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Interior Department Seeks Comment on Five-Year Offshore Oil and Gas Leasing Program
Practical Law Legal Update w-036-1760 (Approx. 4 pages)
Interior Department Seeks Comment on Five-Year Offshore Oil and Gas Leasing Program
by Practical Law Finance
| Published on 06 Jul 2022 • USA (National/Federal) |
The Department of the Interior is seeking comment on a proposed five-year offshore oil and gas leasing program, accomplishing its second of three steps to finalize and implement the program.
On July 1, 2022, the Department of Interior's (DOI) Bureau of Ocean Energy Management (BOEM) released the 2023-2028 National Outer Continental Shelf Oil and Gas Leasing Proposed Program (2022 Proposed Program), a follow-up to the broader draft proposed program (2018 Proposed Program) released during the Trump administration.
According to the DOI's statement, the 2022 Proposed Program is meant to "determine whether or how many offshore oil and gas lease sales to hold over the next five years." The 2022 Proposed Program differs from the 2018 Proposed Program by removing federal waters off the Atlantic and Pacific coasts from consideration. The BOEM seeks comment on potential sales only in the Gulf of Mexico and the Cook Inlet off the coast of Alaska, limiting the number of proposed potential sales from the 47 in the 2018 Proposed Program to 11. For more information on the 2018 program, see Legal Update, DOI Announces Plan to Modify its Oil and Gas Leasing Program to Allow Offshore Drilling in Nearly All US Waters.
Background
The Secretary of the Interior is required under the Outer Continental Shelf Lands Act (OCSLA) to prepare an oil and gas leasing program that consists of a five-year plan which specifies when and where lease sales are to be held (43 U.S.C. §1344(a)). Under OCSLA, the lease sales schedule for a five-year plan must take into account the following eight factors:
- Geographical, geological, and ecological characteristics of the outer continental shelf (OCS) regions.
- Equitable sharing of developmental benefits and environmental risks among regions.
- The relative needs of national and regional energy markets.
- Other uses of ocean resources and the OCS.
- Expressed industry interest in oil and gas development.
- Laws, goals, and policies of affected states as identified by governors.
- Environmental sensitivity and marine productivity of different areas of the OCS.
- Environmental and predictive information for different areas of the OCS.
Comments must be received on the 2022 Proposed Program during a 90-day period starting on July 8, 2022. After the BOEM has received public comment on the 2022 Proposed Program, it will establish a proposed final program and final programmatic environmental impact statement (Final Proposed Program), including a discussion of the size, timing, location, and number of potential lease sales in the Final Proposed Program. The proposed program contemplates one Gulf of Mexico sale in 2023 and 2028, two sales in the Gulf of Mexico in each of 2024, 2025, 2026, and 2027, and one sale in the Cook Inlet in 2026. However, the Final Proposed Program may include zero to none of the 11 potential lease sales.
Practical Implications
The 2022 Proposed Program has been criticized by both:
- Environmental groups concerned that these sales would undermine the Biden administration's goal to reduce greenhouse gas emissions (see Practice Note, Biden Administration Energy and Climate Change Policies and Regulations: 2022 Tracker and Legal Update, DOI Releases Report Which Found Significant Shortcomings in the Federal Oil and Gas Leasing Program).
- Industry groups as inadequate and ill-considered given the high cost of oil and gas.
For more information on oil and gas leasing on federal land, see Practice Note, US Oil & Gas Industry: Overview.