inserting requirements for new oil and gas leases.
The law mandated that Lease Sale 259 be held "no later than March 30, 2023," the BOEM said. It adds that sections of the Inflation Reduction Act also bar Interior Secretary Deb Haaland from issuing a lease for offshore wind until her agency holds an offshore oil and gas lease sale, with at least 60 million acres offered.
The sale brought in nearly $264 million
In the sale, companies including Chevron and Exxon Mobil led the way with dozens of bids. Many of the blocks attracted only single offers; bids ranged from as low as $750 up to millions of dollars.
The sale generated $263.8 million in high bids for 313 blocks of waters, the BOEM said.
The bureau says it has taken potential impacts on marine, coastal and human environments into account.
"Leases resulting from this sale will include stipulations to mitigate potential adverse effects on protected species and to avoid potential conflicts with other ocean uses in the region," the agency said.
The Gulf auction is both lambasted and applauded
Coming in the wake of the Willow project, the auction in the Gulf contradicts the administration's pledges to combat climate change, Woody Martin of the Sierra Club's Delta Chapter in Louisiana told NPR.
"The sanctioning of huge fossil fuel extraction commits the U.S. to long-term fossil fuel dependency and continues a current path of rising carbon emissions that according to available science will lead to disastrous consequences and enormous costs for the U.S. and global economies," Martin said.
The American Petroleum Institute (API) cheered the sale, which it deemed "a belated but positive step toward a more energy-secure future."
Adding that "it should not take an act of Congress to get us to this point," the API said energy companies need more certainty to meet growing energy needs.
The group Oceana sharply criticized the sale, but it noted that Biden still has important decisions to make that will steer U.S. energy policy.
"Expanding dirty energy will worsen the climate crisis and new leasing for offshore oil and gas drilling must stop," Oceana Campaign Director Diane Hoskins said. "President Biden may claim his hands were tied on this sale because of the IRA's mandate, but he still has the opportunity to make good on his promise to end new oil and gas leasing in his Five-Year Plan."
The Interior Department is working on a new offshore leasing plan
The administration plans to have a new offshore oil and gas leasing plan in place by the end of this year. Haaland said on Tuesday that the next five-year offshore leasing sale plan should take effect by the end of 2023.
"We expect the final plan out in September and after the required review period it will be effective in December," Haaland said at a congressional budget hearing.
The plan is required by law; the oil industry has pushed the administration to work on it faster.
Rep. Jake Ellzey, a Texas Republican, asked Haaland about rumors the plan might not include any sales. Haaland said she can't decide that ahead of the planning process underway.
