Interior Department moves forward with oil and gas drill site leasing

In order to comply with a provision of the climate, tax and health care law signed in August the Interior Department announced Thursday it would move forward with onshore and offshore oil and gas lease sales on federal lands and waters.

At the behest of Senate Energy and Natural Resources Chairman Joe Manchin III, D-W.Va., the law included provisions that required the Interior Department to conduct offshore leases it had previously canceled and specified that land could only be leased for renewable energy development if a certain acreage was offered for oil and natural gas leasing.

For onshore leasing, the Bureau of Land Management will begin scoping for its next sales in New Mexico and Wyoming "under a strategy that includes onshore lease sales consistent with the terms of the law," which include changes such as increasing the minimum royalty rate, assessing a fee for filings of expressions of interest and eliminating non-competitive leasing.

For offshore leasing, the Bureau of Ocean Energy Management released a draft environmental impact statement for two Gulf of Mexico oil and gas lease sales which the law directed the department to conduct by March and September of next year respectively.

Both lease sales, along with a third in Alaska's Cook Inlet, were originally included in the department's 2017-22 offshore oil and gas leasing program. The Interior Department announced in May that it would not move forward with the sales, citing a lack of industry interest and delays, in part due to conflicting court rulings.

The Biden administration did not finalize a new offshore oil and gas leasing program prior to the previous program's expiration at the end of June. The American Petroleum Institute and other industry groups criticized the administration over this, arguing that it created uncertainty for oil and natural gas producers.

Cole Ramsey, API's vice president for exploration and production policy, said on a call with reporters that the move was a welcomed announcement "but it still does not replace a finalized five-year program."

The announcement came on the final day of the 90-day public comment period for the proposed 2023-28 offshore leasing program, which includes options ranging from zero to 11 lease sales in the Gulf of Mexico and the Cook Inlet. The close of the comment period was also marked by protesters from Protect Our Coasts, a coalition of anti-offshore drilling groups that said it would bring 50 boxes of comment letters to the Biden administration.

API, the National Ocean Industries Association and other industry groups encouraged the Biden administration to finalize a plan that included all 11 lease sales in order to reduce dependence on foreign oil. On Wednesday the OPEC+ oil cartel said it would cut production by 2 million barrels per day beginning in November despite calls from the Biden administration.

"Yesterday's OPEC+ announcement is just another example of why we need continued and increased American energy production," said Christopher Guith, senior vice president of policy at the U.S. Chamber of Commerce's Global Energy Institute. "We should be reducing reliance on foreign sources of energy and we should be supporting our allies who are trying to wean themselves off Russian oil to stop funding Putin's war machine."

However, some environmental groups have encouraged President Joe Biden to meet his campaign pledge to end federal oil and gas leasing. Groups including Oceana and Healthy Gulf planned to protest outside the White House on Thursday, calling on the administration to finalize a program that would allow no new leasing.