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Biden calls for up to 3 offshore oil leases in Gulf of Mexico, upsetting both sides

This April 10, 2011, file photo, shows a rig and supply vessel in the Gulf of Mexico, off the coast of Louisiana. The Biden administration has proposed up to three oil and gas lease sales in the Gulf of Mexico over the next five years.
Gerald Herbert
This April 10, 2011, file photo, shows a rig and supply vessel in the Gulf of Mexico, off the coast of Louisiana. The Biden administration has proposed up to three oil and gas lease sales in the Gulf of Mexico over the next five years.

WASHINGTON — President Joe Biden's administration on Friday proposed up to three oil and gas lease sales in the Gulf of Mexico but none in Alaska as it tries to navigate between energy companies seeking greater oil and gas production and environmental activists who want Biden to shut down new offshore drilling in the fight against climate change.

The five-year plan includes proposed sales in the Gulf of Mexico, the nation's primary offshore source of oil and gas, in 2025, 2027 and 2029. The three lease sales are the minimum number the Democratic administration could legally offer if it wants to continue expanding offshore wind development.

Under the terms of a 2022 climate law, the government must offer at least 60 million acres of offshore oil and gas leases in any one-year period before it can offer offshore wind leases.

The provision tying offshore wind to oil and gas production was added by Democratic Sen. Joe Manchin of West Virginia, a top recipient of oil and gas donations and a key vote in favor of the climate law, which was approved with only Democratic votes in the House and the Senate. The landmark law, the Inflation Reduction Act, was signed by Biden as a key step to fight climate change but includes a number of provisions authored by Manchin, a centrist who represents an energy-producing state.

For instance, if the Biden administration wants to expand solar and wind power on public lands, it must offer new oil and gas leases first.

"The Biden-Harris administration is committed to building a clean energy future that ensures America's energy independence," Interior Secretary Deb Haaland said in a statement. The proposed offshore leasing program "represents the smallest number of oil and gas lease sales in history" and "sets a course for (the Interior Department) to support the growing offshore wind industry," she said.

The lease program will guard against environmental damage caused by oil and gas drilling and other adverse impacts to coastal communities, Haaland said.

The sales would increase climate-changing greenhouse gas emissions, according to a 300-page environmental review by the Interior Department's Bureau of Ocean Energy Management. How much they will increase is uncertain because the review considered five or 10 new sales but not the three sales proposed.

Manchin sharply criticized the administration's announcement and said limiting oil and gas sales would result in fewer renewable energy leases under the terms of the climate law.

"You can't have one without the other," he said. "It makes no sense at all to actively be limiting our energy production."

Still, the plan allows drillers such as Chevron, BP and ExxonMobil to participate in as many as three oil and gas auctions over the next five years, a top priority for the industry that could lock in decades of offshore oil and gas production.

The plan goes against Biden's campaign promise to end new offshore drilling and could become a political liability for the Democratic president, who already faces sharp opposition from environmental groups angry at his decision earlier this year to approve ConocoPhillips' massive Willow oil project in Alaska.

ConocoPhillips CEO Ryan Lance called Willow "the right decision for Alaska and our nation." But environmental groups call the $8 billion project a "carbon bomb" that would betray Biden's pledge to cut planet-warming greenhouse gas emissions in half by 2030. Opponents mounted a #StopWillow campaign on social media that has been seen hundreds of millions of times.

Interior Deputy Secretary Tommy Beaudreau appeared to acknowledge the contradiction on Thursday, telling a Senate hearing the administration's options were limited by the climate law.

"The (oil leasing) program is definitely informed by the IRA and the connection that the IRA makes between offshore oil and gas leasing and renewable energy leasing," he said, referring to the Inflation Reduction Act.

The Interior Department can't sell the rights to drill for oil and gas offshore without first publishing a schedule that outlines its plans. The administration faced a Saturday deadline to release the five-year plan.

Two or more sales have been held most years over the past several decades under the federal offshore leasing program, which was established in the 1950s. While Friday's decision means fewer sales, it will take years for that to impact oil production because companies can take up to 15 years to start drilling once a lease is awarded, said energy analyst Rene Santos, of S&P Global Commodity Insights.

Over the long term, Santos said, that could help drive companies to other countries, such as Guyana, where the government is more open to drilling.

Environmentalists said the leasing will worsen climate change impacts and leave coastal communities exposed to spills that occur regularly in the Gulf of Mexico.

Any individual sales held under the proposal will likely face legal challenges from groups such as Earthjustice. The law firm's president, Abigail Dillen, said Friday that the new plan represented a missed opportunity.

"We will continue to work alongside Gulf Coast communities to challenge new leasing and transition beyond a fossil economy that is poisoning people and driving climate change," Dillen said in a statement.

The oil industry and its allies have called for more leasing, not less.

The American Petroleum Institute, the top lobbying group for the oil and gas industry, said Biden was "choosing failed energy policies that are adding to the pain Americans are feeling at the pump.''

"This restrictive offshore leasing program is the latest tactic in a coordinated strategy to reduce energy production, limiting consumers' access to affordable reliable energy,'' API CEO Mike Sommers said.

At the last lease sale, in March, companies including Chevron, BP and ExxonMobil bid $264 million for drilling rights in the Gulf, a sharp rise from the previous auction in 2021.

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