On 27 January 2021, The Biden administration released an Executive Order on Tackling the Climate Crisis at Home and Abroad (EO 14008), which places the climate crisis at the center of U.S. foreign policy and national security. Of concern to the oil and gas industry is Sec. 208 Oil and Natural Gas Development on Public Lands and in Offshore Waters, which states, “To the extent consistent with applicable law, the Secretary of the Interior shall pause new oil and natural gas leases on public lands or in offshore waters…”
IADC Action: IADC published a media release titled Federal Leasing Ban Impedes U.S. Economic Growth which addresses EO 14008. IADC President Jason McFarland comments, “The executive actions announced by the Administration today only serve to further curtail the ability of America’s natural gas and oil producers to successfully operate. Formulated with zero consultation from the industry members best positioned to assist the Administration in achieving its goals, these policies threaten thousands of good-paying energy jobs and jeopardize hundreds of millions of dollars in future royalty-based revenue that the industry creates for states and local communities.”
The U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) announced rescinding Record of Decision (ROD) for Gulf of Mexico (GOM) Oil and Gas Lease Sale 257 on 12 February. This decision paused planning for the proposed sale, which had been expected to occur in March 2021.
IADC Action: In response, IADC published a media release titled IADC Comments on Postponement of March Oil and Gas Lease Sales. An included statement from McFarland expresses, “The Bureau’s decision to postpone the planned March lease sale is disappointing and brings further uncertainty to the livelihoods of hundreds of thousands of American energy workers earning a living in Colorado, Montana, New Mexico, Wyoming, and offshore in the Gulf of Mexico.” He continues, “IADC is optimistic that the Bureau will put American energy workers in focus as they implement further policies. We look forward to continued collaboration with BOEM on these important matters.”
The Department of the Interior (DOI) held a virtual forum on oil and gas leasing.
IADC Action: IADC submitted comments on the DOI’s March virtual forum. IADC filed a Freedom of Information Act (FOIA) request for all public comments and emails sent into the DOI in response to its March virtual forum. Over the next 12 months, DOI delayed complete fulfillment of the FOIA, and ended up releasing the documents publicly in April 2022.
A federal judge in Louisiana blocked the Biden administration’s suspension of new oil and gas leases on federal land and water. (Related NPR article)
IADC Action: IADC published a media release titled IADC Comments on Leasing Ban Block. In the release, McFarland states, “IADC is encouraged by the Court’s decision to hold the Department of Interior accountable to well-established Federal law requiring oil and gas lease sales, and urges the Department to move quickly to act on the Court’s determinations.”
IADC Action: IADC published a statement titled IADC Statement on Lease Sale 257. The statement begins: “IADC is disappointed in the Court’s decision regarding Lease Sale 257, and hopes the Department of Interior will move expeditiously to recomplete appropriate environmental evaluations with the goal of holding an additional lease sale soon.”
The U.S. Department of the Interior announced that it will not proceed with plans for three oil and gas lease sales in the Gulf of Mexico and Alaska’s Cook Inlet.
IADC Action: IADC published a media releases titled Decision to Withhold Lease Sales Harmful to Production and Pricing. In the release, McFarland states, “The Biden Administration’s calls for more domestic production and lower prices in the North American market simply do not square with its repeated decisions to cancel, delay, and otherwise make unfeasible, federal oil and gas lease sales. Federal leasing is critical to ensuring increasing production and the continued employment of hundreds of thousands of workers.”
BOEM released an offshore federal leasing Proposed Program (PP) for the 2023-2028 period. The PP proposes as many as 11, or as few as 0, offshore oil and gas lease sales. The maximum of 11 lease sales would consist of 10 sales in the Gulf of Mexico region and 1 in the Alaska region. Final program decisions will be made at a later stage of action. Along with the PP, BOEM published a draft programmatic environmental impact statement (PEIS). The PP and draft PEIS were released with a public comment period of 90 days, ending on 6 October 2022.
IADC Action: In response, IADC formed a working group of offshore members and outside counsel to begin formulation of IADC comments and a joint member-company letter to BOEM highlighting concerns and suggestions. Comments and a letter will be submitted prior to the deadline of 6 October.
Most Recent Update – IADC Joins Trade Associations in Letter to BOEM
On 16 August, President Joe Biden signed the Inflation Reduction Act (IRA) into law. While appearing to mandate the holding of lease sales 258, 259, and 261, it is not yet clear how the legislation supersedes, if at all, present legal action being taken against the Administration’s de facto leasing ban. The IRA also mandates that BOEM reinstate the previously rescinded Lease Sale 257 and award the leases to the highest bidders, as originally intended, by 15 September 2022.
IADC Action: In response to lack of communication on part of BOEM to the industry regarding details of the sale and fear of additional delay, IADC and 5 other organizations sent a joint trades letter to BOEM concerning Lease Sale 257. The letter was sent to BOEM Director Amanda Lefton and Principal Deputy Assistant Secretary Laura Daniel-Davis on 30 August 2022. In the letter, the contributing parties collectively express concern for the quickly-approaching 15 September deadline by which the Secretary is required to “provide the appropriate lease form to the winning bidder to execute and return.” The letter goes on to say: “With only two weeks remaining, we respectfully request written communication from BOEM to operators on the process and timing for providing the lease forms to the high bidders, which would provide needed clarity and serve to alleviate concerns that there may be a delay in BOEM meeting its obligations under the new law.”