Posts Tagged ‘DOI’

Washington, DC — Today, U.S. Senator Joe Manchin (D-WV), Chairman of the Senate Energy and Natural Resources Committee, released the following statement on the Department of the Interior’s (DOI) unprecedented delay in releasing a five-year leasing plan. 

“Monday night, the Department of the Interior made it painfully clear – again – that they are putting their radical climate agenda ahead of our nation’s energy security, and they are willing to go to great lengths to do it. The earliest that Interior will release a legally required program for 2023-2028 offshore oil and gas leasing will be the end of this year. That’s 18 months late. This is the first time in our nation’s history that we haven’t had a 5-year leasing program released before the old plan expired. Every other Administration, Democrat and Republican, has managed to follow the law in a timely fashion.

“Let me be clear – this is not optional. The Outer Continental Shelf Lands Act mandates that the Secretary of the Interior “shall prepare” this program to “best meet national energy needs.”

“What is even more terrifying is that on top of this disturbing timeline, Interior refuses to confirm if they intend to actually include any lease sales in the final plan, which is an issue I sounded the alarm about when Secretary Haaland appeared before the Senate Energy and Natural Resource Committee on May 19, 2022. I will remind the Administration that the Inflation Reduction Act also prevents them from issuing any leases for renewables, like offshore wind or onshore solar unless there are first reasonable lease sales for oil and gas that actually result in leases being awarded. And I will hold their feet to the fire on this.” 

Senator Manchin

Plain English; no need for interpretation 😉

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Netherlands climate activist Niklas Hohne succinctly summarizes the “end of fossil fuels” strategy (first quote) that the US Department of the Interior seems intent on implementing in the proposed 5 Year OCS Leasing Plan (second quote). What is DOI’s legislative authority for phasing out offshore oil and gas production? It’s certainly not the OCS Lands Act which calls for the expeditious and orderly development of OCS resources. Neither the EIA nor any other reputable forecaster believes we can even reduce, let alone eliminate, oil and gas consumption in the next 20-30 years.

“The plan was not to build any new infrastructure, because everything new you build has to run for 20 or 30 years to pencil out, long past the point we want to be off fossil fuels,” Hohne said. 

Niklas Hohne, founder of the New Climate Institute (Netherlands) to the Washington Post

The long-term nature of OCS oil and gas development, such that production on a lease can continue for decades makes consideration of future climate pathways relevant to the Secretary’s determinations with respect to how the OCS leasing program best meets the Nation’s energy needs.

5 Year Leasing Program, p.3

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Contrary to some media reports and industry comments, the Inflation Reduction Act does NOT require the Department of the Interior (DOI) to award leases to the high bidder on each Sale 257 tract. The legislation requires DOI to accept the highest valid bid for each tract.

As BOE has previously explained, the 94 carbon sequestration bids were clearly not valid, and leases should not be awarded. These bids accounted for 30.5% of the entire sale in terms of the number of tracts receiving bids. (More on the CCS bids.)

There is also the matter of fair market value. Only 9 of the 214 (non-CCS) tracts received more than one bid and none received more than 2 bids. DOI/BOEM may determine that some of the bids did not pass the fair market value test. Are such bids “valid” under the terms of the IRA legislation? Note that 7 of the 93 high bids submitted at the previous sale (Lease Sale 256, November 2020) were rejected on fair market value grounds. All 7 were single bid tracts.

Lastly, there is the unresolved matter of the decision by Judge Contreras to vacate Sale 257. While the legislation seems to clearly supersede that decision, who knows what might happen next on the litigation front.

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In particular, the Energy and Interior Secretaries would benefit from a visit to a deepwater production facility. They would no doubt be impressed and would be better able to make informed decisions affecting US offshore leasing, exploration, and development.

The offshore workers would be respectful and would welcome the opportunity to discuss the technology, safety precautions, and environmental protection measures.


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Yet the proposed 5 Year OCS leasing program (p. 3) tells us that long term offshore production is not needed because the IEA’s “roadmap to net-zero emissions by 2050 for the global energy sector would require no new investment in fossil fuel supply projects (IEA 2021).”

Does the IEA dictate US energy policy? Dan Yergin has a far better grasp on the realities of energy consumption and transitions.

Oil, discovered in 1859, did not surpass coal as the world’s primary energy source until the 1960s, yet today the world uses almost three times as much coal as it did in the ’60s.

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WASHINGTON (May 19, 2022) — During testimony before the U.S Senate Committee on Energy and Natural Resources today, Secretary of the Interior Deb Haaland confirmed that, despite delays in implementation from the previous Administration, the Interior Department will release the Proposed Program – the next step in the five-year offshore energy planning process – by June 30, 2022, which is the expiration of the current program. A Proposed Program is not a decision to issue specific leases or to authorize any drilling or development.


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Per a very good OGJ update, API, Louisiana, Chevron, bp, Shell, NOIA, the EnerGeo trade group of geophysical contractors, 14 states filing jointly, and the US Chamber of Commerce have submitted briefs to the US Court of Appeals for the District of Columbia Circuit.

Don’t expect a decision soon. The environmental advocacy groups are not scheduled to file their responses until Aug. 26, after which replies can be filed. No decision is expected before November at the earliest.

Previous posts and background information on Lease Sale 257.

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  • Secretary of the Interior Haaland committed to releasing the Proposed Program by June 30, 2022. Will that deadline be met? BOE’s guess is that the deadline will be met. However, the White House Climate Policy Office, which seems to control energy policy, may have other ideas.
  • Number of regions in which lease sales will be proposed: BOE thinks 2, the Gulf of Mexico and Alaska. There is no chance of >2. A GoM only proposed program is possible, but we doubt that Alaska will be eliminated at this early stage.
  • Number of lease sales proposed: BOE guesses a total of 7 sales, 5 in the GoM and 2 in Alaska. The “under” is probably a better bet than the “over,” unless they eschew area-wide GoM sales and propose an increased number of more targeted sales.

For comparison, the previous six 5-Year Programs have included 10-12 GoM sales (11.3 average), 1-8 Alaska sales (4.3 ave.), 0-1 Atlantic sales (0.3 ave.), and no Pacific sales.

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SPR stocks are down 29% from the end of 2010 and 19% from the end of 2020. Continued declines of this magnitude would be a major concern. Should a major crisis arise, offshore production takes years to ramp up, especially given that the lease inventory is at historic low levels and exploration has thus been stymied. Shale producers can respond more quickly to market needs, but transportation bottlenecks, and staffing and equipment availability can limit near-term production growth.

As was noted here in April, the inconsistency of drawing heavily on the SPR while constraining leasing in the adjacent offshore waters is striking. Apparently, there is nothing to worry about because neither the Department of the Interior nor the Department of Energy home pages even mention the words oil or gas. This is pretty remarkable given their broad responsibilities for these vital resources, and the crippling effects of shortages and high prices.

SPR locations

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