BOEM rescinds offshore lease sale scheduled for March

Feb. 15, 2021
The Interior Department has rescinded the record of decision it has issued for an offshore oil and gas lease sale scheduled for March.

The Interior Department has rescinded the record of decision it has issued for an offshore oil and gas lease sale scheduled for March.

The Bureau of Ocean Management (BOEM) said it was rescinding the record of decision for Lease Sale 257 to comply with President Biden’s executive order establishing a moratorium on federal oil and gas leasing, both onshore and offshore.

Biden’s moratorium, under Executive Order 14008, required an indefinite halt to leasing while the new administration conducts a comprehensive review of oil and gas policy (OGJ Online, Jan. 27, 2021). No date was set for completion of the review.

Erik Milito, president of the National Ocean Industries Association, issued a statement expressing hope that Lease Sale 257 will be held after the policy review is completed.

“Pursuant to the Outer Continental Shelf Lands Act, Interior completed multiple environmental reviews and specifically considered the climate impacts in 2016 during the Obama administration,” Milito said.

“The Obama Administration review of the 2017-2022 Five Year Plan for offshore oil and gas leasing determined GHG emissions would be higher without these lease sales because energy production would be outsourced to foreign countries resulting in a higher carbon footprint,” Milito said, referring to greenhouse gas emissions that can contribute to climate change.

The oil industry may not be overly troubled if the lease sale is delayed only a short time, especially given the financial constraints companies are enduring because of the pandemic. Lease Sale 256 was delayed in 2020 from August to November to allow time for additional analysis of oil and gas markets in light of the pandemic (OGJ Online, Nov. 18, 2020).

The concern may be focused more on questions hanging over long-term policy. Jason McFarland, president of the International Association of Drilling Contractors, issued a statement expressing his disappointment and saying the BOEM decision “brings further uncertainty to the livelihoods of hundreds of thousands of American energy workers.”