Interior Department moves forward with oil and gas drill site leasing

By David Jordan | CQ-Roll Call

WASHINGTON — In order to comply with provisions of the Climate, Tax and Healthcare Act signed in August, the Department of the Interior announced Thursday that it will press ahead with onshore and offshore oil and gas lease sales on federal lands and waters.

At the request of Senate Energy and Natural Resources Chairman Joe Manchin III, DW.Va. , the law included provisions obligating the Ministry of Interior to conduct external leases it had previously rescinded and specifying that land could only be leased for renewable energy development if certain tracts of land were offered for oil and natural gas leases.

For internal leases, the Office of Land Management will begin to scope its next sales in New Mexico and Wyoming “under a strategy that includes internal lease sales consistent with the terms of the law,” which includes changes such as increasing the minimum royalty rate, assessing expressions of interest filing fees and eliminating non-competitive leasing .

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

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

The Biden administration did not finalize the new offshore oil and gas lease program before the previous program expired 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 Ramsay, API’s vice president of exploration and production policy, said on a call with reporters that the move was a welcome announcement “but it still doesn’t replace a definitive five-year program.”

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

API, the National Oceanic Industry Association and other industry groups encouraged the Biden administration to finalize a plan that included all eleven lease sales in order to reduce dependence on foreign oil. The Organization of the Petroleum Exporting Countries said on Wednesday it would cut production by 2 million barrels per day starting in November despite calls from the Biden administration.

“Yesterday’s OPEC+ announcement is just another example of why we need to continue and increase US energy production,” said Christopher Gith, senior vice president for policy at the US Chamber of Commerce’s Global Energy Institute. “We must reduce dependence on foreign energy sources and we must support 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 make good on his campaign pledge to end federal oil and gas leases. Groups including Oceana and Healthy Gulf planned to protest outside the White House on Thursday, calling on the administration to finalize a program that will not allow any new rentals.

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