NEW ORLEANS (AP) — President Joe Biden’s administration on Friday proposed up to 10 oil and gas lease sales in the Gulf of Mexico and one off the Alaska coast over the next five years — going against the Democrat’s climate promises but scaling back a Trump-era plan that called for dozens of offshore drilling opportunities including in undeveloped areas.
Interior Secretary Deb Haaland said fewer than 11 lease sales — or even no lease sales at all — could occur, with a final decision not due for months. New drilling off the Atlantic and Pacific coasts would be blocked, after being considered under Trump.
“President Biden and I have made clear our commitment to transition to a clean energy economy. Today, we put forward an opportunity for the American people to … provide input on the future of offshore oil and gas leasing,″ said Haaland, whose agency oversees drilling on federal lands and waters.
The proposal brought immediate backlash from both environmentalists — who accused Biden of betraying the climate cause — and oil industry officials and allies, who said it would do little to help counter high energy prices. Gasoline prices averaged $4.84 a gallon on Friday, a strain on commuters and a political albatross for Biden’s fellow Democrats going into the midterm elections. That has left the White House scrambling for solutions, including Biden’s call last week for suspension of the 18.4 cents a gallon federal gas tax.
The Interior Department had suspended lease sales in late January because of climate concerns but was forced to resume them by a U.S. district judge in Louisiana.
The Biden administration cited conflicting court rulings about that decision when it canceled the last scheduled lease sales in the Gulf and Alaska during the previous offshore leasing cycle. That prior five-year cycle, a program adopted under former President Barack Obama, expired on Thursday.
There will be a months-long gap before a new plan can be put in place. The oil industry and its allies say the delay could cause problems in planning new drilling and potentially lead to decreased oil production.
There’s unlikely to be an offshore lease sale until well into next year, said Frank Macchiarola, senior vice president of the American Petroleum Institute, the industry’s top lobbying group.
And, he said, administration officials “went out of their way to say” there might not be any lease sales at all.
“It’s very important for the administration to send a signal to the global oil markets that the United States is serious about increasing supply … for the long term,” he said, repeating a longtime claim by industry officials and Republicans that ties uncertainty over oil supply to high prices.
Biden in recent weeks has criticized oil producers and refiners for maximizing profits and making “more money than God,” rather than increasing production in response to higher prices as the economy recovers from the pandemic and feels the effects of Russia’s invasion of Ukraine.
The leasing announcement was a bitter disappointment to environmentalists and some Democrats who rallied around then-candidate Biden when he promised to end new drilling in federal lands and waters.
The proposal comes a day after the administration held its first onshore lease sales, drawing $22 million in an auction that gives energy companies drilling rights on about 110 square miles (285 square kilometers) in seven western states. The sales came despite the administration’s own findings that burning oil and gas from the parcels could cause billions of dollars in potential future climate damages.
“Our public lands and waters are already responsible for nearly a quarter of the country’s carbon pollution each year. Adding any new lease sales to that equation while the climate crisis is unfolding all around us is nonsensical,” said House Natural Resources Committee Chairman Raul Grijalva, D-Arizona.
Cynthia Sartou, executive director of the environmental nonprofit Healthy Gulf, called the lease-sale plan “a huge loss for Gulf residents, American energy policy and the global climate.”
Moderate Democrat Joe Manchin, who chairs the Senate energy committee, welcomed the proposal as a chance “to get our leasing program back on track.”
“While Americans everywhere are suffering from record high gas prices and disruptions in the global oil market caused by (Russian leader Vladimir) Putin’s senseless war in Ukraine, the Department of the Interior hasn’t held any successful offshore lease sales since November 2020,” the West Virginia lawmaker said.
Under the Trump administration, Interior officials had proposed 47 sales, including 12 in the Gulf of Mexico, 19 in Alaska and nine off the Atlantic coast that were later withdrawn. Trump lost the 2020 election before the proposal was finalized.
The current format of holding Gulf-wide sales was put in place under Obama because of dwindling interest in offshore leases. Prior to that there had been decades of regional sales.
Friday’s announcement opens a 90-day public comment period, then a final plan must be submitted 60 days before it goes into effect.
The government held an offshore lease auction in the Gulf of Mexico in November that brought $192 million in bids. A court canceled that sale before the leases were issued.
Haaland has said previously that the industry is “set” with the amount of drilling permits stockpiled and at its disposal. She testified during a House hearing in April that the industry has about 9,000 permits that have been approved but are not being used.
Oil production has increased as the economy recovers from the coronavirus slowdown, but it’s still below pre-pandemic levels. Energy companies 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.
Major oil companies reported surging profits in the first quarter and sent tens of billions of dollars in dividends to shareholders.
Athan Manuel of the Sierra Club said delaying offshore sales until next year “is an important step toward protecting communities and climate, and we urge the administration to finalize a plan that commits to no new offshore drilling leases, period.”
Brown reported from Billings, Mont. Associated Press writer Matthew Daly in Washington contributed to this story.
Janet Mcconnaughey And Matthew Brown, The Associated Press
AIMCo CEO rejects fossil fuel divestment as investment strategy
CALGARY — The CEO of the Alberta Investment Management Corp. (AIMCo) says divesting from fossil fuels is the opposite approach pension funds should be taking if they want to help solve the climate crisis.
Evan Siddall says AIMCo wants to be a leader in financing the transition to a low-carbon economy, but it won’t do that by divesting from fossil fuels as some global pension funds have done.
Instead, Siddall says AIMCo will be exploring opportunities to invest in oil and gas companies and other heavy industrial emitters.
He says heavy emitting companies are developing plans to lower, though not eliminate, their greenhouse gas footprints and will need capital to implement those plans.
Siddall says investing in the oil and gas sector’s decarbonization efforts will help Canada achieve its climate targets and generate strong returns for investors.
AIMCo is one of Canada’s largest institutional investment managers, responsible for the investments of pension, endowment and government funds in Alberta. As of Dec. 31, 2021, it had $168.3 billion of assets under management.
This report by The Canadian Press was first published Sept. 21, 2022.
The Canadian Press
Thousands rally in Belgium to protest high energy prices
BRUSSELS (AP) — Thousands of people gathered on Wednesday in the Belgian capital Brussels for “a national day of action” to protest against skyrocketing electricity, natural gas and food prices and draw attention to the sharp hike in the cost of living.
Trade unions and city police said that around 10,000 took part. People from across the country gathered, marching behind banners reading “Life is much too expensive, we want solutions now,” and “Everything is going up except our wages,” or carrying placards marked “Freeze prices, not people.” City traffic and public transportation was disrupted.
A Belgian media poll this week showed that 64% of people questioned are concerned that they might not be able to afford their electricity and gas bills, which have more than doubled over the last year, while 80% of respondents said they are already trying to make energy and water savings.
“When we go grocery shopping, what’s in the cart costs now 20, 30 euros (dollars) more, or even more depending on the shop you go to. We are reaching a point where our wallets can’t keep up,” said Pascal Kraeso, a protester from Brussels.
Last month, Prime Minister Alexander de Croo warned that “the next five to 10 winters will be difficult” because of high electricity and natural gas prices fueled by Russia’s war in Ukraine.
The European Union’s 27 member countries have agreed to cut gas usage by 15% on average this winter, and aim in particular to reduce demand during peak hours. EU energy ministers are meeting next week to discuss the crisis.
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