The Biden administration is nearing a decision on the future of federal offshore fossil fuel drilling and hasn't ruled out a complete block on new leases.On Thursday, the 90-day comment period for the Department of the Interior's (DOI) proposed five-year offshore leasing plan ended, paving the way for the agency to issue a final decision. In July, the DOI unveiled the plan which gutted a Trump administration proposal, ruling out any leasing in the Atlantic or Pacific and opening the door to an unprecedented scenario where no lease sales would be held through 2028.
"The ability of U.S. producers to provide more oil and natural gas supplies to the world market has also changed geopolitical dynamics for the better, resulting in greater energy security for the U.S. and its allies, in addition to global environmental benefits," Cole Ramsey, the vice president of upstream policy at the American Petroleum Institute (API), said Thursday.
"Given the current global circumstances, rarely has a strong offshore leasing program been more essential to our energy security."
The API submitted comments earlier in the day, urging the administration to open federal waters up for "safe and environmentally responsible" drilling. In the comments, the group expressed concern with the DOI's zero-lease scenario, saying it would jeopardize domestic energy production and weaken energy security.
"Every previous administration, whether Republican or Democrat, has recognized the strategic advantages of U.S. offshore domestic energy and fulfilled their statutory obligation to maintain an offshore leasing program and continuously hold lease sales," Frank Macchiarola — API's senior vice president of policy, economics and regulatory affairs — told reporters on a call Thursday. "Yet, the Biden administration has failed to address current and future U.S. energy needs."
"Announcing a program with zero new lease sales would be the exact wrong policy at the wrong time," he said.
Officials from the Louisiana Mid-Continent Oil and Gas Association, U.S. Chamber of Commerce Global Energy Institute and the Consumer Energy Alliance were also present on the call.
Under the DOI's proposal, the federal government could choose to hold anywhere between 0-11 offshore lease sales, compared to the Trump administration's version which called for 47 such sales. Federal law mandates the interior secretary to issue offshore leasing plans every five years laying out prospective oil and gas lease sales.
However, the administration dragged its feet on a replacement plan as it considered objections from environmental groups, which oppose all new fossil fuel leasing, and pressure from industry as gas prices surged. In her statement announcing the proposal on July 1, Interior Secretary Deb Haaland reaffirmed her and President Biden's "commitment to transition to a clean energy economy."
On Thursday, industry leaders pointed again to energy prices which have moved upward again in recent weeks. The average price of gasoline nationwide increased to $3.87 a gallon on Thursday, according to AAA data.
"The benefits of the U.S. offshore are felt far beyond the Gulf Coast. Finalization of a robust national leasing program is fundamental to secure these benefits for the next generation," National Ocean Industries Association (NOIA) President Erik Milito told FOX Business in a statement. "Energy prices remain stubbornly high, the global economic outlook is uncertain, and our allies need an alternative to higher-emitting Russian-produced energy."
"U.S. offshore leasing provides vast benefits for Americans of all walks of life," he added. "There is a diversity of individuals, businesses, civic groups, elected officials, and organizations submitting comments in favor of a strong domestic production. That is a testament to how the U.S. offshore, and the Gulf of Mexico in particular, shines as an economic and energy wellspring with low carbon emissions."
NOIA, which represents offshore fossil fuel and renewable energy development interests, issued a report in March alongside the API projecting that domestic oil production would decrease, thousands of jobs would be lost and the nation's gross domestic product would decline if the DOI failed to issue a replacement five-year plan or moved forward without additional lease sales.
"The sensible path forward is the finalization of a robust offshore leasing program by the U.S. Department of the Interior," Milito said.
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