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Oil industry disputes Biden admin’s ‘disingenuous’ reasons for killing Alaska offshore lease sale

May 15, 2022 | | Print Article

As prices at the gas pumps continue to soar, groups from the oil and gas industry have joined some Republicans in disputing claims from the Interior Department (DOI) that the Alaskan offshore lease sale in Cook Inlet was scrubbed “due to lack of industry interest.”

Three offshore lease sales — the last such sales to be outlined in the Interior Department’s five-year offshore leasing program — were confirmed as canceled by the department on Wednesday, including “one for acreage in Cook Inlet and two off the Gulf Coast,” the Washington Examiner reports.

According to Kara Moriarty, president and CEO of the Alaska Oil and Gas Association, the Biden administration’s rationale was “disingenuous.”

Citing comments supporting the sale that she filed on behalf of her organization with the Bureau of Ocean Energy Management (BOEM) in December, Moriarty said the trade association wanted the sale to move forward.

“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 said.

The level of interest, according to Moriarty, will only be known if the sale is held — a sentiment she shares with Sen. Dan Sullivan (R-AK).

“If you really want to know if a company is interested in picking up leases, hold the lease sale,” she said. “There’s nothing that says you can’t hold it and then nobody show.”

Competing for acreage, Moriarty said was like a game of poker and energy companies do not like to “show their hand” by publicly revealing ahead of time whether or not they intend to bid.

While the DOI didn’t reveal how it came to the conclusion that the industry wasn’t sufficiently interested in the sale to move forward with it, the  Examiner notes that it isn’t the first time it has used the excuse.

In 2011, the DOI canceled a Cook Inlet lease sale claiming a lack of interest, before awarding 14 tracts, representing 76,615 inlet acres, in 2017.

The canceled sales in the Gulf, however, were a result 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,” the Examiner reports. “It is appealing a ruling delivered last June that enjoined the government from implementing a blanket pause on both onshore and offshore leasing.”

In that case, Judge Terry Doughty ruled that “federal law requires the government to hold lease sales,” a ruling the administration has since used to justify moving forward with lease sales.

As for the one offshore sale that did happen last year, a federal judge threw it out. The American Petroleum Institute is currently appealing the ruling.

According to the National Offshore Industries Association (NOIA), the lease sales should not have been disrupted by the amount of litigation  surrounding them. BOEM, according to the Examiner, “cut the process off before completing draft environmental reviews for either sale.”

“They absolutely could have done the environmental work for those lease sales,” NOIA President Erik Milito said. “There was absolutely nothing that held them back when it comes to the court decisions, or the underlying statues, when it came to getting this work done.”

With consumers plastering Biden “I did that” stickers on gas pumps across the nation and the midterm elections rapidly approaching, the administration is in a quandary.

Environmental groups want President Biden to make good on his campaign promise to end drilling on federal lands and waters, while Republican — and even some Democrats — are urging the administration to open more land is available to drill in order to bring prices down, along with our dependence on foreign nations to meet U.S.  needs.

According to Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV), the trio of lease sale cancellations are “just awful.”

Melissa Fine
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