Monthly eNewsletter from the IADC

Joint Upstream Trade Associations’ Continued Call for New U.S. Offshore 5-Year Leasing Plan

As part of a coalition of upstream trade associations, IADC and others continue to voice concerns about the languishing efforts associated with the issuance of the U.S. Department of the Interior’s offshore five-year leasing plan since the previous plan expired in July 2022.

In accordance with 43 USC 1344(a), the Department of the Interior, through the Bureau of Ocean Energy Management (BOEM), is required to prepare and execute an oil and gas leasing program in periods of five-year increments. Such a plan is derived in the interest of balancing a variety of considerations including, but not limited to, environmental concerns, the potential for oil & gas discovery, and the risk to coastal zone areas as stated in the statute. Upon the expiration of the previous plan last July, BOEM failed to have a subsequent plan prepared for issuance to the extent that offshore leasing activities could continue uninterrupted.

In response to BOEM’s inability to issue a timely five-year plan, the U.S. Congress included a legal mandate in the Inflation Reduction Act (IRA) signed into law in August 2022. That legal mandate compelled BOEM to restore lease sale awards not yet issued from the previous five-year plan period (prior to July 2022), while forcing BOEM to reinstate a previously planned Alaskan lease sale, in addition to convening two more Gulf of Mexico lease sales in March and September 2023. As this legal measure was intended to bridge the gap between the previous and subsequent five-year plans, it is a virtual certainty that a gap will once again reappear after September 2023 when the IRA statute will no longer have effect. Further legislative action could be an option to require continued leasing activity on the part of BOEM. However, the message being conveyed to the industry and other stakeholders is that this level of uncertainty will continue to persist in the near-term future of offshore leasing activities on the U.S. Outer Continental Shelf.

IADC and other trade associations continue to collaborate on measures associated with communicating the negative implications of the continued uncertainty resulting from this circumstance. These joint efforts include correspondence with Biden Administration officials, dialogue with U.S. Congressional members, and advocacy among U.S. states and other interested government, industry, and public stakeholders. IADC and the other trades will persist in the objective of achieving the issuance of a new five-year plan as soon as possible so certainty may be restored to U.S. offshore oil and gas development efforts.