Industry groups and some Republicans are disputing the Biden administration's justification for pulling the plug on the offshore lease sale in Alaska's Cook Inlet, which it said was canceled "due to lack of industry interest."
Both have argued energy companies and other parties did want the sale to move forward and that the only way to gauge interest in the sale properly would have been to hold it and allow energy companies to offer bids.
DAILY ON ENERGY: GREEN GROUPS JUMP INTO SOLAR FIGHT
The Interior Department confirmed late Wednesday it would not move forward with work on three offshore lease sales, one for acreage in Cook Inlet and two off the Gulf Coast, the last outstanding sales outlined in the current five-year offshore leasing program.
Kara Moriarty, president and CEO of the Alaska Oil and Gas Association, said the administration's reasoning on Cook Inlet was "disingenuous" and pointed to comments she filed with the Bureau of Ocean Energy Management in December in which she expressed her organization's support for the sale.
"We certainly said, 'Hey, we support having a lease sale move forward,' and as a trade association, we don't put out any comments unless, obviously, the majority of our members support that," she told the Washington Examiner.
Moriarty also echoed the response of Sen. Dan Sullivan (R-AK), who criticized the cancellation and said "only holding a lease sale" would ultimately illustrate companies' level of interest.
"If you really want to know if a company is interested in picking up leases, hold the lease sale. There's nothing that says you can't hold it and then nobody show," she said.
Moriarty also likened competition over acreage to a game of poker in which energy companies are often not prepared to "show their hand" and reveal publicly whether they intend to bid or not beforehand.
The Interior Department did not disclose how it determined the level of industry interest to be lacking, but it isn't a novel justification, something the Bureau of Ocean Energy Management noted in an update to the lease sale's webpage published Friday.
The Interior Department canceled a lease sale for Cook Inlet in 2011 for the same reason. Then, in 2017, the department went on to award 14 tracts covering 76,615 acres in the inlet.
As for the two Gulf lease sales canceled Wednesday, the administration said it will not move forward because of “delays due to factors including conflicting court rulings that impacted work on these proposed lease sales.”
The administration is currently engaged in several active lawsuits affecting the leasing program. It is appealing a ruling delivered last June that enjoined the government from implementing a blanket pause on both onshore and offshore leasing.
Judge Terry Doughty, a Trump appointee, ruled in that case that federal law requires the government to hold lease sales, and administration officials have cited that ruling as a justification for moving forward with lease sales since.
In another case, the American Petroleum Institute is appealing a federal judge's ruling that threw out the lone offshore sale carried out last year.
The National Offshore Industries Association argued that the sum of litigation should not have disrupted the sales. BOEM cut the process off before completing draft environmental reviews for either sale.
"They absolutely could have done the environmental work for those lease sales," said Erik Milito, NOIA's president. "There was absolutely nothing that held them back when it comes to the court decisions, or the underlying statutes, when it came to getting this work done."
The Biden administration has been under competing pressures in recent months regarding how to move forward on the leasing program with oil and gas prices high and rising to record levels.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Environmental groups have been lobbying the administration to keep President Joe Biden's campaign promise of ending drilling on federal lands and waters as a way to mitigate climate change, arguing the government has the discretion to hold no sales at all.
Some are also making the case that the Interior Department's next, and currently delayed, five-year plan for the offshore program, which the department must finalize in order to hold lease sales, should simply be published without any lease sales in it.
Meanwhile, Republicans and some Democrats want Biden to make more lands and waters available to curb prices and reduce price shocks.
Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV) said the three cancellations are "just awful."