US Interior nixes next three offshore lease sales for Gulf of Mexico, Alaska's Cook Inlet

The US Interior Department has canceled its next three offshore oil and gas lease sales on court-related delays affecting two Gulf of Mexico auctions and a lack of interest in Alaska's Cook Inlet, a spokeswoman said May 12.

Melissa Schwartz confirmed Interior would not move forward with Alaska's Lease Sale 258 and the Gulf of Mexico's Lease Sales 259 and 261.

The Gulf of Mexico auctions were removed as "a result of delays due to factors including conflicting court rulings that impacted work on these proposed lease sales," Schwartz said.

They were the final three sales listed on the 2017-2022 offshore leasing plan.

'Hands were tied'

Interior announced in April it would restart lease sales for onshore federal acreage, despite the White House saying President Joe Biden remained committed to a ban on new drilling on federal lands and waters. Interior's "hands were tied" by legal requirements to restart the onshore auctions, press secretary Jen Psaki said at the time.

The November 2021 results of Lease Sale 257, which would have opened up some 80 million acres of the Gulf of Mexico, were canceled by a US judge on climate concerns.

Soaring oil prices

Oil and gas industry supporters blasted the move to strike the offshore lease sales, saying it comes at the wrong time as the world tries to wean itself off Russian energy, as US pump prices soar and US consumers grapple with the highest inflation in 40 years.

"The lack of new lease sales will lower future supplies, which will keep energy prices high and drive inflation for years to come," said Marty Durbin, president the US Chamber of Commerce's Global Energy Institute. "While some in the [Biden administration] have called for more domestic production, this action sends exactly the wrong signal to producers and markets and is contrary to that goal."

Sees ability to hold sales

National Ocean Industries Association President Erik Milito said he was not surprised by the move, pointing to Biden's March 2020 promise on the campaign trail to end new federal oil and gas development.

"The administration absolutely has the ability to hold these lease sales," Milito said. "They also have the ability to prepare a new leasing program for the 2022-2027 program. This has been proven by the actions of all past administrations, including the Obama White House."