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Debate continues as Biden administration cancels March oil lease sale in Gulf of Mexico

Keith Magill
The Courier

Oil and environmental interests reacted Friday to the federal government's cancellation of March's oil lease sale in the Gulf of Mexico.

The action was widely expected after President Joe Biden signed an executive order Jan. 27 halting new leases in the Gulf as his administration makes plans to deal with climate change.

The Bureau of Ocean Energy Management cited the order in canceling the lease sale, in which companies bid for the right to explore for and produce oil in specific areas offshore. Officials had been scheduled to open bids March 17 in New Orleans.

“We remain hopeful that the administration will proceed with the lease sale upon completion of its review," said Erik Milito, president of the National Ocean Industries Association, which represents oil service companies across the U.S. 

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The Gulf of Mexico produces about 17% of the nation's crude oil supply, federal figures show.

Business and industry officials have expressed concern that Biden's restrictions will cost Louisiana and other oil-dependent states jobs and damage their economies.

The Obama Administration subjected the oil and gas leasing plan for 2017-22 to numerous environmental reviews, Milito said in a prepared statement.

The Interior Department determined greenhouse gas emissions "would be higher without these lease sales because energy production would be outsourced to foreign counties resulting in a higher carbon footprint," he said.

"Offshore oil production has the lowest carbon intensity of the oil-producing regions and supports more than 345,000 jobs, many of which are accessible, high-paying and cannot be easily substituted,” Milito said.

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Environmentalists counter such restrictions are an essential step toward fulfilling Biden's pledge to reduce the pollution, rising seas and other ill effects greenhouse gasses from fossil fuels are wreaking on the planet.

“Canceling this huge offshore Gulf oil auction helps protect our climate and life on Earth. President Biden understands the urgent need to keep this oil in the ground,” said Kristen Monsell, oceans legal director with the Center for Biological Diversity. “This is a great step toward phasing out all offshore drilling and bringing environmental justice to the Gulf Coast and Alaska. We need to help restore coastal communities and marine life.”

Biden's actions are a stark contrast to the policies of President Donald Trump, who touted a push for "American energy dominance" and rejected calls to address climate change or acknowledge fossil fuels' contribution to greenhouse gas emissions.

The Trump administration opened all of the Gulf's available tracts to drilling, but oil companies routinely submitted winning bids to lease less than 1% of the tracts.

The Gulf rig count, a barometer for Houma-Thibodaux's offshore oil-based economy, stands at 17, up one for the week but down six compared to a year ago, according to figures released Friday by Houston-based oilfield services company Baker-Hughes. The count is down 70% from the 56 rigs drilling in August 2014, before a years-long oil bust fueled by a global crude glut and falling prices vanquished an estimated 25,000 local jobs.

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Discussing Biden's actions Jan. 27, oil industry officials noted that the relatively low interest in Gulf drilling was a response to reduced energy demand during the coronavirus pandemic and, before that, a prolonged dip in global crude prices.

Monsell, however, said the Trump administration held those lease sales without carefully analyzing their impact on climate change or on species like critically endangered Gulf of Mexico Bryde’s whales or Cook Inlet beluga whales, already threatened by existing oil and gas activity.

The center and other environmental groups have called on Biden to permanently withdraw all unleased portions of the Outer Continental Shelf, halting all new oil and gas lease sales for good.

Peer-reviewed science estimates that a nationwide federal fossil fuel leasing ban would reduce carbon emissions by 280 million tons annually, ranking it among the most ambitious federal climate-policy proposals in recent years, the group said.

"The damaging effects of fossil fuel pollutants have become clear from record-breaking global temperatures, extreme weather events becoming more frequent and severe, rising seas and coastal flooding, ocean warming and acidification and degraded habitat, including the loss of Arctic sea ice relied on by polar bears and other endangered and threatened species," the center said in a news release Friday.

-- Executive Editor Keith Magill can be reached at 857-2201 or keith.magill@houmatoday.com. Follow him on Twitter @CourierEditor.