President Biden recently reinstated the largest gas and oil lease sale in United States history, virtually steamrolling the need for an environmental review, when he signed the Inflation Reduction Act into law.
Although the Inflation Reduction Act includes several provisions for green energy, which is opposed by the fossil fuel industry, it also demands the Department of the Interior (DOI) to proceed with a series of steps to boost the production of fossil fuels on federal waters and lands. The law specifically requires the reinstatement of Lease Sale 257 by the DOI. The Lease Sale is a massive gas and oil sale spanning 80.8 million acres across the Gulf of Mexico within 30 days of enactment.
“There should be no questions about the issuance of leases from Gulf of Mexico Lease Sale 257. The legislation is clear and mandatory,” said National Ocean Industries Association President Erik Milito.
He continued, “Congress has acted, the leases must be issued, and the lawsuit must be dismissed.”
In November, despite criticism from several environmental groups and Democratic lawmakers, the DOI held the lease sale, which generated more than $191 million in bids for 308 tracts from fossil fuel companies.
Nonetheless, in January, a federal court blocked the sale by ruling in favor of a coalition led by the Sierra Club and Friends of the Earth that argued that the Biden administration failed to evaluate the impacts on the climate from the sale properly.
In March, President Biden and his administration decided against appealing the court’s decision. The American Petroleum Institute (API), an organization representing many segments of the fossil fuel industry, intervened and then petitioned on behalf of the companies affected by the sale. The case is currently before a federal appeals panel.
“While reinstating Lease Sale 257 is a positive step forward for American energy leadership, the legislation as a whole falls well short of addressing America’s long-term energy needs,” said Frank Macchiarola, senior vice president of policy, economics, and regulatory affairs for the API in a statement.
Industry groups pen letter to House leadership
The API and several other industry groups recently wrote a letter to House leadership urging them to reconsider the legislation. The groups took specific issues with the natural gas tax, tax on crude oil, and corporate minimum tax included in the bill.
Additionally, several high-profile Democrats who slammed new fossil fuel leasing on federal waters and lands voted for the Inflation Reduction Act despite prior criticism of Lease Sale 257.
“After this disastrous lease sale was rightfully revoked, the Biden administration had a clear choice to make,” said House Natural Resources Committee Chairman Raul Grijalva, D-Ariz, in March, after the Biden administration chose not to appeal the court ruling that blocked Lease Sale 257.
“Would they appeal the decision and continue to defend the previous administration’s climate denialism and massive giveaways to the fossil fuel industry? Or would they accept the ruling, follow federal environment law and seize this rare opportunity to realign the Interior Department’s offshore leasing program with climate science?” Grijalva continued. “Thankfully, the administration made the right decision.”
The newly-passed Inflation Reduction Act also requires the administration to conduct three offshore lease sales previously canceled in May and links new renewable energy leasing to mandated onshore gas and oil leasing.