Biden halts offshore oil lease sales in Gulf Coast, Alaska

WASHINGTON – The Biden administration said it is canceling three oil and gas lease sales scheduled in the Gulf of Mexico and off the coast of Alaska, removing millions of acres from possible drilling as U.S. gas prices reach record highs.

The Interior Department announced the decision Wednesday night, citing a lack of industry interest in drilling off the Alaska coast and “conflicting court rulings” that have complicated drilling efforts in the Gulf of Mexico, where the bulk of U.S. offshore drilling takes place,

The decision likely means the Biden administration will not hold a lease sale for offshore drilling this year and came as the Interior Department appears set to let a mandatory five-year plan for offshore drilling expire next month.

“Unfortunately, this is becoming a pattern – the administration talks about the need for more supply and acts to restrict it,” said Frank Macchiarola, senior vice president of the American Petroleum Institute, the top lobbying group for the oil and gas industry.

“As geopolitical volatility and global energy prices continue to rise, we again urge the administration to end the uncertainty and immediately act on a new five-year program for federal offshore leasing,” he said.

The lease cancellations came as gas prices have surged to a record $4.40 a gallon amid the war in Ukraine

and other disruptions that have pushed prices $1.40 a gallon higher than a year ago. Consumer prices jumped 8.3% last month from a year ago, the government said Wednesday.

A federal appeals court in New Orleans, meanwhile, is considering a challenge to a moratorium on new federal leasing that Biden imposed soon after taking office in January 2021. Biden said the administration needed to consider the effect of new drilling on climate change and conduct proper environmental reviews.

Louisiana and 12 other states challenged Biden’s order, saying laws passed in response to the 1970s oil crisis require lease sales on federal lands and waters.

The Biden administration failed to “grapple with prior analyses” of the planned sales to give a valid reason for postponing or canceling them, Louisiana Deputy Solicitor General Joseph Scott St. John told a 5th U.S. Circuit Court of Appeals panel this week.

The three-judge panel did not indicate when they will rule.

Biden also faces pressure from Democrats and environmental groups urging him to do more to fight climate change, even as his legislative proposals on climate and clean energy remain stalled in a sharply divided Congress.

The Interior Department cannot conduct new offshore oil and gas lease sales until it has completed a required five-year plan. The current plan expires June 30, and administration officials have not said when or if a replacement will be released.