Stop the foot-dragging on offshore oil and gas leases
In a textbook case of unintended consequences, the White House called on OPEC+ to increase oil production to alleviate high oil prices while, almost at the same time, saying it was appealing an injunction blocking its arbitrary pause of new U.S. oil and gas lease opportunities.
The plea comes as inflationary energy prices are hitting American consumers. According to recently released Labor Department data, oil prices are up more than 40 percent this year and average gasoline prices have been above $3 per gallon since May. As national security adviser Jake Sullivan correctly noted, “Higher gasoline costs, if left unchecked, risk harming the ongoing global recovery.”
Seven months ago, the Biden administration enacted the arbitrary pause on new federal oil and gas lease sales. Two months ago, a federal judge ruled against the pause, confirming that the Department of the Interior is required by law to expeditiously develop America’s energy resources, including the obligation to schedule and hold offshore oil and gas lease sales.
Earlier this month the Department of the Interior said it would proceed with new leasing consistent with the injunction but would still appeal the decision.
American offshore oil and gas production provides no shortage of benefits to the American people. The industry supports more than 345,000 high-paying and accessible jobs and generates spending and investments in every single U.S. state.
My organization, the National Ocean Industries Association, released a new report this month taking a closer look at the multitude of jobs and investment associated with Gulf of Mexico energy production. In 2019, the Gulf supported $28 billion in investment, 1.8 million barrels of oil production per day, and 345,000 jobs throughout the country.
More than 200 types of jobs are directly involved in offshore oil and gas projects. These jobs are high-paying and have an average salary nearly 30 percent higher than the national average.
Jobs and spending for offshore oil and gas projects begin well before a lease is signed with the federal government. Geologists, computer scientists, petroleum engineers, finance professionals and others are needed before the leasing process begins.
Without the certainty offered by regular and predictable lease offerings, offshore oil and gas jobs face tremendous risk.
Along with Gulf of Mexico jobs and spending, American emissions and climate progress will take a hit without continued access to new opportunities. Offshore oil production has the lowest carbon intensity of the oil-producing regions. An Obama administration review of the current federal offshore leasing plan determined greenhouse gas emissions would be higher without these lease sales because production would be outsourced to foreign counties resulting in a higher carbon footprint.
Not to mention, billions of dollars in revenues from offshore oil and gas production have funded critical conservation and recreation programs, including investments in economically distressed urban areas.
U.S. government efforts should strive to prevent the substitution of American offshore production with barrels from high-emitting foreign sources, such as Russia, with weak environmental oversight. Trying to limit responsible federal oil and gas leasing is a massive, unforced error by the Biden administration that undercuts American jobs, businesses, national security, and emissions and environmental performance.
As oil and gas prices continue to rise, the U.S. must take steps to avert potential inflationary risks and proactively ensure affordable energy for all walks of life, especially low-income communities. However, the best policy solutions for Americans won’t be found abroad, they are here in the Gulf of Mexico. The U.S. Gulf of Mexico is an incredible American energy, economic and environmental and emissions success story, one that policymakers would be wise to embrace.