The Bureau of Ocean Energy Management has “no discretion” on whether to carry out previously canceled offshore oil and gas lease sales because of changes in law enacted through Democrats’ Inflation Reduction Act, the agency said Thursday, a setback for environmental groups demanding an end to new leasing.
The statement stakes out the administration’s clear position on a question that’s been hanging around since the act passed, which was whether the department would seek to forestall or get around new directions from Congress to hold the canceled sales. Many Democrats, including President Joe Biden, and their environmentalist constituencies have backed restrictions on leasing, up to and including a complete ban on new leasing.
BIDEN PRESENTED WITH TOUGH CHOICES ON OFFSHORE OIL AND GAS LEASING
The BOEM, a subagency within the Department of the Interior tasked with managing the Outer Continental Shelf leasing program, announced Thursday that it has prepared environmental review documents covering Lease Sale 259 and 261 — two Gulf of Mexico lease sales that Interior canceled in May. The Inflation Reduction Act included language effectively reversing that decision and putting clear deadlines in place by which Interior must hold the lease sales.
Lease Sale 259 must be held by the end of March 2023, and 261 must be held by the end of next September, according to the new law.
Both sales were contemplated in the 2017-2022 OSC leasing program but were canceled in May, along with one lease sale in Alaska. Interior said the two Gulf sales were canceled “as a result of delays due to factors including conflicting court rulings that impacted work on these proposed lease sales.” The 2017-2022 leasing program expired on June 30, but Congress ordered the sales to be held “notwithstanding the expiration” of the program.
Some environmental groups have challenged the department to use existing authority to circumvent the act’s leasing instructions, with one argument being that the new law does not nullify existing environmental laws or take away Interior’s discretion over leasing.
The BOEM, however, emphasized it was releasing the review documents “pursuant to the Inflation Reduction Act.”
“While BOEM has no discretion on whether to hold these lease sales, BOEM is preparing this Supplemental EIS to follow its normal leasing process to the fullest extent possible,” it said Thursday alongside the release of the environmental documents, known as draft supplemental environmental impact statements.
The release of the documents is the second major oil and gas leasing action to be taken on instruction from the Inflation Reduction Act. Interior reinstated Lease Sale 257, the lone offshore oil and gas lease sale it carried out last year, on Sep. 14.
A federal judge had thrown out the lease sale in January after environmental groups successfully challenged its underlying environmental review, but Congress ordered it to be reinstated within 30 days of passage.
Interior “ordinarily has discretion regarding whether and when to hold lease sales, the terms of the sales, and whether to accept bids and issue leases received in the sales,” the department said in a court filing last month before the lease was reinstated.
Congress’s direction, however, “has prospectively changed existing law as to the tracts at issue in Lease Sale 257,” and the IRA “withdraws Interior’s discretion to do anything other than issue these leases on the terms specified by Congress, irrespective of [the National Environmental Policy Act].”
The Inflation Reduction Act was a compromise version of Biden’s “Build Back Better” green energy and social spending agenda, which Sen. Joe Manchin (D-WV), a centrist who supports more oil and gas production, negotiated down to include these leasing provisions.
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Athan Manuel, director of the Lands Protection Program for environmental NGO Sierra Club, said the act “represents a historic step forward in achieving our nation’s climate goals.” The law provides hundreds of billions of dollars in tax incentives and grants for green energy.
But Manuel said its oil and gas leasing provisions undercut the law’s intentions to mitigate climate change.
“Now is our moment to acknowledge the weight of these impacts on our communities and our environment and move to phase out this program once and for all,” Manuel said of the news from the BOEM.
Erik Milito, president of the National Ocean Industries Association, praised the announcement Thursday: “With the current volatility in energy markets, characterized by uncertainty and high prices, continued U.S. offshore lease sales are crucial to improve energy affordability and national security.”
