Biden's Administration Bars Millions of Acres from Oil and Gas Leasing Following Agreement with Environmental Groups

In an unexpected move, the Biden administration has obstructed access to millions of acres of federal waters for an imminent oil and gas lease sale. This decision comes in the wake of a settlement with environmental cohorts over wildlife conservation.

Key stakeholders such as JKC Trucking VP Mike Kucharski, mother of three Jamaica Bonvillian, and Jon German, owner of the Black Market BBQ food truck, recently discussed the potential implications of this exclusive report, citing how climbing gas prices have affected them personally.

The Bureau of Ocean Energy Management (BOEM), a subdivision of the Interior Department tasked with managing offshore energy development, issued a final notice of the sale for Lease Sale 261, which incidentally includes six million fewer acres than earlier planned.

The upcoming Gulf of Mexico lease sale, scheduled for the end of September, marks the final planned federal oil and gas sale. Erik Milito, President of the National Ocean Industries Association, expressed concern ahead of the announcement about the reduction in acreage offered in the lease sale.

Milito pointed out the potentially significant impact on U.S. energy production capabilities, especially considering the existing production facilities in the vicinity of the withdrawn acreage. He also highlighted the increasing burdens placed on Americans by inflation, including escalating gasoline prices.

The Bureau juxtaposed its previous plan to offer 13,620 blocks across 73.4 million acres with a new proposal spanning approximately 67 million acres in the Gulf of Mexico. Worryingly for industry insiders, the acreage cut from the sale includes potentially oil-rich tracts centrally located in the lease area.

Holly Hopkins, Vice President of Upstream Policy at the American Petroleum Institute, criticized the Biden administration’s decision, which she believes not only breaks with Congress' Inflation Reduction Act, but also seriously undermines U.S. energy security and violates the administration's energy obligations to the American public.

In addition to substantial reduction of available acreage, the BOEM imposed traffic restrictions on oil and gas vessels connecting to the leases due for auction. Hopkins argued these restrictions single out the oil and gas industry, neglecting the broader range of vessels operating in the area.

This shift comes after an agreement last month between the Biden administration and an environmental coalition led by the Sierra Club. The coalition had previously sued the National Marine Fisheries Service (NMFS) for allegedly failing to accurately gauge the oil industry's effect on endangered marine wildlife in the Gulf of Mexico.

As part of the July 21 agreement, in return for temporarily halting litigation, the NMFS consented to a variety of conditions presented by the groups. A key element of the settlement consists of expanded protections for the endangered species, Rice’s whale.

The decisions made on Wednesday have been met with resistance, with industry bodies like NOIA and the API asserting they contravene the congressional intent of the Inflation Reduction Act. The latter originally reinstated multiple lease sales, including Lease Sale 261, after they were cancelled by the Biden administration in May 2022.

Concerns were also raised about the sale’s record of decision, which requires a region-wide approach and seems to undervalue the potential risks posed to certain endangered species, notably the Rice’s whale.

This news, unfolded by Thomas Catenacci, discloses the uncertainty and challenges faced by the American energy industry in the lights of political decisions.