BOEM Reinstates More Than 300 Canceled Offshore Oil and Gas Leases
Following through on a provision of the newly-passed Inflation Reduction Act, the U.S. Department of the Interior has validated and approved the results of a contested lease sale it held last November.
On November 17, after a long back-and-forth in court over whether to proceed with Lease Sale 257, the department's Bureau of Ocean Energy Management carried out the auction and took in more than 300 bids totaling some $190 million.
However, an environmental group sued to block the offshore leases from taking effect, accusing BOEM of failing to take climate-related emissions into its considerations. Early this year, a federal judge agreed and ruled that the lease results were invalid.
In midsummer, during the negotiations over the Inflation Reduction Act of 2022 - President Joe Biden's sweeping green-energy funding package - Senate leadership agreed to include a provision that would reinstate the results of Lease Sale 257, regardless of the court decision. The Act passed and was signed into law in August.
BOEM has now carried out that provision and has accepted 307 of the highest valid bids for blocks in the auction. While the lease terms do not include climate-related provisions, BOEM noted that they do require lessees to mitigate effects on protected species and "avoid potential ocean user conflicts."
The Act also requires BOEM to hold regular oil and gas lease auctions going forward as a precondition for any further offshore wind lease auctions.
“This has been a long time coming," said Louisiana Oil & Gas Association President Mike Moncla in a statement. "This lease sale is an important victory, not only for the 250,000+ oil and gas workers in the state but for every American who is facing high energy costs as a result of our diminished oil and gas supply."