MATTHEW DALY
Fri, September 29, 2023
Sen. Joe Manchin, D-W.Va., chair of the Senate Energy and Natural Resources Committee, speaks during a committee hearing, May 2, 2023, on Capitol Hill in Washington. The Biden administration on Friday proposed up to three oil and gas lease sales in the Gulf of Mexico over the next five years — and none in Alaska — as it tries to navigate between energy companies that have pressed for greater oil and gas production and environmental activists who have urged President Joe Biden to shut down new offshore drilling in the fight against climate change.
(AP Photo/J. Scott Applewhite, File)
WASHINGTON (AP) — President Joe Biden's administration on Friday proposed up to three oil and gas lease sales in the Gulf of Mexico but none in Alaska as it tries to navigate between energy companies seeking greater oil and gas production and environmental activists who want Biden to shut down new offshore drilling in the fight against climate change.
The five-year plan includes proposed sales in the Gulf of Mexico, the nation’s primary offshore source of oil and gas, in 2025, 2027 and 2029. The three lease sales are the minimum number the Democratic administration could legally offer if it wants to continue expanding offshore wind development.
Under the terms of a 2022 climate law, the government must offer at least 60 million acres of offshore oil and gas leases in any one-year period before it can offer offshore wind leases.
The provision tying offshore wind to oil and gas production was added by Democratic Sen. Joe Manchin of West Virginia, a top recipient of oil and gas donations and a key vote in favor of the climate law, which was approved with only Democratic votes in the House and the Senate. The landmark law, the Inflation Reduction Act, was signed by Biden as a key step to fight climate change but includes a number of provisions authored by Manchin, a centrist who represents an energy-producing state.
For instance, if the Biden administration wants to expand solar and wind power on public lands, it must offer new oil and gas leases first.
“The Biden-Harris administration is committed to building a clean energy future that ensures America’s energy independence,” Interior Secretary Deb Haaland said in a statement. The proposed offshore leasing program “represents the smallest number of oil and gas lease sales in history” and “sets a course for (the Interior Department) to support the growing offshore wind industry,” she said.
The lease program will guard against environmental damage caused by oil and gas drilling and other adverse impacts to coastal communities, Haaland said.
Still, the plan allows drillers such as Chevron, BP and ExxonMobil to participate in as many as three oil and gas auctions over the next five years, a top priority for the industry that could lock in decades of offshore oil and gas production.
The plan goes against Biden's campaign promise to end new offshore drilling and could become a political liability for the Democratic president, who already faces sharp opposition from environmental groups angry at his decision earlier this year to approve ConocoPhillips' massive Willow oil project in Alaska.
ConocoPhillips CEO Ryan Lance called Willow “the right decision for Alaska and our nation.” But environmental groups call the $8 billion project a “carbon bomb” that would betray Biden's pledge to cut planet-warming greenhouse gas emissions in half by 2030. Opponents mounted a #StopWillow campaign on social media that has been seen hundreds of millions of times.
Interior Deputy Secretary Tommy Beaudreau appeared to acknowledge the contradiction on Thursday, telling a Senate hearing that the administration’s options were limited by the climate law.
“The (oil leasing) program is definitely informed by the IRA and the connection that the IRA makes between offshore oil and gas leasing and renewable energy leasing,” he said, referring to the Inflation Reduction Act.
The Interior Department can’t sell the rights to drill for oil and gas offshore without first publishing a schedule that outlines its plans. The administration faced a Saturday deadline to release the five-year plan.
Environmentalists said the decision to lease more oil reserves would worsen climate change impacts from oil and gas emissions and leave coastal communities exposed to spills that occur regularly in the Gulf of Mexico.
“President Biden is unfortunately showing the world that it’s OK to continue to prioritize polluters over real climate solutions,” said Beth Lowell, U.S. vice president for the environmental group Oceana. “Expanding dirty and dangerous offshore drilling only exacerbates the climate catastrophe that is already at our doorstep.''
The American Petroleum Institute, the top lobbying group for the oil and gas industry, said Biden "is choosing failed energy policies that are adding to the pain Americans are feeling at the pump.''
