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Biden Administration Holds Biggest Offshore Lease Auction Since 2014

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Chevron was one of the biggest winners of Wednesday's auction (file image courtesy Chevron)

Published Nov 18, 2021 11:29 PM by The Maritime Executive

On Wednesday, the Biden administration auctioned off 308 oil and gas leases totaling 1.7 million acres in the U.S. Gulf of Mexico, bringing in $190 million in revenue. By one measure, it was the biggest single sale since oil prices peaked in 2014.

While campaigning for office, then-nominee Joe Biden promised to suspend lease sales on federal lands and offshore waters. Once he took office, he quickly ordered the Department of the Interior to follow through, including the suspension of a previously-planned Gulf of Mexico lease sale. However, a court order forced the administration to reverse course. 

In March, 12 oil and gas-producing states sued the Department of the Interior to require it to resume lease sales. The states argued that the White House's decree had not followed appropriate steps for executive branch policymaking, like the requirement for a public comment period. In June, a judge in the U.S. District Court for the Western District of Louisiana issued a preliminary injunction ordering that the sale must go forward. 

The Department of the Interior is still appealing the court's decision, but it decided to obey the injunction and move forward with the lease sale pending the outcome of the suit.

"The Biden-Harris administration is continuing its comprehensive review of its offshore and onshore oil and gas leasing programs and initiating reforms," Interior's Bureau of Ocean Energy Management (BOEM) said in a statement. "Moving forward, BOEM will use updated greenhouse gas emission models to take substitution impacts and foreign oil consumption into account, resulting in the most robust projections ever of the climate impacts of offshore lease sales."

The oil and gas association American Petroleum Institute (API) celebrated the sale as a success for American energy producers.

"U.S. oil and natural gas production on federal lands and waters delivers the affordable and reliable energy America needs while providing much-needed funding for conservation, education and infrastructure," said API Senior Vice President Frank Macchiarola.

Environmental activists expressed displeasure, noting that the president had just returned from the COP26 conference in Scotland, where he had encouraged other nations to increase their climate commitments. Earthjustice, the Sierra Club, Friends of the Earth and other leading environmental nonprofits are suing the administration to reverse the sale. 

"The [lease sale decision] is based on unlawful analysis that ignores climate change and the serious environmental injustice posed to the Gulf’s frontline communities," said Hallie Templeton, legal director for Friends of the Earth. "We are left aghast that the administration has ignored its clear authority to defer the sale and our final hope lies with the federal court to remedy these violations."