A Senate committee once again heard testimony about problems created by the moratorium on federal oil and gas leasing, this time with a focus on the offshore, but the senators came no closer to eliciting clarity on when the moratorium will end.
Amanda Lefton, director of the Interior Department’s Bureau of Ocean Energy Management (BOEM), said the administration has no termination date for the “pause” in federal leasing. The moratorium was ordered by President Biden to occur while Interior conducts a comprehensive review of leasing policy.
Interior will issue an interim report in the early summer on the policy review and at that time will also release information on next steps to be taken, Lefton told the Senate Energy and Natural Resources Committee.
The hearing was preceded by a committee vote of 18-1 to advance the nomination of Tommy Beaudreau to be Interior deputy secretary. Beaudreau was BOEM director under President Obama and draws much respect from both sides of the aisle.
The view from Louisiana
The committee hearing especially heard a Democratic governor, Louisiana’s John Bel Edwards, describe the importance of the oil and gas industry to his state. He urged that leasing in federal Gulf of Mexico waters resume by the third quarter.
Except for his support for oil and gas development, Edwards pushed many political buttons currently popular within his own party. He described Louisiana as a state suffering from climate change and cited last year’s hurricanes crossing Louisiana as an example. He stressed devotion to environmental restoration and expressed hope for offshore wind energy, and he lamented the environmental degradation of oil and gas pipelines in Louisiana wetlands.
But his comments came back to the value of oil and gas when encouraged by Sens. Bill Cassidy (R-La.) and John Barrasso (R-Wyo.).
About 250,000 Louisianans are employed by the oil and gas industry or the service companies that help support the industry, Edwards said. The industry accounts for 26% of the state’s gross domestic product, he said.
The share prices of oil and gas companies were hit within half an hour of Biden’s announcement of the moratorium, according to the governor. Investors need predictability and don’t have that with a pause of unknown duration, he said.
The effect of the moratorium—even though it does not apply to existing leases—deters investment, testified Michael Minarovic, chief executive of Arena Energy LLC, which works on offshore projects in the Gulf of Mexico.
A deepwater project can cause $100 million to get started and potentially $1 billion for full development, Minarovic told senators. Investors are less likely to want to commit to such projects when there is so much uncertainty about federal policy, he said.
