Trade groups encouraged by US offshore lease nod

Industry trade groups expressed praise August 31 for a federal decision to move forward with a lease for drilling for oil and gas in territorial waters.

US president Joe Biden, in one of his first acts of office, put a pause on new drilling for oil and gas on federal lands, pending further review. A court in Louisiana later found the ban would harm state economies and ruled against the moratorium.

The US Interior Department on August 31 said it would now move forward with a lease for drilling rights in the Gulf of Mexico.

“The department has determined to move forward with the process for Gulf of Mexico (GOM) Lease Sale 257, consistent with the [interior] secretary’s authorities and discretion under applicable law,” it said.

The decision earned praise from the American Petroleum Institute, a trade group that sued the government over the drilling decision.

“We are encouraged that the Interior Department appears to be taking the first steps toward following part of the court’s order to resume federal oil and natural gas leasing, and we look forward to hearing more details on the administration’s plans for both onshore and offshore lease sales as directed,” API vice president of upstream policy Kevin O’Scannlain said in response to questions emailed by NGW.

While fluid from year-to-year, offshore crude oil production has been on the rise at least since the 1990s. Offshore natural gas production, however, has experienced steady declines.

Environmental advocates argued the Biden administration is abandoning some of its climate goals by catering to the oil and gas industry. Erik Milito, the president of the National Ocean Industries Association, claimed that logic was skewed.

“We provide a low carbon energy alternative to oil produced by foreign, higher emitting producers, like Russia and China,” he said in a statement.

The pause related only to new drilling, not activity from previous lease sales. Previous statements from the Interior Department suggest the offshore lease will take place as early as this month. The government later this fall will issue and take comments related to a draft environmental impact statement for a potential lease sale in the Cook Inlet off Alaska.