“This restrictive offshore leasing program is the latest tactic in a coordinated strategy to reduce energy production, limiting consumers' access to affordable reliable energy and compromising our ability to lead on the global stage,'' API CEO Mike Sommers said in a statement.
The oil industry and its allies have said since last year that the administration’s delay in finalizing a new offshore leasing framework after the prior five-year plan expired in 2022 would cause problems for companies trying to make their own plans. They’ve called for more leasing, not less, to ensure a steady supply of domestic oil.
At the last lease sale, in March, companies including Chevron, BP and ExxonMobil bid $264 million for drilling rights in the Gulf, a sharp rise from the previous auction in 2021. That lease sale was the first after the Biden administration raised royalty rates that companies must pay on the oil they produce to 18.75%, up from the previous rate of 12.5%.
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Associated Press writer Matthew Brown in Billings, Mont., contributed to this story.
Biden administration approves more offshore drilling in bid to expand wind energy
WASHINGTON (AP) — President Joe Biden's administration on Friday proposed up to three oil and gas lease sales in the Gulf of Mexico but none in Alaska as it tries to navigate between energy companies seeking greater oil and gas production and environmental activists who want Biden to shut down new offshore drilling in the fight against climate change.
The five-year plan includes proposed sales in the Gulf of Mexico, the nation’s primary offshore source of oil and gas, in 2025, 2027 and 2029. The three lease sales are the minimum number the Democratic administration could legally offer if it wants to continue expanding offshore wind development.
Under the terms of a 2022 climate law, the government must offer at least 60 million acres of offshore oil and gas leases in any one-year period before it can offer offshore wind leases.
The provision tying offshore wind to oil and gas production was added by Democratic Sen. Joe Manchin of West Virginia, a top recipient of oil and gas donations and a key vote in favor of the climate law, which was approved with only Democratic votes in the House and the Senate. The landmark law, the Inflation Reduction Act, was signed by Biden as a key step to fight climate change but includes a number of provisions authored by Manchin, a centrist who represents an energy-producing state.
For instance, if the Biden administration wants to expand solar and wind power on public lands, it must offer new oil and gas leases first.
“The Biden-Harris administration is committed to building a clean energy future that ensures America’s energy independence,” Interior Secretary Deb Haaland said in a statement. The proposed offshore leasing program “represents the smallest number of oil and gas lease sales in history” and “sets a course for (the Interior Department) to support the growing offshore wind industry,” she said.
The lease program will guard against environmental damage caused by oil and gas drilling and other adverse impacts to coastal communities, Haaland said.
Still, the plan allows drillers such as Chevron, BP and ExxonMobil to participate in as many as three oil and gas auctions over the next five years, a top priority for the industry that could lock in decades of offshore oil and gas production.
The plan goes against Biden's campaign promise to end new offshore drilling and could become a political liability for the Democratic president, who already faces sharp opposition from environmental groups angry at his decision earlier this year to approve ConocoPhillips' massive Willow oil project in Alaska.
ConocoPhillips CEO Ryan Lance called Willow “the right decision for Alaska and our nation.” But environmental groups call the $8 billion project a “carbon bomb” that would betray Biden's pledge to cut planet-warming greenhouse gas emissions in half by 2030. Opponents mounted a #StopWillow campaign on social media that has been seen hundreds of millions of times.
Interior Deputy Secretary Tommy Beaudreau appeared to acknowledge the contradiction on Thursday, telling a Senate hearing that the administration’s options were limited by the climate law.
“The (oil leasing) program is definitely informed by the IRA and the connection that the IRA makes between offshore oil and gas leasing and renewable energy leasing,” he said, referring to the Inflation Reduction Act.
The Interior Department can’t sell the rights to drill for oil and gas offshore without first publishing a schedule that outlines its plans. The administration faced a Saturday deadline to release the five-year plan.
Environmentalists said the decision to lease more oil reserves would worsen climate change impacts from oil and gas emissions and leave coastal communities exposed to spills that occur regularly in the Gulf of Mexico.
