As US steps closer to next Gulf of Mexico oil & gas round, NOIA boss urges rethink on lease sale limit

The U.S. Bureau of Ocean Energy Management (BOEM) has made a move to set the stage for the next oil and gas leasing round for offshore acreage in the Gulf of Mexico (GOM) with the anticipated reveal of a draft programmatic environmental impact statement (EIS) for which it is seeking public comments. While this is seen as a step in the right direction by the National Ocean Industries Association (NOIA), it still took the opportunity to urge Congress and the incoming U.S. administration to reevaluate and revise the scaled-back program, which comes with only three lease sales up to 2029.

Bearing in mind that the Inflation Reduction Act (IRA), which is said to have turbocharged renewables’ growth, prohibits BOEM from issuing a lease for offshore wind development unless the agency has offered at least 60 million acres for oil and gas leasing on the Outer Continental Shelf (OCS) in the previous year, the Department of the Interior (DOI) published the ‘2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program’ in December 2023.

This program contains three oil and gas lease sales in the GOM over the next five years, which is described by BOEM as a way to balance the nation’s energy security and climate goals while also identifying the fewest oil and gas lease sales for a five-year program in U.S. history. The three potential oil and gas lease sales are slated for 2025, 2027, and 2029, respectively.

With no lease sales in Atlantic, Pacific, and Alaskan waters, the significantly reduced number of oil and gas lease sales from past leasing programs is envisioned to enable the United States to meet its energy needs and continue the rapid and accelerating transition to clean energy.

The Bureau of Ocean Energy Management has now announced the availability of the Gulf of Mexico regional OCS oil and gas lease sales draft programmatic EIS. This is not only expected to inform the decision for the first GOM oil and gas lease sale within the leasing program but also future ones that are proposed.

“Section 18 of the OCS Lands Act authorizes the Secretary of the Interior to establish a schedule of lease sales for a five-year period by balancing specific factors of OCS regions and selecting the size, timing and location of OCS lease sales that best meet regional and national energy needs and considers the impact of oil and gas exploration on the marine, coastal and human environments,” outlined BOEM.

Furthermore, the programmatic EIS is also anticipated to be used to support post-lease site and activity-specific OCS oil and gas-related analyses and approvals. BOEM intends to make the final programmatic EIS available to the public at least 30 days before the issuance of any decision. The notice of availability for the public output gathering stage is going to be published in the Federal Register in the coming days, starting a 45-day comment period.

Recently, a court decision that was deemed to be a serious risk to oil and natural gas operations in the U.S. Gulf of Mexico, with some fearing that it would have unintended consequences for the offshore wind program as well, was revised, extending the deadline given to the National Marine Fisheries Service (NMFS), part of NOAA, to undertake an environmental review of the effects of oil and gas drilling in the Gulf of Mexico.

In response to the draft programmatic EIS, Erik Milito, NOIA’s President, welcomed the step being made toward the first Gulf of Mexico oil and gas lease sale of the 2024-2029 offshore leasing program, underscoring that the move in such a direction was an affirmation of the Gulf’s “pivotal role” in bolstering the nation’s energy security, boosting economic growth, and fortifying the U.S. geopolitical strength.

Milito elaborated: “While this advancement is welcome, we believe this process should have been initiated concurrently with the development of the full 2024-2029 Leasing Program to avoid delays in oil and gas leasing activities. The Gulf of Mexico is more than just an energy source; it’s a cornerstone of economic stability, energy innovation, job creation, and environmental stewardship.

“The Gulf of Mexico oil and gas program shines as the primary funding mechanism for conservation and recreation efforts, including funding for our treasured national parks. As we look forward to this lease sale, NOIA stresses the importance of maximizing available acreage.”

For NOIA’s boss, the Gulf of Mexico’s strategic value lies in its capacity to “deliver energy efficiently, support thousands of American jobs, and offer a pathway to lower carbon energy solutions on a global scale.” He expands on his rationale behind such a claim by pointing out that oil production from the GOM is recognized by various independent studies to be among the lowest carbon-intensive barrels in the world.

Milito underlined: “It’s clearly better to produce our energy from the Gulf of Mexico than for the global market to rely upon foreign sources with higher emissions and weaker environmental performance. Furthermore, we urge Congress and the incoming administration to reassess the limited schedule of only three lease sales in the current offshore program and take steps to restore our leasing program to bolster  investment in U.S. projects.

“A more robust schedule would better reflect the Gulf’s indispensable role in our energy landscape and support both energy development and environmental stewardship. NOIA is committed to working with all stakeholders to advocate for policies that uphold the Gulf of Mexico as a key pillar in energy security, economic progress, and total U.S. energy leadership.”

Meanwhile, climate and environmental activities continue to push against even the currently reduced number of offshore lease sales. They see further expansion of offshore drilling as a dangerous road that would lock the United States into more decades of fossil fuel extraction at the expense of the climate, coastal communities, the environment, and marine life.

In contrast, Milito is adamant that an enlarged leasing schedule under the next administration and Congress would strengthen energy security, provide a steady revenue stream for critical investments, and cement America’s role as a global energy leader.

NOIA emphasizes that its boss, who portrays offshore energy as “an untapped goldmine,” believes collaboration between offshore energy industries does not stop at oil, gas, and wind since the deployment of such an approach across the board is presented as the path to strengthen the U.S. energy independence.

This is interpreted to position the nation to take the lead in emerging offshore technologies, like carbon capture and storage and critical mineral extraction, which are deemed to be the keys to a “strong” energy future with nationwide ripple effects, bringing more jobs and propelling innovation.