US Energy Policy at ‘Critical Point’ After Biden Admin Sells Last Offshore Lease Sale for Years: Group

President Joe Biden speaks during a virtual Major Economies Forum on Energy and Climate at the South Court Auditorium at Eisenhower Executive Office Building June 17, 2022, in Washington. Alex Wong/Getty Images

U.S. energy policy is now at a “critical point” because the conclusion of an offshore lease sale in the Gulf of Mexico on Dec. 20 marks the final such sale until at least 2025 amid the Biden administration’s war on fossil fuels, an industry group is warning.

Following a ruling from the U.S. Court of Appeals for the 5th Circuit that required the Biden administration to include lease blocks that were previously excluded because of potential effects on whale populations in the Gulf of Mexico, the Bureau of Ocean Energy Management on Dec. 20 held the Gulf of Mexico oil and gas Lease Sale 261.

The lease sale was noteworthy in light of President Joe Biden’s 2020 campaign pledge to end oil and gas leasing on public lands and waters—and because environmental groups objected because of the potential negative effect on the habitat of the Rice’s whale, a critically endangered species.

Lease Sale 261 is the last that will be offered by the Biden administration until 2025—along with the fact that a maximum of only three leases will be sold through 2029.

An oil and gas drilling platform stands offshore near Dauphin Island, Ala., in the Gulf of Mexico on Oct. 5, 2013. Steve Nesius/Reuters

‘Critical Point’

Erik Milito, president of the National Ocean Industries Association, an industry group that represents both traditional and renewable offshore energy producers, said the Biden administration has been actively pursuing measures to discourage domestic offshore energy production, undermining U.S. jobs and national security.

“Today signifies a critical point in American energy policy,” Mr. Milito said in a statement in response to the conclusion of Lease Sale 261.

“The U.S. offshore oil and gas industry is stepping up and making the investments vital to enhance our energy, economic, and national security for decades to come.”

He noted that the Biden administration’s fossil fuel crackdown is leading to “significant and unnecessary uncertainty” about the production of resources that are crucial for the U.S. economy.

“Over the past three years, the administration has followed its stated agenda of restricting offshore energy development with tangible actions that include leasing pauses, sale cancellations, permit delays for geophysical research, and arbitrary restrictions related to the Rice’s whale. Potential future actions by the administration could introduce further unwarranted delays or obstacles to domestic energy production,” Mr. Milito said.

“Without opportunities for investment in new leasing, we are concerned that American jobs, American energy production, our national security, and environmental progress will be at risk.”

He warned that, unless Congress steps in, Lease Sale 261 will be the last until 2025. He said unless the Biden administration schedules more sales, there could be a shift of investment away from the United States to energy projects in other parts of the world, pushing up energy costs for Americans.

“Given recent political dynamics and actions, such complications are well within the realm of possibility and should be of concern to all Americans continuing to grapple with the high costs of inflation,” Mr. Milito said.

‘Climate Catastrophe’

By contrast, the Sierra Club sounded the alarm on “climate catastrophe” and stated that each additional oil and gas lease sale undermines the activist goal of ending fossil fuels for good.

“Each additional oil and gas lease sale makes it harder to achieve the ambitious goals we need to achieve to stave off climate catastrophe,” Athan Manuel, the Sierra Club’s lands protection program director, said in a statement. “At this critical moment, we should be expanding clean energy, not locking ourselves into fossil fuel for decades.

“We once again call on the Biden Administration to take the bold action we need and end new oil and gas leasing on public lands and waters.”

The Sierra Club was one of the plaintiffs in a lawsuit filed in 2020 by environmental law organization Earthjustice that challenged a Trump-era biological opinion on oil and gas activities in the Gulf of Mexico. The groups argued that the legally binding opinion failed to require enough safeguards for species that include the endangered Rice’s whale.

Rice’s whale is one of the most endangered marine mammal species on the planet, with an estimated population of just 51, about 100 scientists told the Biden administration in an open letter last year.

In August, the Biden administration settled with environmental groups and agreed to block off millions of acres from Lease Sale 261.

At the time, environmental groups praised the exclusions, while representatives of the oil and gas industry called the carveouts “unfounded” and said the restrictions would needlessly hamper domestic energy production.

But that exclusion was challenged in court, and in September, a federal judge struck down the carveouts, ordering the Biden administration to expand the sale of the Gulf of Mexico oil leases.

The Department of the Interior said on Sept. 29 that it would offer a “maximum of three potential oil and gas lease sales” in the Gulf of Mexico region, scheduled in 2025, 2027, and 2029.

The Trump administration had planned to hold 47 offshore lease sales from 2022 to 2027.