Industry Challenges Department of the Interior’s Justification for Cancellation of Offshore Lease Sale in Alaska

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IIndustry groups and some Republicans are challenging the Biden administration’s justification for ending the offshore lease sale in Alaska’s Cook Inlet, which it says was canceled ‘due to lack of industry interest. “.

Both argued that the energy companies and other parties wanted the sale to go ahead and that the only way to properly assess the interest in the sale would have been to retain it and allow the energy companies to offer offers.

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The Home Office confirmed on Wednesday night that it would not go ahead with work on three offshore lease sales, one for acreage in Cook Inlet and two off the Gulf Coast, the latest ongoing sales outlined in the current five-year offshore charter program.

Kara Moriarty, president and CEO of the Alaska Oil and Gas Association, said the administration’s reasoning on Cook Inlet was “dishonest” and pointed to comments she filed with the Bureau of Ocean Energy. Management in December in which she expressed her organization’s support for the sale. .

“We certainly said, ‘Hey, we support advancing a lease sale’ and as a trade association we don’t comment unless, of course, the majority of our members support it,” said she told the Washington Examiner.

Moriarty also echoed the response of Sen. Dan Sullivan (R-AK), who criticized the cancellation and said “only holding a lease sale” would ultimately illustrate the level of corporate interest.

“If you really want to know if a business is interested in getting leases, arrange for the sale of the lease. Nothing says you can’t keep it and nobody shows up,” she said.

Moriarty also compared acreage competition to a game of poker in which energy companies are often unwilling to “show their hand” and publicly reveal whether or not they intend to bid ahead of time.

The Department of the Interior has not disclosed how it determined the level of industry interest was lacking, but that is not a new rationale, which the Bureau of Ocean Energy Management noted in a update on the lease sale web page published on Friday.

The Ministry of the Interior canceled a lease sale for Cook Inlet in 2011 for the same reason. Then, in 2017, the department allocated 14 parcels covering 76,615 acres in the cove.

Regarding the two Gulf lease sales canceled on Wednesday, the administration said it would not proceed due to “delays due to factors such as conflicting court rulings that have had a impact on the works on these proposed lease sales”.

The administration is currently engaged in several active lawsuits regarding the leasing program. He is appealing a decision handed down last June which ordered the government to implement a general pause on onshore and overseas leasing.

Judge Terry Doughty, a Trump appointee, ruled in the case that federal law requires the government to hold lease sales, and administration officials cited the ruling as justification for moving forward with the case. lease sales since.

In another case, the American Petroleum Institute is appealing a federal judge’s decision to reject the only offshore sale made last year.

The National Offshore Industries Association argued that the sum of the disputes should not have disrupted sales. BOEM halted the process before completing environmental review projects for either sale.

“They absolutely could have done the environmental work for those lease sales,” said Erik Milito, president of NOIA. “There was absolutely nothing that held them back in terms of court rulings or underlying laws, when it came to doing this work.”

The Biden administration has come under competing pressure in recent months over how to push forward the lease program with oil and gas prices high and reaching record highs.

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Environmental groups have pressured the administration to keep President Joe Biden’s campaign promise to end drilling on federal lands and waters to mitigate climate change, arguing the government has the power discretion not to proceed with any sale.

Some are also arguing that the Home Office’s next, currently delayed, five-year plan for the offshore program, which the department must finalize in order to hold lease sales, should simply be released without any lease sales.

Meanwhile, Republicans and some Democrats want Biden to make more land and water available to rein in prices and reduce price shocks.

Chairman of the Senate Energy and Natural Resources Committee, Joe Manchin (D-WV) mentioned all three cancellations are “just awful”.

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