Biden nixes offshore oil leases through 2023 while tapping oil reserve

Joe Biden is trying to have his cake and eat it too as he halts oil and gas exploration and production on federal land while acknowledging the importance of fossil fuels to America’s energy landscape.

The Oil Price dot com website reported that the Biden administration halted offshore oil and gas lease sales in the Gulf of Mexico as fossil fuel prices soared. The report was based on a Bloomberg analysis of the president’s budget plan for fiscal year 2023:

In the budget plan for fiscal year 2023, the U.S. administration expects oil and gas rents and bonuses of just $25 million for fiscal year 2023, compared to $395.5 million for fiscal year 2022. The $370 million drop, Bloomberg notes, is the typical haul for the government of two auctions of oil and gas concessions in the Gulf of Mexico.

On Tuesday, the American Petroleum Institute (API) and the National Ocean Industries Association (NOIA) released new analysis outlining the potential economic consequences of delaying the Department of the Interior’s five-year leasing program in the Gulf of Mexico. The next five-year offshore lease program is due to be in place by July 1, 2022, but it is well overdue, and no offshore lease sales can take place unless the DOI implements a new program , the API and NOIA said. A program delayed by five years could jeopardize an average of $5 billion of US GDP, they added.

“A delay in the offshore oil and gas leasing program could mean nearly 500,000 barrels per day produced here in the United States. At a time of geopolitical uncertainty and rapidly rising energy prices, production of oil and gas in the Gulf of Mexico is more important than ever”, NOIA noted.

API also responded to Biden’s announcement regarding the Strategic Petroleum Reserve. API President and CEO Mike Sommers said in an email to the media.

There are many factors driving rising energy costs, from geopolitical volatility and supply chain constraints to political uncertainty, and the American people deserve real solutions. The SPR was put in place to reduce the impact of significant supply chain disruptions, and while today’s release may provide some short-term relief, it is far from a solution to long term to the economic pain Americans are feeling at the pumps.

“The best thing the White House can do right now is remove barriers to investment in American energy production and infrastructure,” Sommers said. “Unfortunately, today we heard more mixed signals regarding the development of affordable, reliable, and safe American natural gas and oil.” He went on to say:

Once again, the administration has a fundamental misunderstanding of how leases work. The percentage of production leases is at its highest level in two decades, with almost two out of three leases producing natural gas and oil. With nearly 5,000 permits pending administrative approval and thousands more tied to litigation, we stand ready to work with the administration to increase domestic production and ensure the United States and our allies access to the affordable and reliable energy we need not just today, but for years to come.

the Washington Post reported on Biden’s policies, including his “use it or lose it” ultimatum to oil and gas companies that have leases that aren’t actively producing:

Biden faces political pressure to show he is tackling high gas prices, and he has sought to deflect voter anger, blaming Russian President Vladimir Putin for initiating war on Ukraine and citing the oil companies for leaving the drilling prospects unexploited and the land undeveloped. The president also noted that the country’s rapid recovery from the pandemic has sparked a torrent of demand for fuel.

During his 14-minute speech, Biden mentioned Putin’s name a dozen times — “Putin’s war,” “Putin’s actions,” “Putin’s price hike” — almost once a minute.

Claiming that some US oil companies put profits before production, he called on Congress to impose fees on companies that do not take full advantage of leases allowing them to extract oil from federal lands. “Now is not the time to sit on record profits. It’s time to step in for the good of your country,” Biden said.

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