U.S. Department of Interior narrows Gulf of Mexico oil lease sale
The Biden administration recently released the final details of just one upcoming offshore oil lease sale that would reduce the number of federal acres available for oil and gas development following the settlement of a lawsuit with environmental groups.
Known as Lease Sale 261, it would put up for consideration 67 million acres of federal waters in the Gulf of Mexico in an auction on 27 September, according to an announcement by the Interior Department’s Bureau of Ocean Energy Management (BOEM). That’s down from the 73 million acres that BOEM offered at its previous Gulf lease sale in March.
The Department extended protections over some areas of the Gulf as part of a deal the Biden administration made with environmental groups to settle a lawsuit. A National Marine Fisheries Service review in 2020 found that the habitat of the endangered Rice’s whale in the Gulf of Mexico was larger than previously known, prompting the Biden administration in the settlement to expand protections into the newly discovered area and to take it out of consideration for oil and gas drilling. This decision circumvents legal requirements and the public process, imposing unwarranted restrictions on U.S. energy production.
According to the U.S. Energy Information Administration, the Gulf of Mexico federal offshore oil production accounts for 15% of total U.S. crude oil production, and federal offshore natural gas production in the Gulf accounts for 5% of total U.S. dry production.
Over 47% of total U.S. petroleum refining capacity is located along the Gulf coast, as well as 51% of total U.S. natural gas processing plant capacity. The U.S. Gulf of Mexico accounts for some of the lowest carbon-intensive production of oil and gas anywhere in the world. Constrained activity in this basin could encourage increased production from regions where environmental considerations are not as robust.
This announcement leaves American energy developers in a period of extended uncertainty, with no future offshore lease sales scheduled.