The Biden administration has canceled one of the most notorious oil and gas leasing opportunities expected by the Home Office. The decision, which halts the potential for more than 1 million acres of oil production in Cook’s Bay in Alaska, comes at a challenging political moment when gas prices reach painful new highs.
In a statement first shared with CBS News, the Home Office cited “the industry’s lack of interest in leasing in the area” for the decision “not to move forward” by selling the lease to Cook Inlet. The department also suspended two leases in question for the Gulf region due to “controversial court decisions that affected the work on these proposed leases.”
The in-house’s Ocean Energy Management Bureau had previously canceled leasing sales at Cook Inlet three times – in 2007, 2008 and 2011 – also citing a “lack of industry interest” at the time as a reason to suspend sales.
Federal law requires the Home Office to adhere to a five-year leasing plan to tender for offshore leasing transactions. The administration had until the end of the current five-year plan – due to expire at the end of next month – to complete these leases.
The sun sets behind an oil well in Prudhoe Bay, Alaska on March 17, 2011. Lucas Jackson / REUTERS
Until now, the White House has been silent about Alaska’s massive rent. However, canceling the sale would be in line with President Joe Biden’s political promises to halt global warming. But these promises have become a political challenge to pump prices.
“They don’t want to be hit by Republicans in light of high gas prices,” an environmentalist told CBS News, provided he was not named due to sensitivity. “They are killed in inflation-based attacks. The most visible sign of inflation is high gas prices.”
The delicate political situation became apparent after a senior environmental official showed his hand in an email copied by a CBS News reporter. Gina McCarthy, the White House’s national climate adviser, wrote that the sale of Cook’s entrance had been canceled. It doesn’t continue. “
Almost immediately, another White House official jumped in to say that McCarthy was ahead of himself. Interior Ministry officials said no final decision had been made. However, on Wednesday, as time went on, the department made its announcement.
Frank Machairola, a senior official at the American Petroleum Institute, the country’s largest oil and gas association, called the cancellation of Cook Inlet’s lease “another example of the administration’s lack of commitment to U.S. oil and gas development.” .
“The president is talking about the need for additional supplies to the market, but his administration has failed to take action to respond to this rhetoric,” Machairola said, adding that politically it would play “not well”.
“The kind of price environment we are seeing has negative consequences for stopping oil and gas development, both politically and practically,” he said.
On Wednesday, the average national price of ordinary gas reached a record high of $ 4.40, according to AAA.
For environmental groups, the decision was welcome news. Alaska’s offshore leasing agreement would open up drilling opportunities in the range of more than 1 million acres in 40 years or more of production. The new activity would lead to new underwater pipelines and platforms in the environmentally sensitive area.
Drew Caputo, vice president of land, wildlife and ocean litigation for the environmental group Earthjustice, said it would be more than a decade before these leases affected gas prices.
“This is good for the climate, which cannot cope with new oil and gas developments,” Caputo said. “It’s good for Cook Inlet because offshore drilling is dangerous and destructive. And it’s good for the people of Cook Inlet, including the local people who appreciate the entrance in its natural state. So that’s a really good thing.”
Yet any decision that works against the interests of oil and gas involves political compromises. According to a recent CBS News survey, Mr Biden’s approval rating is the lowest when it comes to the economy and inflation, with 69% of respondents disapproving of his approach to inflation. Sixty-five percent of those polled said they believed the president “could do more” to lower gas prices.
Frank Maciarola, senior vice president of the American Petroleum Institute, said in a statement: “Unfortunately, this is becoming a model – the administration is talking about the need for more supplies and acting to limit them. As geopolitical instability and world energy prices continue to rise, we reiterate their call on the administration to end the uncertainty and act immediately on a new five-year federal offshore leasing program. “
But environmentalists say the climate issue is too important for us to engage in political battles.
“Scientists tell us that the time to switch from fossil fuels to energy is not in years,” Caputo said. “It’s today. We need to end offshore oil leasing.”
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