Gulf of Mexico Lease Sale Brings In $382 Million
The Bureau of Ocean Energy Management (BOEM) has completed a controversial lease sale in the Gulf of Mexico, raking in $382 million in exchange for E&P rights covering 1.7 million acres of federal waters. 26 companies joined in the bidding, a strong showing reflecting elevated oil prices and a positive outlook in the energy market.
As required by a ruling from the U.S. 5th Circuit Court of Appeals, BOEM included lease blocks in areas believed to be possible habitat for the endangered Rice's whale. An estimated 50 individuals remain, and scientists and conservationists have warned that it which could become the first whale species ever extinguished by human activity. BOEM had attempted to exclude suspected habitat zones from the lease sale and to impose transit restrictions on marine traffic through sensitive areas, but it retreated from these proposals after legal pressure from the American Petroleum Institute and the state of Louisiana.
The lease sale was effectively required by Senator Joe Manchin's amendments to the Inflation Reduction Act. The Act made future offshore wind leases contingent on the continuation of oil and gas lease auctions. Offshore wind leases are a top priority for the Biden administration, and the White House has proceeded with both.
“Each additional oil and gas lease sale makes it harder to achieve the ambitious goals we need to achieve to stave off climate catastrophe," said Sierra Club spokesman Athan Manuel in a statement. "2023 will likely be the hottest year on record. At this critical moment, we should be expanding clean energy, not locking ourselves into fossil fuel for decades."
U.S. Senator Bill Cassidy (R-LA) hailed the lease sale as a long-overdue success.
“The strong showing in today’s sale sends a signal that industry is optimistic about the future of energy production in the Gulf,” said Sen. Cassidy. “It’s a win that this sale took place after years of slow-walking by the Biden administration. This should be motivation to hold more sales, not fewer."