“President Biden is unfortunately showing the world that it’s OK to continue to prioritize polluters over real climate solutions,” said Beth Lowell, U.S. vice president for the environmental group Oceana. “Expanding dirty and dangerous offshore drilling only exacerbates the climate catastrophe that is already at our doorstep.''
The American Petroleum Institute, the top lobbying group for the oil and gas industry, said Biden "is choosing failed energy policies that are adding to the pain Americans are feeling at the pump.''
“This restrictive offshore leasing program is the latest tactic in a coordinated strategy to reduce energy production, limiting consumers' access to affordable reliable energy and compromising our ability to lead on the global stage,'' API CEO Mike Sommers said in a statement.
The oil industry and its allies have said since last year that the administration’s delay in finalizing a new offshore leasing framework after the prior five-year plan expired in 2022 would cause problems for companies trying to make their own plans. They’ve called for more leasing, not less, to ensure a steady supply of domestic oil.
At the last lease sale, in March, companies including Chevron, BP and ExxonMobil bid $264 million for drilling rights in the Gulf, a sharp rise from the previous auction in 2021. That lease sale was the first after the Biden administration raised royalty rates that companies must pay on the oil they produce to 18.75%, up from the previous rate of 12.5%.
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Associated Press writer Matthew Brown in Billings, Mont., contributed to this story.
Biden administration approves more offshore drilling in bid to expand wind energy
Ella Nilsen, CNN
Fri, September 29, 2023
Luke Sharrett/Bloomberg/Getty Images
The Biden administration announced Friday it is planning as many as three new oil and gas drilling lease sales in federal waters over the next five years – a move that could anger Republicans, pro-industry groups and climate advocates alike and that will likely prompt legal challenges.
But the plan, which the Interior Department was required by law to create, comes with a trade-off: It allows officials to offer more federal waters for clean wind energy.
The five-year drilling plan “represents the smallest number of oil and gas lease sales in history,” Interior Secretary Deb Haaland said in a statement. The administration had previously proposed more drilling areas – up to 11 possible sales.
The three sales would all take place in the Gulf of Mexico, scheduled for 2025, 2027 and 2029. The plan nixed the possibility of lease sales off Alaska’s Cook Inlet.
The plan “sets a course for the Department to support the growing offshore wind industry and protect against the potential for environmental damage and adverse impacts to coastal communities,” Haaland said.
The Inflation Reduction Act required the Interior Department to propose a certain number of oil and gas leases in federal waters in exchange for the ability to propose clean offshore wind energy projects. Three was the lowest number that would allow it to move forward with offshore wind lease sales around the country, the department said, given the requirements of the law.
Tying clean wind energy to fossil fuel drilling was a key demand of Sen. Joe Manchin, the West Virginia Democrat who wrote much of the bill.
Biden’s plan is in stark contrast to that of the Trump administration, which originally proposed 47 lease sales off all coastal areas in the US, including the Atlantic and Pacific oceans, over the five years from 2024 to 2029.
But even three drilling sales will frustrate climate advocates, who have pressed the administration to take a tougher line on offshore drilling and wanted no new oil and gas lease sales approved. Brettny Hardy, an attorney at Earthjustice, a nonprofit environmental litigation firm, said she believes the administration could satisfy the requirements of law by doing the bare minimum.
“They could achieve all of the wind development they have planned with only one oil and gas sale in the five-year program,” Hardy said. “The agency can still hold those sales without any more oil and gas leasing. Under their regulations, all they need to do is hold an oil and gas sale in order to issue the wind leases that were sold.”
That argument likely would not go over well with Republicans in Congress or Manchin, who has frequently blasted the administration for what he characterizes as anti-energy policies in pursuit of climate action.
Heading into an election year, Republicans are also keen to tie any administration actions that seemingly pare down oil and gas drilling to raising gas prices – two things that are largely unrelated as gas prices are tied to the whims of global markets.
As CNN reported last year, the White House was involved in crafting Interior’s proposed offshore drilling plan, two sources familiar with the discussions told CNN, a sign of how sensitive top officials are to the politics around oil and gas decisions.
