Posted on July 5, 2022
The Biden administration is expected to propose a five-year plan for new offshore oil and gas leases in federal waters by Thursday — and potentially as soon as today.
The long-awaited plan comes as the administration tries to balance its ambitious climate agenda with combatting high gasoline prices that imperil Democrats’ chances in the midterm elections. It could ban any new drilling, or it could allow new drilling in some parts of the Gulf of Mexico or the Arctic.
The fossil fuel industry has urged the administration to boost offshore drilling to ease Americans’ pain at the pump. However, environmentalists argue that new lease sales would do nothing to offset high gas prices in the near term while exacerbating the climate crisis in the long term.
Under the Outer Continental Shelf Lands Act, the Interior Department is required to release a plan for new offshore lease sales every five years. Interior Secretary Deb Haaland told the Senate Energy and Natural Resources Committee in May that a draft of the plan would be available by June 30.
Here’s what we’re watching before the plan’s imminent release:
More leasing might not lower gas prices
A temporary pause in new offshore oil and gas leasing would have minimal impact on gas prices for consumers, according to a report shared exclusively with The Climate 202 before its release Wednesday.
- A temporary leasing pause would result in less than a penny-per-gallon increase in prices at the pump over the next 19 years, according to the research, which was commissioned by Earthjustice, Healthy Gulf and theGulf Coast Center for Law & Policy and conducted by Apogee Economics and Policy.
- In addition, a permanent end to issuing new federal offshore oil and gas leases would result in a 1-to-2-cents-per-gallon difference in gas prices over the next 30 years, the research found.
“Eliminating new oil and gas leases wouldn’t meaningfully impact energy prices by 2030, which is a critical deadline for decreasing production to meet climate goals,” Kendall Dix, national policy director at the Gulf Coast Center for Law & Policy, told The Climate 202.
The report sought to refute a March analysis commissioned by the American Petroleum Institute and the National Ocean Industries Association and conducted by Energy & Industrial Advisory Partners.
That analysis found that a hypothetical five-year delay in offering new oil and gas leases in the Gulf of Mexico would reduce U.S. oil production by 500,000 barrels per day from 2022 to 2040, potentially jeopardizing an average of $5 billion in U.S. gross domestic product and nearly 60,000 jobs.
“At a time when demand is outpacing supply and geopolitical tensions continue overseas, policymakers should be doing everything they can to encourage the development of our nation’s energy resources — not restricting access to the affordable, reliable energy needed here in the U.S. and around the world,” Frank Macchiarola, the American Petroleum Institute’s senior vice president of policy, economics and regulatory affairs, said in a statement.
Biden confidants weigh drilling in Arctic, Gulf
Some of President Biden‘s closest advisers have taken charge of the deliberations over the leasing plan, according to two administration officials, Lisa Friedman reports for the New York Times.
- The discussions are being led by deputy chief of staff Bruce Reed and include chief of staff Ron Klain and longtime adviser Steve Ricchetti, said the officials, who spoke on the condition of anonymity because they were not authorized to comment publicly.
- The plan will probably block new drilling in the Atlantic and Pacific oceans because of bipartisan opposition from congressional lawmakers and leaders in coastal states, per the Times.
- Still under consideration is whether to continue allowing lease sales in parts of the Arctic Ocean as well as the western and central Gulf of Mexico. (The eastern gulf has been off-limits to drilling since 1995.)
The involvement of Biden’s inner circle suggests that the administration is keenly aware of the political consequences of potentially banning new drilling off America’s coasts.
- The administration might be wary of provoking Joe Manchin III (D-W.Va.), who has called for the administration to boost domestic energy production, as it seeks his vote on Biden’s stalled budget reconciliation bill.
- Meanwhile, Lisa Murkowski (R-Alaska), another key vote in the 50-50 Senate, has championed drilling in the Arctic.
“Senator Murkowski believes that a Five-Year Plan is vital to U.S. energy security, should have been finalized already, and must include lease sales in offshore Alaska,” spokeswoman Karina Borger said in an email to The Climate 202. “At this point, however, her expectations are very low for what the administration may release.”
A Manchin spokeswoman declined to comment on the plan before it is released. A White House spokesman did not respond to a request for comment.
Agency alert
Biden administration to hold its first onshore lease sales
Meanwhile, the Interior Department‘s Bureau of Land Management this week will hold its first onshore lease sales for new oil and gas drilling on public lands in seven Western states, Rachel Frazin reports for the Hill.
