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To boost offshore wind, Biden is about to approve new oil leasing

Oil well platforms work the Gulf of Mexico off Port Fourchon, La. The Biden administration may soon announce new leases for oil and gas drilling in the Gulf of Mexico and potentially off the Alaska coast.

Posted on October 2, 2023

It was only weeks before the 2020 election when Joe Biden told Florida voters he would end offshore drilling as president. His campaign pledge was very clear cut. Now, three years later in the White House, his options aren’t.

Biden administration officials signaled Thursday they’re going to offer fossil fuel companies new leases for offshore oil and gas drilling — in the Gulf of Mexico and potentially off the Alaska coast — in part because of new congressional requirements that tie the fate of offshore wind development to new oil leases.

Biden is due to make a decision on a plan for offshore drilling, legally required every five years. The administration had considered a plan with no oil lease sales for the whole five-year span, but is moving forward with a plan to have at least one and maybe more. Frequent offshore lease sales are a top priority for oil and gas companies seeking to replenish their reserves, but it could also further lock in fossil fuel extraction for decades.

Environmentalists are likely to oppose any new offshore oil drilling, viewing it as a betrayal of a Biden campaign promise. But they and industry lobbyists said they expect Biden’s Interior Department to approve at least some new leasing.

On Thursday, two Biden officials publicly acknowledged that provisions in last year’s big climate spending package — engineered by the fossil-fuel advocate Sen. Joe Manchin III (D-W.Va.) — are influencing the new five-year offshore plan. The law, called the Inflation Reduction Act, requires that the administration hold offshore oil and gas lease auctions before they can award offshore wind leases, a priority for the administration’s clean-energy agenda.

White House National Climate Adviser Ali Zaidi said Thursday that the administration is committed to growing offshore wind. And Interior has had to make its offshore oil and gas decision in that context, under the new rules passed by Congress that have now “interlinked” the offshore wind and oil programs, he said.

White House National Climate Adviser Ali Zaidi said Thursday that the administration is committed to growing offshore wind.

“That is a set of very clear legal obligations,” Zaidi said on stage during the Greenbuild International Conference and Expo in an interview conducted by The Washington Post’s Juliet Eilperin. “That’s challenging and that’s something the [Interior] secretary is working through.”

Interior will deliver the decision Friday, Tommy Beaudreau, deputy interior secretary, said later Thursday morning at a Senate Energy and Natural Resources Committee hearing chaired by Manchin. Sen. Bill Cassidy (R-La.), asked whether the plan would come without restrictions on leasing.

Beaudreau replied by suggesting that Manchin would be pleased. “The program is definitely informed by the IRA and the connection that the IRA makes between offshore oil and gas leasing and renewable energy leasing.”

The conundrum reflects how the horse-trading that produced the Inflation Reduction Act will continue to linger over the administration’s environmental decisions, no matter how long Biden is in office. The almost $370 billion law pumps most of its spending into clean energy, but to sign onto the legislation, Manchin demanded concessions for fossil fuel development that he supports.

Neither Beaudreau nor Zaidi said exactly how much leasing will be part of the announcement. The original proposal for the plan from last year left the door open for as many as 11 sales. An analysis from the Natural Resources Defense Council concluded just one or two would be enough cover all of the wind leasing the administration has planned.

Two people familiar with the plan — who spoke on the condition of anonymity because it was not yet public — said it will offer the lowest number of leases in history. Since 1992, no five-year plan has had fewer than 11 lease sales; most have had 15 to 20, according to data from the Bureau of Ocean Energy Management.

Even with a small number of leases, some environmental groups remain opposed to any new oil drilling, including legions of climate activists who helped Biden into office. It has become a political problem for the president, who has seen repeated protests this year demanding that he stop fossil fuel producers paired with a lack of enthusiasm for the historic climate bill he did help pass.

Like many environmentalists, the Natural Resources Defense Council cited BP’s 2010 Deepwater Horizon disaster in the Gulf of Mexico — at the time the worst offshore oil spill in U.S. history — in its opposition to more leasing. It says the offshore drillers have enough existing leases to keep operating for decades and shouldn’t get more.

“Exposing even more Gulf waters, marine life and coastal communities to the risk of a BP-style disaster makes no sense,” Valerie Cleland, the group’s senior ocean advocate, said in an email. “It’s time to break, not deepen, our dependence on the fossil fuels that are driving the climate crisis.”