Interior’s pared-back plan will likely prompt legal challenges from the oil industry and Republican states. And even with the reduced number of proposed projects, the five-year plan could still set up the next fight between the Biden administration and Gulf Coast communities and environmental advocates who want the administration to stop approving new oil and gas projects altogether.
With past major new oil projects that have been approved, such as the Willow project in Alaska, the Biden administration has frequently said it must comply with laws that require certain projects to go forward. Still, that answer hasn’t satisfied environmental and youth climate groups – who have warned that new oil and gas project approvals risks alienating young voters ahead of the 2024 presidential election.
Hardy said that the Biden administration “still has a responsibility to minimize harm to Gulf communities” as they decide the short-term future of the federal offshore oil and gas leasing program.
Biden to Offer Smallest-Ever Offshore Oil Rights Sale Plan
Jennifer A. Dlouhy and Jennifer Jacobs
Thu, September 28, 2023
(Bloomberg) -- The Biden administration is charting plans to sell offshore oil-drilling rights in the Gulf of Mexico over the next five years, while trimming the program to its smallest level ever.
The oil leasing plan being released by the Interior Department on Friday will contain only a low number of sales, according to people familiar with the deliberations who declined to be named because the blueprint isn’t yet public. That’s far from the 11 sales the agency proposed last year, and it would be the lowest in history.
Still, even a single auction is a blow to environmentalists who argued new leasing isn’t compatible with the urgent need to decarbonize by mid-century and would lock in oil development for decades — even as domestic demand shrinks.
Oil industry advocates had pushed for a robust sale schedule to ensure steady production in the Gulf of Mexico, which provides roughly 15% of US crude output today.
The plan’s release comes as dwindling crude stockpiles push oil futures toward $100 a barrel. However, it would take years for any new leases to lead to exploratory drilling, much less actual crude production.
A major factor in the administration’s decision is an Inflation Reduction Act provision blocking the Interior Department from issuing new offshore wind leases unless in the prior year it had held an oil lease sale putting at least 60 million acres up for grabs. The requirement developed by Senator Joe Manchin, a Democrat from West Virginia, was seen tying the agency’s hands and forcing at least one oil auction to allow future sales of wind rights in the Gulf of Maine and off the Oregon coast.
White House and Interior Department spokespeople didn’t immediately respond to a request for comment. But Deputy Secretary of the Interior Tommy Beaudreau on Thursday told a Senate panel the five-year program “is definitely informed by the IRA and the connection the IRA makes between offshore oil and gas leasing and renewable energy leasing.”
Offshore wind supporters have told administration officials that they need a pipeline of new coastal opportunities to nurture a domestic supply chain that includes manufacturing of turbine towers, foundations, blades and other gear. But environmentalists stressed that the Interior Department need only hold one or two oil sales to meet offshore wind targets.
“We’re in a climate crisis, and we’re not going to drill our way to less emissions,” said Valerie Cleland, a senior ocean advocate with the Natural Resources Defense Council. “If the administration’s primary goal is to maximize all future offshore wind leasing, the administration could do all of the offshore wind leasing in the pipeline with one — at most two — offshore oil and gas lease sales.”
On the campaign trail, President Joe Biden promised to combat climate change and ban new oil and gas permitting on public lands and waters. Activists argue the industry already has a substantial portfolio of untapped leases — about 9 million acres worth, according to government data.
“We know the solution is to shift away from fossil fuels,” said Jacqueline Savitz, chief policy officer for the conservation group Oceana. “And we know President Biden knows that. He promised he wasn’t going to sell any new leases, he’s not required to do this by law, and if he does propose new leases, he’s breaking that promise.”
But the oil industry has argued the recent approach — with generally twice-yearly sales of leases across a broad swath of the Gulf of Mexico — is the most efficient way to foster development necessary to meet the world’s energy needs. They stress the oil extracted from the Gulf is among the least carbon-intensive in the world.
The typical pattern of two sales a year is an appropriate “frequency that allows the industry to step up and get the acreage they need in order to sustain production and build production,” said Erik Milito, head of the National Ocean Industries Association.
Congress will have 60 days to review the blueprint and advance legislation seeking changes once the plan is released.
