Illustration. Source: BOEM

Stage set to hold U.S. Gulf of Mexico oil & gas lease sale next month

The U.S. Bureau of Ocean Energy Management (BOEM) has published a final notice to hold the next offshore oil and gas lease sale for acreage in the Gulf of Mexico (GOM) in March 2023, as required by the Inflation Reduction Act (IRA) of 2022.

Illustration. Source: BOEM

This comes after the Bureau of Ocean Energy Management announced in January 2023 that it had prepared a Final Supplemental Environmental Impact Statement (EIS) for two Gulf of Mexico oil and gas lease sales – 259 and 261 – to comply with the Inflation Reduction Act of 2022. BOEM’s announcement followed a Draft Supplemental EIS from October 2022 when BOEM disclosed the next steps for oil and gas leasing on the Outer Continental Shelf (OCS), including a proposed sale for the Gulf of Mexico region and completion of an environmental review for Cook Inlet, offshore Alaska.

As a reminder, BOEM reinstated in September 2022 the first oil and gas lease sale held under the Biden administration for acreage in federal waters in the Gulf of Mexico, which was invalidated by a U.S. judge in January 2022 on the grounds of failure to properly account for the lease sale’s climate change impact. This was done in a bid to comply with the Inflation Reduction Act (IRA) of 2022, which President Joe Biden signed into law in August 2022.

The energy bill, which is expected to open the door to more federal onshore and offshore lease sales, outlined that it would reinstate the vacated Gulf of Mexico Lease Sale 257 and hold the cancelled Lease Sales 258, 259, and 261. The Inflation Reduction Act mandates lease sales 259 and 261 to be held no later than 31 March 2023 and 30 September 2023, respectively.

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In an update on Friday, 24 February 2023, the Bureau of Ocean Energy Management disclosed it would hold the Gulf of Mexico oil and gas Lease Sale 259 on 29 March 2023. This lease sale will offer approximately 13,600 blocks on 73.3 million acres in the western, central, and eastern planning areas on the U.S. Outer Continental Shelf.

The opening and reading of the bids for this lease sale will begin at 9 a.m. Central Daylight Time and all bids need to be received via the U.S. Postal Service no later than 10 a.m. Central Daylight Time on 28 March 2023. BOEM claims that its proposed economic terms are designed to encourage “diligent development while ensuring fair market value” to taxpayers and maintaining compliance with the IRA.

Announcement of GOM lease sale ‘a good first step’ 

In a separate statement, Consumer Energy Alliance (CEA), the energy and environmental advocate for families and businesses, said that the Bureau of Ocean Energy Management’s announcement about holding a Gulf of Mexico offshore oil and natural gas lease sale in March 2023, was “a good first step” while the scheduling of the sale should not have required a second Act of Congress.

David Holt, CEA President, remarked: “It has taken an Act of Congress, but the Department of the Interior is finally holding an offshore oil and gas lease sale that will send great signals to global energy markets to help bring Americans lower energy prices and improve energy security. The sale will also help the U.S. increase output from what is proven to be one of the least carbon-intensive production areas in the world while employing American workers. There have been far too many delays to federal oil and gas leasing, which is surprising from an environmental standpoint because the Gulf’s production is far cleaner than anywhere else in the world.

“There is no argument, even from President Biden, that oil and natural gas will be needed for the foreseeable future. Our task must be meeting our basic energy needs through a diverse variety of resources – including oil and gas – while pressing forward to meet our environmental goals.  Keeping our most environmentally sound oil and gas basin in play to meet current and future demand is critical for environmental progress, as is the addition of offshore wind leasing in the Gulf.”

Holt further added: “The upcoming oil and gas lease sale is a good start that should be quickly followed by the announcement of future lease sales in the Gulf as is legally required under the Congressionally-mandated five-year leasing plan. The delays in releasing this plan remain a concern to all Americans. This plan should not be viewed as the bureaucratic equivalent of being forced to eat your vegetables at time when Americans are struggling with high inflation and energy prices.”