For a variety of reasons, chief among them President Joe Biden’s domestic policies, there is a dearth of supply of oil and natural gas amid rising international demand, causing energy prices to spike and sending negative ripples broadly throughout the global economy in terms of goods production delays and shortages.
That problem will almost certainly grow worse in the coming years as it has now been revealed via Biden’s proposed budget for the Fiscal year 2023 that there will be no new lease sales for offshore oil and gas drilling and production, The Daily Caller reported.
That will compound the problems already being caused by the administration’s reported reticence in allowing lease sales currently and could mean a near-complete halt to all desperately needed exploration and production in the Gulf of Mexico for at least the next couple of years.
No more offshore leases for oil and gas exploration and production
The Biden administration didn’t come right out and announce this consequential decision but rather hid it in an appendix near the end of a 208-page proposed FY 2023 budget for the Department of Interior.
In Appendix F on page 201, which lists and categorizes federal revenues by source, it projects a significant decline in anticipated revenue from “Oil and Gas Rents and Bonuses” derived from Outer Continental Shelf energy leases.
Indeed, while an estimated $395.5 million will be received by the federal government from existing leases in FY 2022, that figure drops to a minuscule $25 million in 2023.
No new leasing plan is in place as required by law
“The Interior Department’s budget suggests that there will not be any lease sales in the fiscal year of 2023 which ends in September 2023,” Erik Milito of the National Ocean Industries Association told the Daily Caller. “We know that because they’re not including any money that would come in through the lease sales.”
The Daily Caller noted that the driving factor behind this is an apparent failure of the Biden administration to devise a five-year plan for offshore energy leasing that is required as part of the Outer Continental Shelf Lands Act of 1953. The current plan, developed under the prior administration, expires in June, and without a new plan in place, there can be no authorization for future lease sales.
“There’s no sign that the administration is moving forward with the development of a leasing program which is what is required to have the actual lease sales,” Milito added. “The consequences are significant when it comes to investment, energy production, jobs, and government revenues.”
A costly and consequential decision
Milito is not alone in raising the alarm on this hugely consequential act — or, really, a failure to act — on the part of the administration, as earlier this week Milito’s NOIA organization partnered with the American Petroleum Institute to publish a damning 68-page report outlining just how severe the potential consequences of this decision could be.
Those industry experts estimated that any delay or failure to issue a new five-year plan would ultimately cost Americans by way of a decline of 500,000 barrels of oil production per day, at least 57,000 energy industry jobs, and a decline of approximately $500 billion in the nation’s annual gross domestic product, not to mention the more than $300+ million in lost revenue for the government.
Of course, a spokesperson for the Interior Department told The Daily Caller that work was ongoing concerning a new five-year plan — though the outlet noted that the new plan wouldn’t actually take effect for at least another year due to legal requirements and litigation even in a best-case scenario — and even had the audacity to seemingly accuse the oil and gas companies of not making full use of existing leases, neglecting to mention the other Biden policies that have slowed or forestalled production efforts.