The schedule is a legally required precursor to leasing offshore waters for oil development; this one is set to govern potential sales through late 2028. While a different, future administration could seek to alter course, the blueprint itself takes years to develop, defying quick pivots.
An earlier Biden administration proposal left the door open for as many as 11 auctions of offshore oil and gas leases — 10 in the Gulf of Mexico and one in Alaska’s Cook Inlet. The previous Obama-era plan, which expired June 30 of last year, also contained 11 sales.
(Updates with further leasing details and industry comment starting in first paragraph.)
Biden administration to release long-awaited offshore oil plan Friday
Thu, September 28, 2023
(Bloomberg) -- The Biden administration is charting plans to sell offshore oil-drilling rights in the Gulf of Mexico over the next five years, while trimming the program to its smallest level ever.
The oil leasing plan being released by the Interior Department on Friday will contain only a low number of sales, according to people familiar with the deliberations who declined to be named because the blueprint isn’t yet public. That’s far from the 11 sales the agency proposed last year, and it would be the lowest in history.
Still, even a single auction is a blow to environmentalists who argued new leasing isn’t compatible with the urgent need to decarbonize by mid-century and would lock in oil development for decades — even as domestic demand shrinks.
Oil industry advocates had pushed for a robust sale schedule to ensure steady production in the Gulf of Mexico, which provides roughly 15% of US crude output today.
The plan’s release comes as dwindling crude stockpiles push oil futures toward $100 a barrel. However, it would take years for any new leases to lead to exploratory drilling, much less actual crude production.
A major factor in the administration’s decision is an Inflation Reduction Act provision blocking the Interior Department from issuing new offshore wind leases unless in the prior year it had held an oil lease sale putting at least 60 million acres up for grabs. The requirement developed by Senator Joe Manchin, a Democrat from West Virginia, was seen tying the agency’s hands and forcing at least one oil auction to allow future sales of wind rights in the Gulf of Maine and off the Oregon coast.
White House and Interior Department spokespeople didn’t immediately respond to a request for comment. But Deputy Secretary of the Interior Tommy Beaudreau on Thursday told a Senate panel the five-year program “is definitely informed by the IRA and the connection the IRA makes between offshore oil and gas leasing and renewable energy leasing.”
Offshore wind supporters have told administration officials that they need a pipeline of new coastal opportunities to nurture a domestic supply chain that includes manufacturing of turbine towers, foundations, blades and other gear. But environmentalists stressed that the Interior Department need only hold one or two oil sales to meet offshore wind targets.
“We’re in a climate crisis, and we’re not going to drill our way to less emissions,” said Valerie Cleland, a senior ocean advocate with the Natural Resources Defense Council. “If the administration’s primary goal is to maximize all future offshore wind leasing, the administration could do all of the offshore wind leasing in the pipeline with one — at most two — offshore oil and gas lease sales.”
On the campaign trail, President Joe Biden promised to combat climate change and ban new oil and gas permitting on public lands and waters. Activists argue the industry already has a substantial portfolio of untapped leases — about 9 million acres worth, according to government data.
“We know the solution is to shift away from fossil fuels,” said Jacqueline Savitz, chief policy officer for the conservation group Oceana. “And we know President Biden knows that. He promised he wasn’t going to sell any new leases, he’s not required to do this by law, and if he does propose new leases, he’s breaking that promise.”
But the oil industry has argued the recent approach — with generally twice-yearly sales of leases across a broad swath of the Gulf of Mexico — is the most efficient way to foster development necessary to meet the world’s energy needs. They stress the oil extracted from the Gulf is among the least carbon-intensive in the world.
The typical pattern of two sales a year is an appropriate “frequency that allows the industry to step up and get the acreage they need in order to sustain production and build production,” said Erik Milito, head of the National Ocean Industries Association.
Congress will have 60 days to review the blueprint and advance legislation seeking changes once the plan is released.
The schedule is a legally required precursor to leasing offshore waters for oil development; this one is set to govern potential sales through late 2028. While a different, future administration could seek to alter course, the blueprint itself takes years to develop, defying quick pivots.
