Biden Should Release Delayed Offshore Leasing Plan If He Truly Wants More Oil Production

For months, American families and businesses have grappled with the reality of high energy prices, with official explanations ranging from the ongoing effects of Russia’s war in Ukraine to the lingering impact on production from COVID-19.

Hope has remained that process will return to something resembling normal, but oil prices aren’t likely to start falling anytime soon. The economy remains slow, market supply is tight, and the OPEC+ cartel has announced additional production cuts beginning in May.

That is unwanted news for consumers. For the Biden administration, on the other hand, it should be a clear signal that we cannot keep subjecting consumers to this rollercoaster of prices when we have the tools to address it. Instead of hoping market conditions change, we should focus on bolstering domestic production to create greater energy security and protect Americans from market volatility long term.

For months, the administration has publicly said it’s doing everything it can to bring down gasoline prices, but the reality is a different story altogether. The Department of Interior (DOI) is required by law to release a five-year leasing plan for offshore leasing of oil and natural gas deposits, but DOI is expected to be at least 18 months late. There’s no assurance that the offshore leasing plan will include any lease sales. The administration’s failure to provide a plan for offshore leasing, a key part of America’s energy security, creates an uncertain and gloomy outlook.

Recent developments tell the full story. Last month marked the first oil and gas lease auction offered in the Gulf of Mexico since November 2021. However, the sale wasn’t a product of standard DOI operations but a requirement imposed by the Inflation Reduction Act to reinstate offshore lease sales canceled by the administration. The fact that the required sale attracted a record number of bids among sales in the last six years demonstrates the market’s hunger for production opportunities, an appetite whetted by the administration’s slow-pedaling of offshore energy development.

It would be easy for the casual observer to interpret the sale as a sign of the administration’s support for offshore production, but the record sale was little more than a red herring. The United States has no active offshore leasing program despite a 1978 law mandating that the Secretary of the Interior “shall prepare” this program to ‘“best meet national energy needs.” In March, though, DOI told the court it needs the rest of 2023 to analyze the five-year program it let expire in 2022.

President Biden acknowledged himself in his State of the Union that we’ll need oil and natural gas for the foreseeable future but hasn’t acted on those words. The Biden administration has leased fewer acres for drilling offshore and on federal land than any other administration back to the end of World War II. As the Wall Street Journal characterized it, the administration “spurns resources his predecessors relied on to boost U.S. energy production.” That includes blocking oil production on federal lands and waters that provide a quarter of total U.S. production.

This neglect has serious market consequences. Offshore development can take nearly a decade to bring online and is capital intensive. Estimates are that oil and gas investment is down 40 percent because of policy uncertainty. The resulting idle cash is likely being used by firms to consolidate rather than build a new capacity, which could squeeze out small or struggling oil and gas companies. Lack of development also deprives the Gulf of Mexico region of millions of dollars in family-wage jobs and state revenues.

If the United States doesn’t act to meet energy demand with new production, the gap will simply be filled by less environmentally conscious suppliers like OPEC and its partners, many of which aren’t friendly toward U.S. interests. Moreover, our allies who’ve counted on the U.S. to free them from Russia’s energy stranglehold will be forced to look elsewhere for supply. That’s a break with U.S. tradition, as leasing was at record highs in the 1970s and early 1980s under presidents Carter and Reagan when geopolitical oil crises arose.

If the administration claims it wants more oil production, a good start would be releasing a five-year leasing program that catalyzes safe, robust offshore development. There’s been enough talk. It’s time to act.