- The Biden administration proposed the fewest offshore oil and gas drilling leases in history.
- The White House plan called for the sale of a maximum of three leases over the next five years.
- The move satisfies a requirement in the Inflation Reduction Act to expand offshore wind production.
Energy stocks sank on Friday after the Biden administration proposed to allow a maximum of three sales of oil and gas drilling leases in the Gulf of Mexico over the next five years, the fewest in history.
As part of the provisions of the Inflation Reduction Act of 2022, three lease sales are the minimum number that Washington must offer in order to continue expanding offshore wind power development through 2030. The law requires that at least 60 million acres of oil and gas drilling leases be made available in any one year before any wind leases can be given.
The lease tradeoff proviso came to secure the bill’s support from West Virginia Senator Joe Manchin, whose vote was necessary to get it passed. The Department of Interior noted that the number of potential oil and gas leases and areas considered for potential lease sales had been slashed from the Trump administration’s proposed 47 off all coastal areas of the U.S.
Interior Secretary Deb Haaland said the plan “sets a course for the Department to support the growing offshore wind industry and protect against the potential for environmental damage and adverse impacts to coastal communities.”
Mike Sommers, president and CEO of the American Petroleum Institute, blasted the decision, calling the lease program “restrictive.” He argued that at a time of high inflation, “the Biden administration is choosing failed energy policies that are adding to the pain Americans are feeling at the pump.”
Shares of oilfield services providers SLB (SLB), Halliburton (HAL), and Baker Hughes (BKR) fell over 3% following the news.
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