In the past year, the White House has had to balance decisions over transitioning from fossil fuels with political realities, including potential blowback from rising gasoline prices. Crude prices have been rebounding for months, recently cresting $90 a barrel for the first time in almost a year.

Oil and gas companies say new federal leasing can help address prices long term. New sales sustain multibillion-dollar offshore development programs. About 15 percent of U.S. oil production comes from drilling in federal waters.

The industry’s largest trade group, the American Petroleum Institute, had sued the administration for not having a new five-year leasing plan in place when the prior one expired in June 2022. That is what prompted the Interior Department to tell a federal judge it would announce a final plan this month.

Even if it does, a new lease sale may not follow any time soon. Interior has said it needs several more months for the legal steps to put that plan in place by year’s end. And the law requires more environmental reviews before conducting the first sale under the plan.

Industry lobbyists estimate that could cause another gap of at least 18 months before the next sale, worrying both offshore oil and wind interests.

American Petroleum Institute leaders say they are frustrated that Biden officials are targeting their industry to pursue a campaign promise they say is unrealistic. “We can work together to meet this growing energy demand while also reducing overall emissions, but we need sound policies like a robust 5-year program in place to do it,” Lance West, the group’s vice president of federal relations and Manchin’s former chief of staff, said in a statement.

Lobbyists for wind developers and utilities have also been pressing administration officials for more leasing to support the industry’s growth. Republican opponents have threatened to undo many of Biden’s clean-energy initiatives, and renewables lobbyists are concerned there isn’t enough time to do all the wind leasing planned before the end of Biden’s first term. State mandates for more offshore wind power have also fed the industry’s urgency for more lease sales, according to people familiar with the discussions.

The industry has been slowed by rising interest rates that have made their projects more expensive to build. As developers tried to expand on both sides of the Atlantic Ocean, costs rose further because the industry’s supply chain hadn’t grown fast enough.

But if manufacturers don’t see more leasing opportunities in the future, they won’t build the factories now to support that development for years to come, industry advocates said. They need progress both from wind developers proving that their projects are viable and from policymakers providing regular support, they said.

“They are all interlinked,” said Josh Kaplowitz, who leads the offshore wind team at the American Clean Power Association, a wind and solar industry group. “You need the initial projects to go forward, but you also need the potential for new projects coming down the pike.”

The Natural Resources Defense Council says a pre-existing oil and gas sale — just delayed until November under court order — can cover upcoming wind sales — for 12 months as outlined in the law — planned for the Atlantic Ocean and the Gulf of Mexico. The administration could add just one more oil sale, as far out as July 2025, to cover wind sales in the Gulf of Maine and off the Oregon coast into 2026.

There are other wind sales under discussion for near New York and California, but those are early stage plans that may not happen for years if they happen at all, according to NRDC. An oil lease sale in January 2027 could cover those.

Last year’s offshore oil and gas proposal had allowed for as many as 10 potential auctions in the Gulf of Mexico and one in Alaska’s Cook Inlet. It already ruled out new leasing in the Atlantic and Pacific oceans, which have been of less interest to the industry in recent years.

Alaskan leasing would be allowed off the south coast, but not in the Arctic Ocean, previously withdrawn from leasing by combined decisions from Biden and former president Barack Obama. Biden had declared he would make the Arctic’s Beaufort Sea off limits only months ago in a package of conservation moves announced alongside approval for the controversial ConocoPhillips onshore project called Willow.

One of the largest oil developments ever on federal land, Willow had been heavily targeted by climate activists, many of whom are still angry at Biden for approving it.

A heckler interrupted Biden during a speech in Arizona Thursday, asking why the president hasn’t declared a climate emergency.

“If you shush up, I will meet with you immediately after this,” Biden said before resuming his remarks.

Zaidi, the The White House adviser, said administration officials agree that the country needs to keep moving away from fossil fuels, to reduce greenhouse gas emissions causing climate change.

“An economy that depends on fossil to run and to be prosperous is hamstrung,” Zaidi said. “It’s very clear to us that true energy security, true consumer cost security and the path to addressing the climate crisis aggressively is to massively shift away from energy sources that put massive amounts of pollution into the sky.”


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