Earlier onshore auctions were paused in court over environmental concerns. But both the fossil fuel industry and climate activists appear to be unhappy with the new sales, as oil companies want more land with fewer stipulations, and green groups would rather the administration do away with the sales altogether, noting that more drilling will worsen climate change.
The sale in Wyoming will be the largest, with 130,000 acres available for lease. Much smaller sales will take place in Colorado, Montana, Nevada, New Mexico, North Dakota and Utah.
When the sales were originally announced in April, Interior said the amount of land available for leasing would be slashed by about 80 percent compared to what was originally being considered. The agency also said it would increase the royalty fees that companies have to pay the federal government for extracted oil. Both moves are intended to limit impact on the environment and the health of local communities.
Pressure points
Louisiana climate activists say Biden wouldn’t greenlight gas infrastructure in Delaware
After decades of destructive storms that are intensifying with climate change, Louisiana climate activists traveled to Delaware’s Rehoboth Beach with a message for President Biden: Stop encouraging fossil fuel infrastructure along the Gulf Coast that would be unwelcome near your beach home.
“When the federal government allows the fossil fuel industry to build these dangerous facilities in Black, Brown, Indigenous and low-income communities, what they’re saying is that we’re disposable,” Louisiana resident Roishetta Ozane said during a news conference Tuesday in Rehoboth organized by the Defend Louisiana campaign.
“They’re willing to sacrifice our communities for profit, even when the profit they’re making is from a product that science has proven is destroying our climate,” she added.
The campaign contends that the Biden administration and Congress would never allow Rehoboth to be “trashed” by liquefied natural gas, or LNG, export terminals. Companies are racing to build LNG export terminals or expand existing facilities as part of Biden’s pledge to send more gas to Europe amid an energy crunch sparked by the war in Ukraine.
The campaign says that more than half a dozen operations could soon be up and running in one corner of southwestern Louisiana, locking in planet-warming emissions in an area that is vulnerable to natural disasters. They will be in Rehoboth through Labor Day to connect with the community and highlight what they call “the tale of two coasts.”
On the Hill
Scott Pruitt loses Oklahoma GOP Senate primary
Scott Pruitt, who ran the Environmental Protection Agency under President Donald Trump before resigning under a cloud of ethics scandals, lost Tuesday’s Republican primary race for a Senate seat in Oklahoma.
Rep. Markwayne Mullin and former House Speaker T.W. Shannon advanced to a runoff in the GOP primary race to replace Sen. James M. Inhofe (Okla.), who is retiring in January, Sean Murphy reports for the Associated Press. Pruitt came in fifth place, with about 5 percent of votes.
While weighing a Senate run, Pruitt called two GOP donors who made their fortunes in the fossil fuel industry, The Climate 202 previously reported.
Extreme events
Lake Mead’s shrinking waters reveal bodies, treasure, trash
Lake Mead, the nation’s largest reservoir, has declined to about a quarter of its former size amid a 23-year drought, restricting electricity to about 350,000 homes and drinking water to roughly 25 million people across the Southwest. As the water recedes, people are finding items including handguns, baby strollers, human jawbones, vintage Coors cans and huge amounts of scattered trash, Joshua Partlow reports for The Washington Post.
While visitors and residents are documenting dramatic changes at the lake, out of fascination and in search of treasure-like wreckage, local water managers are struggling to maintain facilities.
“I just can’t believe it,” said Dean Weigel, an employee at the Nevada National Security Site, marveling at a speedboat standing upright in a desiccated basin. “We’re supposed to be, what, 50-foot underwater right here?”
Lake Mead’s retreat paints a grim picture of what is to come as human-caused climate change intensifies. Over the past year, Lake Mead has lost water at an alarming rate, with the Hoover Dam hitting a new low every day. As of Monday, it stood at 28 percent capacity, another record low, causing the dam’s power generation to fall by about 13 percent.
In the atmosphere
- Italy hits record June temperatures as another heat wave sweeps Europe — Ian Livingstonfor The Post
- View from the summit: A self-defeating G7 fails on all fronts— Karl Mathiesen and David M. Herszenhorn for Politico
- Gas piped into homes contains benzene and other risky chemicals, study finds— Elena Shao for the New York Times
