U.S. Proceeds with Gulf of Mexico Oil Auction Following Delays
Posted 20/12/2023 12:38
After encountering delays attributed to legal challenges concerning the impact on an endangered whale species, the Biden administration is set to conduct an auction for oil and gas leases in the Gulf of Mexico on Wednesday. This auction, covering over 72.7 million acres on the Outer Continental Shelf, includes areas previously earmarked for protection due to the habitat of the endangered Rice's whale.
The auction, commencing at 9:00 a.m. in New Orleans, will mark a crucial opportunity for oil and gas companies to bid on Gulf of Mexico acreage, with no similar auctions anticipated until 2025, as outlined in the administration's five-year schedule. Despite the Biden administration's efforts to curtail new oil and gas leasing in alignment with climate change goals, federal regulations linking offshore wind leasing to oil and gas drilling rights have influenced this decision.
The auction process, managed by the U.S. Bureau of Ocean Energy Management (BOEM), faced legal complications when a federal judge mandated the expansion of the sale to include the disputed 6 million acres. This expansion was contested by oil and gas companies, leading to the judge's order.
Pre-sale statistics indicate that approximately 2.4% of the offered acreage received bids from 20 companies. Notably, over three-quarters of the tracts that garnered bids are situated in water depths exceeding 800 meters (2,625 feet).
President Joe Biden's administration views the development of offshore wind as a crucial element in the decarbonization of the U.S. power sector. The recent auction follows global commitments, with the U.S. and nearly 200 other nations agreeing to reduce fossil fuel consumption to mitigate the adverse impacts of climate change.