The Biden administration held an auction for oil and gas drilling in the Gulf of Mexico on Wednesday, offering millions of acres after months of litigation had held up the sale.
Administered by the Bureau of Ocean Energy Management, the sale offered more than 72 million acres for auction, with the agency receiving 352 bids on 311 lease tracts from 20 companies, although 26 companies ended up participating in the sale. The agency announced it had received nearly $442 million for all bids, with high bids amounting to more than $382 million.
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The auction was mandated in the Democrats’ Inflation Reduction Act after Sen. Joe Manchin (D-WV) added provisions to the climate bill that would revive three canceled offshore oil and gas lease sales — to the lament of environmentalists, who have been calling for less drilling in the Gulf of Mexico. However, the deal was delayed from its September date after the agency added last-minute environmental restrictions and scaled the sale back to 67 million acres as part of a settlement with environmentalists.
Industry group American Petroleum Institute, along with the state of Louisiana and U.S. oil company Chevron, sued the BOEM after the agency issued its notice of sale. A federal judge in southwest Louisiana ordered the sale to proceed without the environmental restrictions, which led to an appeal by environmental groups. This further delayed the sale while oral arguments were heard.
In November, the 5th U.S. Circuit Court of Appeals ruled that the auction would be rescheduled to Dec. 20 and would cover the original span of 72.7 million acres.
Louisiana Republicans cheered the auction on Wednesday, while simultaneously placing blame on the Biden administration for delaying the sale. House Majority Leader Steve Scalise (R-LA) called for additional lease sales in the Gulf to shore up domestic energy production.
“Today, we saw resoundingly strong demand for energy exploration and production in the Gulf of Mexico, despite attempts by the Biden administration to prevent this sale at every turn,” Scalise said in a written statement. “At a time when Americans are struggling with sky-high inflation and expensive energy costs, this administration continues to fail American families and small businesses by doing everything possible to make energy more expensive and leave us more dependent on foreign, hostile nations.”
Manchin joined Republicans in jabbing the Biden administration for holding up the auction, calling the sale a “testament to the importance of the IRA for our energy security.”
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Environmental groups, however, called for further action from the Biden administration to help protect coastline communities and wildlife.
“While President Biden had to move forward with this sale by court order, he does have the authority to prevent the expansion of offshore drilling through executive authority to permanently protect U.S. waters and coasts,” Oceana acting Campaign Director Michael Messmer said. “The United States can lead the call for a transition away from fossil fuels that was agreed upon by more than 200 countries at COP28 last week, but only if President Biden steps up to permanently protect our waters from future offshore drilling.”
