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WHERE OFFSHORE LEASING NOW STANDS: Oil and gas interests say they don’t know what comes next in the process or what recourse they have after the Interior Department’s decision to pull the plug on the three remaining potential offshore lease sales. One leading industry group is saying the decision will lead to further uncertainty at a time when record fuel prices signal the need for more production.
Interior circulated a statement last night confirming it “will not move forward” with either Sale 258 covering acreage in Alaska’s Cook Inlet or the two remaining Gulf of Mexico lease sales provided for in the current offshore plan.
Interior spokesperson Melissa Schwartz said Cook Inlet was called off due to lack of interest, while the others were called off because of “delays due to factors including conflicting court rulings that impacted work on these proposed lease sales.”
Erik Milito, president of the National Ocean Industries Association, disputed Interior’s reasoning on the Gulf sales in particular and said the decision leaves energy companies in a “standstill,” as there will be no new sales this year and because DOI has yet to release a draft five-year leasing plan to replace the current one, which expires next month.
Milito said the industry is looking to increase production there, which has fallen to about 1.7 million barrels per day from the 2 million bpd it reached before the pandemic.
“You’ve got to continue to explore, develop, and produce when it comes to oil and gas, because otherwise, you're not going to be able to replenish those expected declines,” Milito told Jeremy.
“The way to address that is to make sure that we’re putting policies forward to develop the supplies to meet that demand,” he also said. “The problem is, we’re in a standstill, and companies are now having to make decisions about where to invest globally.”
What’s next: Schwartz said in March the department “is actively developing its five-year plan for the offshore program” and called attention to 8.29 million currently leased but non-producing offshore acres available to companies for development.
The department told Jeremy last week there is no update as to when it will introduce a draft plan laying out prospective offshore sales for the next five years.
Congressional Republicans have introduced a number of bills over the last year that would set deadlines by which the Biden administration must publish a new plan and/or require the Interior Department to hold each of the three sales it just called off.
In the meantime, a handful of Democrats have asked the administration to get its new five-year plan together, too, using high fuel prices and the need for “energy security” as justifications.
Meanwhile, environmental groups advocating for an end to the leasing program are keeping the pressure on President Joe Biden to keep to his word and to end the drilling and leasing as he promised during the campaign, with several leading groups arguing he isn’t being aggressive enough.
Hallie Templeton, legal director of Friends of the Earth, has been critical of the administration’s decision to hold any sales at all. She welcomed Interior’s decision on these three sales but took issue with Interior’s reasoning.
“The administration’s reliance on ‘industry interest’ here continues to give me heartburn that the administration is too willing to act at Big Oil’s behest, rather than approaching risky fossil fuel development with the extreme caution it deserves,” said Templeton, who wants the administration to issue a five-year plan without any lease sales in it.
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BOEM AWARDS WIND LEASES OFF CAROLINA COASTS: Offshore wind is still getting love where oil and gas isn’t.
The Interior Department announced French energy giant TotalEnergies and North Carolina-based utility Duke Energy as the winners of its Carolina Long Bay offshore wind auction. TotalEnergies Renewables USA won rights to develop 54,937 acres at a bid of $160 million, while Duke Energy secured 55,154 acres at a price of $155 million.
The administration hopes to stand up 30 GW of offshore wind power by 2030, and there were 18 active commercial wind energy leases in the Atlantic as of February, according to the Interior Department. Those 18 leases could support approximately 27 GW of power to supply if fully developed.
Competing emotions: Milito of NOIA, which represents companies doing offshore mineral development as well as wind ventures, said the Carolina Long Bay sales will further improve investors’ confidence in offshore wind’s viability but said “that same passion and that same level of excitement that this administration has for offshore wind should be there for offshore oil and gas.”
UTAH DELEGATION CHALLENGING BIDEN ON MONUMENT CLAIMS: Republican Utahns in Congress are accusing Biden of misrepresenting support for his decision to add back lands covered by the Bears Ears National Monument, which former President Donald Trump had cut.
Rep. John Curtis, chairman of the Conservative Climate Caucus, and Sens. Mike Lee and Mitt Romney disputed Biden’s pronouncement on Earth Day that the decision “got some of the conservative Republicans to support it in their state.”
“The White House shows a complete lack of understanding of Utah’s national monuments, and we call on President Biden to correct the record on his false statement,” the lawmakers said, noting the White House provided them with this article from the Salt Lake Tribune as the for source of Biden’s statement, which does not name local Republican support for the move.
The Trump administration reduced Bears Ears, which President Barack Obama established as a monument, by 85% and provided for mineral and geothermal leasing there. He also reduced lands of Utah’s Grand Staircase-Escalante National Monument by 50%, both of which Biden then restored in October.
Democrats supported Biden’s decision, although Republicans in the state, including Gov. Spencer Cox, did not.
SAUDI ARAMCO OVERTAKES APPLE AS WORLD’S MOST VALUABLE COMPANY: The Saudi oil provider has surpassed Apple to become the world’s most valuable company. Market valuations for Saudi Aramco came in at just under $2.43 trillion, compared to Apple, which fell more than 5% to a $2.37 trillion valuation, according to FactSet.
The news comes as energy stocks and prices have soared in recent months, with investors selling off equities in other industries amid concerns about current economic conditions. But these concerns have been a boon for companies like Saudi Aramco – prompting a 27% increase in Aramco stock in 2022 alone, the Examiner’s Christopher Hutton reports.
CLEANER AIR LED TO MORE ATLANTIC STORMS? A new study released by the National Oceanic and Atmospheric Administration found that cleaner air in the U.S. and Europe has led to higher storm activity in the Atlantic. The study examined changes in regionalized air pollution and related storm activity in recent decades. And while scientists found that pollution in the U.S. and Europe decreased by 50% in recent decades, this cleaner air was linked to a 33% increase in Atlantic storm formation.
“Hurricanes need warm water — which is warmed by the air — for fuel and are harmed by wind shear, which changes in upper level winds that can decapitate storm tops. Cleaner air in the Atlantic and dirtier air in the Pacific, from pollution in China and India, mess with both of those,” NOAA hurricane scientist Hiroyuki Murakami told the AP.
Associated Press Most Great Barrier Reef coral studied this year was bleached
E&E News Why Biden isn’t preaching energy conservation
TUESDAY | MAY 17
12:00 p.m. The Environmental Law Institute will host a remote webinar event where experts will break down the SEC’s climate-related risk disclosure rule.