Thanks to a settlement between environmental groups and the Biden administration due to concerns about the protection of wildlife, millions of acres of federal waters have been blocked off an oil and gas lease sale that was on the horizon.
According to the final notice of Lease Sale 261, which was published late on Wednesday, six million acres were removed from the sale compared to what was initially proposed. The notice was published by the Bureau of Ocean Energy Management, which is a sub-agency of the Department of Interior that manages offshore energy development.
The lease sale in the Gulf of Mexico is scheduled for near the end of September, and is the final planned sale of federal lands for oil and gas projects.
In an interview with Fox News Digital, Erik Milito, the president of the National Ocean Industries Association, said:
“The biggest impact will be on the reduced acreage that is going to be offered in the lease sale. That is a massive amount of highly-prospective acreage that could lead to energy production, especially when you consider that there are producing facilities in the proximity of some of that acreage.”
The decision by the BOEM to not only remove all those acres, but to add other conditions on oil and gas companies that are quite restrictive “poses a real barrier to America’s energy production capabilities, at a time when they’re needed more than ever, with inflation driving up the costs of everything for Americans, including gasoline at the pump.”
The original plan published by the BOEM included 13,620 blocks that spanned 73.4 million total acres. The updated plan includes only 12,395 blocks spanning roughly 67 million total acres.
Industry experts have said that the acreage that was stripped out of the original proposal included tracts that are potentially very rich in oil. Plus, the area in question is right in the middle of the area that’s included in the lease.
When the federal government opens up lease sales for offshore regions that include federal waters, they often include huge swaths of acreage. Companies usually only bid on a fraction of that acreage, though, that they consider to be potentially fruitful.
For instance, back in March, the BOEM put 73.3 million acres up for bid as part of Lease Sale 259. The agency received bids for only 1.6 million of those acres that included 313 tracts, for a grand total of $263.8 million in bids.
As the vice president of upstream policy for the American Petroleum Institute, Holly Hopkins, recently commented:
“With this announcement, the administration is removing approximately 6 million acres of the Gulf of Mexico and adding new and unjustified restrictions on oil and gas vessels operating in this area, amounting to a lease sale in name only.
“Today’s announcement leaves American energy developers in a period of extended uncertainty, with no future offshore lease sales scheduled. This action defies Congress’ mandate in the Inflation Reduction Act, jeopardizes U.S. energy security and violates the Biden administration’s energy obligations to the American people.”