Biden cancels offshore oil lease sales in Gulf Coast, Alaska

May 12, 2022, 9:35 AM | Updated: 3:53 pm
FILE - An oil drilling rig is pictured at sunset, Monday, March 7, 2022, in El Reno, Okla. A federa...

FILE - An oil drilling rig is pictured at sunset, Monday, March 7, 2022, in El Reno, Okla. A federal appeals court in New Orleans hears arguments Tuesday, May 10, 2022, about whether President Joe Biden legally suspended new oil and gas lease sales because of climate change worries. (AP Photo/Sue Ogrocki, File)

(AP Photo/Sue Ogrocki, File)

WASHINGTON (AP) — The Biden administration 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 comes as Interior 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 come 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.

Environmental groups hailed the latest lease cancellation, saying the administration needs to do more to curb greenhouse gas emissions from fossil fuels that are driving climate change.

“To save imperiled marine life and protect coastal communities and our climate from pollution, we need to end new leasing and phase out existing drilling,” said Kristen Monsell, oceans legal director at the Center for Biological Diversity, an environmental group.

Republicans denounced the decision as harmful to consumers and U.S. national security.

The Interior Department’s decision “approaches levels of irresponsibility and reckless stupidity never seen before,” said Rep. Garret Graves, R-La. “We are paying record prices for gasoline and to heat and cool our homes. Rather than using American energy sources to help solve the problem and lower prices, the Biden administration continues to carry out policies that benefit” Iran, Saudi Arabia, Venezuela and other countries, Graves said.

“New leasing will not lower current gas prices,” countered Dustin Renaud, a spokesman for the environmental coalition Healthy Gulf. It takes several years for new leases to begin producing oil, he noted, adding that the industry “is already sitting on over 8 million acres of unused offshore leases.”

The state challenge to Biden’s leasing order has not yet gone to trial, but a federal judge blocked the order in a preliminary injunction last year, writing that since federal law does not state the president can suspend oil lease sales, only Congress can do so.

After U.S. District Judge Terry Doughty ruled for the states, the Interior Department held an offshore lease sale last fall, which a federal judge in Washington, D.C. later blocked.

The administration has appealed Doughty’s ruling, but has scheduled onshore lease sales next month in eight mostly Western states. However, the administration scaled back the amount of land offered for drilling and raised royalty rates by 50%.

Biden has come under pressure to increase U.S. crude production as fuel prices spike because of the coronavirus pandemic and the war in Ukraine. The United States and other nations have banned imports of Russian oil, driving up prices worldwide.

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

Interior 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.

Interior Secretary Deb Haaland said last month that the oil and gas industry is “set” with the amount of drilling permits at its disposal. She defended Biden administration actions to scale down federal leasing, saying that industry has about 9,000 permits that have been approved but are not being used.

“The industry is free to use these permits in a way they see fit. They just haven’t acted on those,” Haaland told a House committee last week.

Oil companies say they have increased production as the economy recovers from the coronavirus pandemic, but they have been reluctant to ramp up production further, citing a shortage of workers and restraints from investors wary that today’s high prices won’t last. Decisions by the OPEC+ oil cartel, led by Saudi Arabia and Russia, to only modestly increase supplies to the world market have also kept prices high.

Major oil companies reported surging profits in the first quarter and are sending tens of billions of dollars in dividends to shareholders, along with stock buybacks that have sharply increased the value of investor holdings.

Democrats accuse the industry of “price gouging” and have vowed to bring legislation cracking down on price manipulation to votes in the House and Senate. A bid to impose a “windfall profits” tax on oil producers has generated little support in Congress.

___

Associated Press writer Janet McConnaughey in New Orleans contributed to this report.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

In this courtroom sketch, R. Kelly briefly addresses Judge Ann Donnelly during his sentencing in fe...
Associated Press

EXPLAINER: How will R. Kelly sentence impact other trials?

CHICAGO (AP) — R. Kelly could be in his 80s before the singer is free again, based on a 30-year prison term imposed this week by a New York federal judge for parlaying his fame to sexually abuse young fans, including some who were children. And if the 55-year-old loses at three related trials in […]
21 hours ago
In this photo provided by the U.S. Army Corps of Engineers, this 1942 Navy photo shows miners build...
Associated Press

Navy report: Multiple errors poisoned Pearl Harbor water

PEARL HARBOR, Hawaii (AP) — A Navy investigation released Thursday revealed that shoddy management and human error caused fuel to leak into Pearl Harbor’s tap water last year, poisoning thousands of people and forcing military families to evacuate their homes for hotels. The investigation is the first detailed account of how jet fuel from the […]
21 hours ago
Associated Press

Police: Shooting in Newark wounds 9; all expected to survive

NEWARK, N.J. (AP) — Nine people, including a teenager, were wounded Thursday evening in gunfire outside a neighborhood grocery shop in Newark, police said. All of the victims are expected to survive and police are searching for a vehicle believed to have been involved in the shooting, Acting Newark Public Safety Director Raul Malave told […]
21 hours ago
Roberto Marquez adds a cross to a makeshift memorial at the site where officials more than 50 peopl...
Associated Press

US official: Migrants who died cleared inland checkpoint

The tractor-trailer at the center of a disastrous human-smuggling attempt that left 53 people dead had passed through an inland U.S. Border Patrol checkpoint with migrants inside the sweltering rig earlier in its journey, a U.S. official said Thursday.
21 hours ago
FILE - UCLA guard Jaime Jaquez Jr., right, tries to get by Southern California forward Isaiah Moble...
Associated Press

Big Ten votes to add USC, UCLA as members starting in 2024

In a surprising and seismic shift in college athletics, the Big Ten voted Thursday to add Southern California and UCLA as conference members beginning in 2024. The expansion to 16 teams will happen after the Pac-12’s current media rights contracts with Fox and ESPN expire and make the Big Ten the first conference to stretch […]
21 hours ago
FILE—Plastic bottles of shampoo are displayed at Compton's Market in Sacramento, Calif., Friday, ...
Associated Press

California sets nation’s toughest plastics reduction rules

SACRAMENTO, Calif. (AP) — Companies selling shampoo, food and other products wrapped in plastic have a decade to cut down on their use of the polluting material if they want their wares on California store shelves. Major legislation passed and signed by Gov. Gavin Newsom on Thursday aims to significantly reduce single-use plastic packaging in […]
21 hours ago

Sponsored Articles

(Courtesy Condor)...
Condor Airlines

Condor Airlines shows passion for destinations from Sky Harbor with new-look aircraft

Condor Airlines brings passion to each flight and connects people to their dream destinations throughout the world.
...
CANVAS ANNUITY

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

ADHS mobile program brings COVID-19 vaccines and boosters to Arizonans

The Arizona Department of Health Services and partner agencies are providing even more widespread availability by making COVID-19 vaccines available in neighborhoods through trusted community partners.
Biden cancels offshore oil lease sales in Gulf Coast, Alaska