The Biden administration is barreling toward a self-imposed deadline to release its plan to guide drilling for oil off the nation’s coasts for the next five years.
But what President Joe Biden will approve — allowing new oil sales or imposing a moratorium on leasing — remains a mystery.
If the program includes new offshore oil auctions, it would spark discord with some of Biden’s voters, as many environmentalists see continued drilling as a path toward climate disaster. But the administration faces political pain in any direction, as industry supporters and GOP lawmakers already view the White House as an antagonist to the industry and will argue that reducing offshore leasing threatens U.S. energy security with limited climate benefits.
The administration’s verdict is expected by the last day of September — this Saturday — as Interior Department officials earlier this year told a federal judge they planned to meet that deadline. At the moment, this date carries more significance, as it coincides with the timing of the looming government shutdown that will occur Oct. 1 without a congressional spending deal. Any delay could, therefore, keep interested parties in the dark for an unknown period of time, if federal agencies largely close up shop and send thousands of government workers home on a furlough.
More broadly, release of the plan comes as climate activists remain outraged by the White House’s recent drilling decisions, particularly the approval earlier this year of a large oil project in the Arctic.
More than a year has passed since the Interior Department released its first draft of the five-year plan. That proposal left multiple options on the table, from holding no sales offering companies a chance to buy offshore oil leases to as many as 11 new auctions in the Gulf of Mexico and Alaska.
But the draft, inked by Interior’s Bureau of Ocean Energy Management, demurred on providing the administration’s “preferred alternative.”
Given the thorny politics of energy policy, Kevin Book, managing director of ClearView Energy Partners, said he remains unconvinced the White House will keep to its promised schedule.
Book said there isn’t much for the administration to win politically by releasing a plan right now, whether they schedule too many sales for environmental groups or too few to satisfy industry allies, who could complain that a lack of auctions contributes to high oil prices.
“I can’t see any incentive for the White House to want to jump into the breach between ‘not green enough’ and ‘not cheap enough,’” he said.
Many experts, Book included, believe Biden is weighing a middle-of-the-road strategy, with a limited number of oil sales scheduled in the coming years. That’s in part due to a pro-fossil fuel provision in the Inflation Reduction Act that restricts offshore wind leasing unless a recent offshore oil sale has been held. Offshore wind and other renewables are a key priority for public lands and waters under the Biden administration.
Once the November sale takes place in the Gulf of Mexico, all the oil sales scheduled since Biden took office — as part of the prior five-year oil schedule — will have been carried out thanks to court and legislative mandates that forced the president’s hand.
With the new five-year plan, Biden has his first clear shot to decide whether to auction drilling rights or not.
The White House did not provide comment for this story in time for publication. The Interior Department declined to comment.
Greens are pushing the White House to be bold by holding no new sales, a move they say would prove a “lesson learned” from March, when Interior signed off on ConocoPhillips’ Willow project in the Arctic, said Valerie Cleland, senior ocean advocate at the Natural Resources Defense Council.
“Big Oil is one of the hardest things to fight. They are so well funded, and they are so pervasive in politics and messaging,” she said. “My hope is that the Biden administration sort of has learned from Willow and the pushback they got from that.”
But oil and gas companies have powerful allies, too, who are trying to push the White House toward holding a full suite of auctions, including Sen. Joe Manchin, the pro-fossil fuel Democrat from West Virginia. With the final program coming more than a year after the previous offshore oil program expired, industry is clamoring for clarity over their ability to secure new drilling rights.
“The release of the U.S. offshore leasing program — which is mandated by law — is long overdue,” said Erik Milito, president of the National Ocean Industries Association, warning of “erosion of long-term confidence and certainty in the Gulf of Mexico region.”
With the final program expected any day, here are four things to keep an eye on:
The biggest question that the final program should answer is how many oil sales the Biden administration would schedule over the next few years.
In the draft program, if Interior moved ahead with sales, the agency had potentially included scheduling one in 2023 — which likely can’t take place in time. Biden officials have suggested they will not begin the environmental planning work for new oil sales until after the five-year program is final.
The draft then proposed up to two sales a year for the Gulf of Mexico in 2024, 2025 and 2027. In 2026, the draft proposed three sales could be held, two in the Gulf and one in Alaska’s Cook Inlet. In 2028, the draft proposal includes just one sale.
