August 9, 2022

The Oil Industry and Environmentalists Reject Biden’s Proposal for Offshore Drilling

5 min read
The oil industry and environmentalists reject Biden's proposal for offshore drilling

THE NEW ORLEANS — Up to 10 oil and gas lease sales in the Gulf of Mexico and one off the coast of Alaska have been proposed by President Joe Biden’s administration over the next five years, contradicting Democratic climate pledges but scaling back a Trump administration plan that called for dozens of offshore drilling opportunities, including in undeveloped areas.

Deb Haaland, secretary of the interior, stated that less than 11 lease auctions, or maybe none at all, may take place before a final decision is made. After being taken into consideration under Trump, new drilling off the Atlantic and Pacific coasts would be prohibited.

We’ve been very clear about our commitment to moving toward a sustainable energy economy, President Biden and I. According to Haaland, whose organisation is in charge of regulating drilling on federal lands and waterways, “today we put forward an opportunity for the American people to…provide feedback on the future of offshore oil and gas leasing.”

The proposal immediately drew criticism from both environmentalists, who charged Biden with undermining the fight against climate change, and representatives of the oil business and their allies, who claimed it would do little to reduce high energy prices.

In addition to making life difficult for commuters and a political burden for Biden’s fellow Democrats heading into the midterm elections, gas prices on Friday averaged $4.84 a gallon. The White House is now looking for ideas, including Biden’s request last week to suspend the federal 18.4 cents per gallon gas tax.

The oil industry and environmentalists reject Biden's proposal for offshore drilling

Due to worries about the climate, the Interior Department had put a halt on lease sales as of late January. However, a U.S. district judge in Louisiana ordered a restart of the sales.

When the Biden administration postponed the final scheduled lease sales in the Gulf of Mexico and Alaska during the previous offshore leasing cycle, it cited contradictory court decisions regarding that choice. On Thursday, the previous five-year cycle, a policy enacted under the previous president Barack Obama, came to an end.

Before a new strategy can be implemented, there will be a month-long pause. According to the oil industry and its friends, the delay might make it difficult to plan for future drilling and could even result in a drop in oil production.

According to Frank Macchiarola, senior vice president of the American Petroleum Institute, the leading lobbying organisation for the industry, there probably won’t be an offshore lease sale until far into the following year.

Additionally, he claimed that administration representatives “went out of their way to indicate” that there might not even be any lease sales.

He reiterated a long-standing argument made by Republicans and members of the oil business that a lack of supply is a major factor in high prices and that the government must demonstrate to the world’s oil markets that it is serious about doing so in the long run.

As the economy recovers from the pandemic and feels the impacts of Russia’s invasion of Ukraine,

JOE Biden has recently lambasted oil companies and refiners for maximising profits and making “more money than God” rather than expanding production in response to increased prices.

Environmentalists and other Democrats who supported then-candidate Biden after he pledged to stop new drilling in public lands and seas were deeply disappointed by the leasing announcement.

The plan comes a day after the administration launched its first onshore lease sales, bringing in $22 million in an auction that grants energy corporations the right to drill on land covering about 110 square miles (285 square kilometres) across seven western states. Despite the administration’s own estimates that using the oil and gas from the parcels could result in billion-dollar future climate damages, sales continued.The oil industry and environmentalists reject Biden's proposal for offshore drilling

“Our public lands and rivers already account for about a fifth of the nation’s annual carbon pollution. It makes no sense to add any additional lease sales to that equation as the climate disaster plays out all around us, according to Raul Grijalva, chairman of the House Natural Resources Committee, a Democrat from Arizona.

The lease-sale plan is “a tremendous setback for Gulf inhabitants, American energy policy, and the world climate,” according to Cynthia Sartou, executive director of the environmental charity Healthy Gulf.

The Senate energy committee’s moderate Democratic chair, Joe Manchin, praised the plan as an opportunity to “get our leasing programme back on track.”

The West Virginia lawmaker claimed that the Interior Department had not held a successful offshore lease sale since November 2020 “while Americans everywhere are suffering from record-high gas prices and disruptions in the global oil market caused by Russian leader Vladimir Putin‘s senseless war in Ukraine.”

Interior Department officials have planned 47 sales during the Trump administration, including nine sales off the Atlantic coast, 12 in the Gulf of Mexico, and 19 in Alaska. Prior to the proposal’s completion, Trump lost the 2020 election.

Obama instituted the current method of hosting Gulf-wide sales due to waning interest in offshore leases. There had been decades of regional sales before that.

Following the public comment process that begins on Friday, which will last 90 days, a final plan must be filed 60 days before it becomes effective.

In November, the government staged an offshore lease auction in the Gulf of Mexico, attracting bids totalling $192 million. Before the leases were issued, a judge cancelled that deal.

Haaland previously stated that the industry is “set” with the number of drilling licences it has on hand and in storage. She stated in her testimony at a House hearing in April that the sector has around 9,000 granted permits that are not being used.

Although it has increased as the economy has recovered from the slowdown caused by the coronavirus, oil output is still below pre-pandemic levels. Energy companies have been hesitant to increase production further, citing a lack of personnel and investor caution over the short-term sustainability of the current high pricing.

Major oil firms announced soaring first-quarter earnings and paid out tens of billions in dividends to shareholders.

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