An earlier Biden administration proposal left the door open for as many as 11 auctions of offshore oil and gas leases — 10 in the Gulf of Mexico and one in Alaska’s Cook Inlet. The previous Obama-era plan, which expired June 30 of last year, also contained 11 sales.
(Updates with further leasing details and industry comment starting in first paragraph.)
Biden administration to release long-awaited offshore oil plan Friday
Rachel Frazin
Thu, September 28, 2023
The Biden administration will release on Friday its long-awaited plan that maps out the next five years of offshore drilling, a top official said.
“We’ll be publishing the five-year program tomorrow,” Deputy Interior Secretary Tommy Beaudreau said in response to questions from Sen. Bill Cassidy (R-La.) during a Senate hearing Thursday.
“The program is definitely informed by the IRA and the connection that the IRA makes between offshore oil and gas leasing and renewable energy leasing,” he added, referring to the Democrats’ Inflation Reduction Act.
The Interior Department can’t sell the rights to drill for oil and gas offshore without first publishing a schedule that outlines its plans.
The Inflation Reduction Act is the name of the Democrats’ signature climate, tax and health care bill. To win support from Sen. Joe Manchin (D-W.Va.), a key swing vote, provisions were added that tied the future of offshore wind to the future of offshore drilling.
Specifically, the bill said that to hold an auction for offshore wind rights, an auction has to have been held for offshore oil and gas rights in the past year.
Prior to the bill’s passage, the Interior Department released a draft plan last year that did not say how many auctions the federal government would have for rights to drill offshore. The draft plan said it may have as few as no lease sales or as many as 11.
While he did not elaborate, Beaudreau’s comments about the plan being informed by that legislation make the possibility of no lease sales unlikely.
Exclusive-Biden's 5-year offshore oil plan to have just three auctions - sources
Updated Thu, September 28, 2023
FILE PHOTO: A massive drilling derrick is pictured on BP's Thunder Horse Oil Platform in the Gulf of Mexico
By Jarrett Renshaw and Nichola Groom
(Reuters) -The Biden administration's five-year plan for offshore oil and gas leasing will not include any sales in 2024 and will feature just three in the final four years, the lowest number of auctions in the history of the program, according to three sources familiar with the matter.
The plan is almost certain to disappoint both environmental groups and oil companies. In recent years, politicians, environmentalists and the oil industry have cast the national leasing program as a symbol of either the need to rein in fossil fuel development to avert the worst impacts of climate change or as a critical tool to shore up domestic energy supplies and keep pump prices low.
Since 1992, no five-year plan has had fewer than 11 lease sales and most have had 15 to 20, according to data from the Bureau of Ocean Energy Management.
The schedule for leasing in the Gulf of Mexico and Alaska for 2024-2028 is due on Friday following several delays and months of battling between environmentalists and drilling advocates over what the policy should look like.
The final plan will mark a dramatic reduction from a proposal the Trump administration had crafted in 2018 that envisioned 47 lease sales, including in California and the Atlantic.
It will, however, fall short of U.S. President Joe Biden's campaign promise to end new federal drilling entirely to fight climate change, after court decisions required continued leasing and last year's Inflation Reduction Act made them a pre-requisite for new offshore wind power lease auctions.
The White House is expected to argue on Friday that holding oil lease sales is the price to pay if it wants to achieve its ambitious wind energy goals.
"The administration heard from the offshore wind industry that they need the IRA leasing mandates to be fulfilled to enable the U.S. offshore wind energy to continue to grow," a source familiar with the plan told Reuters.
Biden sees offshore wind power as a key tool in his administration's effort to decarbonize the economy.
"The number of oil and gas lease sales will be the lowest in history and will enable the rapid expansion of the offshore wind industry," the source said.
The Interior Department is required by law to create a national oil and gas leasing schedule every five years. It has been without one since the previous one expired in June 2022 due to heated debate over the program.
The Biden administration unveiled a proposed plan in July last year that had contemplated between zero to 11 lease sales.
The plan will be subject to a 60-day waiting period before it can be approved by Interior Secretary Deb Haaland.
(Reporting By Jarrett Renshaw and Nichola GroomEditing by Marguerita Choy, David Gregorio and Deepa Babington)
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