Interior could opt for any combination of these sales — or none at all.
To Alaska or not to Alaska
The draft offshore oil program narrowed down potential oil sales to two locations: either the Gulf of Mexico or Alaska’s Cook Inlet, a long channel that extends 180 miles from Anchorage to the Gulf of Alaska.
But the initial plan only slated one potential sale in Cook Inlet, the state’s oldest oil and gas play.
Alaska’s congressional delegation has banged the drum for Interior to include Cook Inlet in the final leasing schedule. That’s in part because the natural gas currently produced in Cook Inlet is running out, so much so that utilities that rely on that gas to power and heat Anchorage are casting about for other places to source their fuel.
Alaska lawmakers like Sen. Lisa Murkowski (R) argue that more leasing must be allowed to keep drillers interested in tapping new gas wells to replace the old.
Critics who want drilling in Cook Inlet to be retired or limited to its existing footprint have countered that previous oil sales in Cook Inlet have attracted very little interest from drillers.
The Biden administration echoed their concerns in 2022, when they canceled the final Cook Inlet sale schedules in the previous offshore oil program “due to lack of industry interest in leasing in the area.” It was reinstated by the Inflation Reduction Act and held late last year. Only one bidder participated.
The industry group Alaska Oil & Gas Association, though, has argued that it is impossible to gauge industry interest in a sale until it is held.
‘I will hold their feet to the fire’
Regardless of how many oil sales are included in the final sale, the coming days are sure to spark controversy for the president.
This will be the 10th offshore oil program since 1978, when the Outer Continental Shelf Lands Act was amended to include a program for drilling in federal waters. But it is perhaps the first in which a broad swath of the American public is concerned about drilling’s long-term impacts on the climate.
The environmental coalition Protect our Coasts collected nearly a million signed petitions and delivered them to the administration this week urging Biden to schedule zero leases in the five-year plan. More than 200 organizations, including the Natural Resources Defense Council and WildEarth Guardians, wrote their own letter to the president this month saying, “offshore leasing is as unnecessary for our energy security as it is disastrous for our climate and communities.”
The offshore oil program has also already created friction for the White House on Capitol Hill.
As a rebuff to Biden’s attempt to limit leasing in his first years in office, Manchin attached the provision to the IRA mandating reinstatement of four canceled offshore oil sales, as well as the requirement that the administration allow future oil leasing on public lands and waters in order to continue leasing of renewable energy projects.
Earlier this year, Manchin said he was incensed by the delay in the five-year plan’s release and the consideration of a no-new-leasing scenario.
“This is not optional,” he said of offshore leasing under federal laws. “They are putting their radical climate agenda ahead of our nation’s energy security, and they are willing to go to great lengths to do it.”
Manchin also promised to “hold their feet to the fire” if lease sales aren’t held.
But Biden has little support on the other side if he takes a middle road on leasing.
Earlier this month Reps. Frank Pallone (D-N.J.) and Raúl Grijalva (D-Ariz.) led a letter urging Biden to end new leasing.
“Offshore oil and gas energy development is dangerous,” they wrote. “We cannot drill our way to a safe climate, healthy environment, and thriving economy.”
The final program expected this week is a big reveal, but it’s not the final step in the offshore program.
Once a final program is published, Haaland will wait a mandatory 60 days before making a final decision to approve the program. That period is a chance for the president and Congress to respond to what Interior has proposed.
In a March court filing explaining BOEM’s delay in releasing a five-year plan in 2022, Deputy Director Walter Cruickshank said a final program should be approved by December. It’s unclear if a protracted federal government shutdown would affect that timeline.
Even after that final decision, individual oil sales could take months if not years to prepare, meaning Interior could have a significant lead time before a next oil sale is held, said NOIA’s Milito.
There’s also the chance the administration delays release of a plan, said ClearView’s Book. He said he’s not sure if the White House will release the plan given a recent decision by a federal judge to allow the administration until November to hold the last currently scheduled offshore oil auction in the Gulf of Mexico.
Under the IRA, every oil sale buys a year’s worth of offshore wind leasing. A delay in this fall’s offshore oil auction gives the administration that much more time before it has to hold another sale and unleash more offshore wind leasing, he said.
“The whole argument for getting the five-year plan out is to get a long runway for wind,” he said. “They just got a real extension on that runway.”