The Biden administration has delayed a key offshore oil and gas lease sale weeks after providing oil sanctions relief to the socialist regime of Venezuelan dictator Nicolas Maduro.
The Bureau of Ocean Energy Management (BOEM) announced Thursday that it is indefinitely postponing the sale of offshore lease area 261 in the Gulf of Mexico while it awaits a ruling from a federal appeals court, less than a week before the previously scheduled latest possible date for the Inflation Reduction Act (IRA)-mandated sale. BOEM’s decision to delay the lease follows the Biden administration’s move to provide oil sanctions relief to the Maduro regime in exchange for its pledge to welcome fair and monitored elections next year.
The Maduro regime may have already violated its end of the agreement in spirit, as the country’s top court recently suspended the results of the opposition’s primary election while it conducts a wide criminal investigation into the election’s organizers. The Biden administration has so far not committed to reinstating the sanctions, as it reserves the right to do in the event that the Maduro government does not hold up its end of the deal.
“As a result of the order issued by the United States Court of Appeals for the Fifth Circuit on October 26, 2023, in Louisiana v. Haaland (Case No. 23-30666), the Bureau of Ocean Energy Management (BOEM) is postponing Lease Sale 261, which was originally scheduled for September 27, 2023, and later scheduled for November 8, 2023, in response to judicial orders. Until the court rules, BOEM cannot be certain of which areas or stipulations may be included in the sale notice,” the agency said in a statement. “Potential bidders in Lease Sale 261 should not submit bids until BOEM provides additional instruction.”
U.S. District Judge James Cain of the Western District of Louisiana issued a preliminary injunction in September against the government’s move to reduce the area of an offshore oil lease in the Gulf by about 6 million acres and essentially impose restrictive protections for the Rice’s whale in the region. That ruling is under appeal, and BOEM has postponed the lease sale pending the outcome of that challenge.
“There are zero legal or operational constraints preventing Interior from proceeding with the lease sale pursuant to the October 5th Final Notice of Sale,” Erik Milito, president of the National Ocean Industries Association (NOIA), said of the postponement. “The delay is especially concerning in light of the geopolitical upheaval and fragility in oil markets due to burgeoning armed conflicts in multiple oil-producing regions. A competent national security posture must exemplify strength and promote U.S. oil and gas production, as opposed to overtures to dictators and despots … rather than capitulate to the demands of activist litigants and circumvent the regulatory process, the Administration should resume oil and gas leasing in the Gulf of Mexico.”
Offshore oil production in federally-controlled Gulf waters accounted for about 15% of total U.S. crude oil output in 2021, according to the U.S. Energy Information Administration. As the Gulf of Mexico’s oil is considered less carbon-intensive to produce than oil from most other regions, diminished production in the affected zone could be replaced by more carbon-intensive barrels from elsewhere in the world, according to the American Petroleum Institute.
Neither BOEM nor the White House responded immediately to requests for comment.
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