Editorial: Get on with it
The Biden administration last month proposed a 5-year offshore oil and gas leasing program for 2023-28 that would allow for up to 10 lease sales in the Gulf of Mexico (GOM) and one in Alaska’s Cook Inlet. The GOM program area would include waters offshore Texas, Louisiana, Mississippi, and Alabama. The Cook Inlet program area is in its northern portion.
The US Department of Interior left open the possibility that the final 5-year program could include no lease sales at all, pending results of a 90-day comment period that expires Oct. 6, 2022. The move was viewed by both supporters of continued fossil fuel development and its opponents as a continuation of the prevarication that has so far been the hallmark of Pres. Biden’s policies in the area and frustrated each accordingly.
Interior Secretary Deb Haaland didn’t help the situation when she noted that “from Day One, President Biden and I have made clear our commitment to transition to a clean energy economy. Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing. The time for the public to weigh in on our future is now.”
Except for the fact that it’s required, the purpose of such a straw poll at this juncture is illusory at best. On the campaign trail Biden had stated plainly that there would be no new leases once he was in office. He got elected on that basis, so why ask again? And what if citizens upset by high prices and believing that lease sales could help lower them carried the day? Would 11 sales be scheduled? Probably not.
In response, industry insisted that anything less than the maximum two GOM lease sales/year proposed would have serious impacts on both domestic production and long-term investment. Opponents of oil and gas predicted calamitous outcomes if lease sales continued to be held at all.
The industry has a case to make regarding pent up interest in new leases. Companies participating in since-rescinded Lease Sale 257 placed bids on 308 tracts covering 1.7 million acres, levels not seen since March 2014. Sen. Lisa Murkowski (R-Alas.) has similarly pushed back against suggestions that an absence of interest in Cook Inlet acreage justifies having just one sale there over the next 5 years instead of scheduling one for each year.
Cleaner than most
The Biden administration’s approach to US oil and gas policy so far has been to move as slowly as possible toward whatever it’s legally required to do and then reverse any action it eventually takes. The calculus here must be political. But even then, it’s unsound.
Consultant Wood Mackenzie’s emissions benchmarking tool rates deepwater GOM crude oil production as having the second lowest emissions intensity of current US supply sources, behind only Saudi Arabia and less than half that of Canada. Even assuming sincere interest and progress in moving to net-zero carbon emissions by 2030, the US is going to be using crude oil and the cleaner it is the more reachable such goals will be.
Pres. Biden has three choices in the current situation: stop leasing, continue to dither, or schedule the maximum 11 sales proposed in the new 5-year plan and actually award the leases this time. Each path is fraught with political risk, but only one will allow replacement of dirtier oil with cleaner oil while whatever’s next is being developed.
The right won’t support Biden no matter what. The left will scream bloody murder and perhaps punish Democrats at the voting booth.
But that’s how politics works. And continued fence sitting will produce the same outcome without any benefits.
It’s time to get the sales scheduled.