Biden Nixes leases offshore oil until 2023 while developing oil reserves

Joe Biden is trying to have his pie and eat it too while halting federal land-based oil and gas exploration and production while acknowledging the importance of fossil fuels in the US energy landscape.

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

In the fiscal 2023 budget, the U.S. government expects oil and gas rentals and bonuses to be just $25 million in fiscal 2023, compared to $395.5 million for fiscal 2022. The decrease of $370 million , notes Bloomberg, is the typical haul for the government from two oil and gas lease auctions in the Gulf of Mexico.

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

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

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

There are many factors behind rising energy costs, from geopolitical volatility and supply chain constraints to political uncertainty, and the American people deserve real solutions. The SPR was introduced to lessen the impact of significant supply chain disruptions, and while today’s release may provide short-term relief, it’s a far cry from a long-term solution to the economic woes Americans are feeling at the pump.

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

Administration has once again had a fundamental misunderstanding of how leaseholds work. The percentage of production leases is at a two-decade high, with nearly two out of three leases producing natural gas and oil. With nearly 5,000 permits pending government approval and thousands more involved in litigation, we stand ready to work with the government to expand domestic manufacturing and ensure the U.S. and our allies have access to more affordable, reliable energy that is needed not only today but also 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 are not actively producing:

Biden is facing political pressure to show he is tackling high gas prices, and he has sought to deflect voter anger by accusing Russian President Vladimir Putin of starting the war against Ukraine and citing oil companies because they left drilling prospects unused and land unused. The President also noted that the country’s rapid recovery from the pandemic has triggered a surge in fuel demands.

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

He said some US oil companies put profits ahead of production and called on Congress to impose fees on companies that don’t take full advantage of leases that allow them to extract oil from federal land. “This is not the time to sit on record profits. It’s time to stand up for the good of your country,” Biden said.

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