Posted on January 3, 2024
The Biden administration drew in a record amount from its offshore oil lease auction in December, Axios reported on Tuesday.
The U.S. government made $382 million in revenue – the largest amount in eight years – from the Department of Interior’s Dec. 20 auction of offshore oil drilling leases in the Gulf of Mexico, according to Axios. Companies were more eager to purchase leases because the Dec. 20 action was the last sale until 2025, amid a broader effort by the Biden administration to scale back offshore drilling.
Major companies including Chevron, Hess Corp., Woodside Energy and Anadarko were among the highest bidders for the leases, according to Axios. Though it is the largest recorded sale of offshore drilling leases in nearly a decade, it is still a notably smaller figure than the multi-billion dollar deals recorded prior to 2015, before the surge of shale-sourced energy.
Additionally, “higher costs and a tough regulatory environment will create barriers to entry in addition to the long time between bids and first oil production,” Capital Alpha Partners said in a statement to Axios. The Biden administration has made it more difficult to obtain offshore leases in a bid to increase the production of renewable energy.
The administration spent months trying to cancel the Dec. 20 auction but was obligated to hold it after a circuit court upheld a congressional mandate in November. President Joe Biden said in August 2023 that he “wanted to stop all drilling” but was legally unable to do so.
Under the Biden administration, only three offshore oil drilling lease auctions will be held through 2029, raising concerns from industry and advocacy groups that the U.S. is becoming more reliant on foreign-sourced energy, thereby decreasing American energy independence and security.
“The administration has not only been unwilling to endorse policies promoting Gulf of Mexico oil and gas production, but it has actively pursued measures discouraging domestic offshore energy production,” National Ocean Industries Association President Erik Milito said in a statement in December 2023. “In future years without scheduled lease sales, we remain concerned about the potential shift of investment away from the U.S. to energy projects around the world.”
The White House did not immediately respond to a request for comment.
