Where’s the Beef? Democratic Senators Want an Offshore Oil and Natural Gas Plan Without Any Lease Sales
In a letter to Interior Secretary Deb Haaland, a group of Democratic U.S. senators don’t appear to understand the purpose of the five-year outer continental shelf oil and natural gas leasing program that’s required by law.
The senators, overwhelmingly representing states with no offshore oil and gas development, are lobbying the administration to leave out lease sales from the plan, writing:
“We write to you today regarding the recent announcement that the Bureau of Ocean Energy Management (BOEM) within the Department of the Interior (DOI) is developing a new five-year outer continental shelf (OCS) oil and gas leasing program, with a proposed program expected by June 30, 2022. We urge you to protect our coastal communities, economies, ecosystems, and climate by including no new leasing across all planning areas in any proposed or final five-year OCS oil and gas leasing program.” (emphasis added)
And yes you read that right: The letter is advocating for an “oil and gas leasing program” that includes “no new leasing.”
What’s the point of an oil and gas plan if there is no leasing to actually produce oil and gas?
That would be like ordering a cheeseburger but requesting it without the meat, cheese, and bread.
These senators are essentially just ordering a bowl of pickles.
Threat to Workers Across the Country
Notably, with the exception of California, the senators represent states – Massachusetts, New Jersey, Oregon, Rhode Island, Washington – that don’t have offshore drilling and where there are no serious plans to begin development. And while they claim that offshore drilling is a threat to local economies, they seem to overlook the impact that discontinuing the U.S. offshore program would have on workers across the country.
As Jeff Padellaro, secretary treasurer of Teamsters Local 633, and Michael Skelton, president and CEO of the Business & Industry Association of New Hampshire, recently wrote:
“Teamsters Local 633 and the BIA strongly encourage our congressional delegation and the Biden administration to urgently focus on a priority renewal of our nation’s five-year offshore leasing program, which expires June 30. This program has been guiding domestic energy production for decades and has been renewed by every American president since the program started. The longer we go without a final program in place means the more uncertainty for industry and increases the likelihood that increased costs will be passed on to the consumer.
“Today, labor and business come together to urge our delegation and the Biden administration to support a realistic all-of-the-above energy policy by renewing our nation’s five-year offshore leasing program. We understand this plan is not a panacea to solve high gas prices, but it is an important step our leaders can take to help reduce energy costs for businesses, consumers and working families across New Hampshire and America.”
It would have an especially devastating effect on Texas, Louisiana, Mississippi, and Alabama where development in the Gulf of Mexico is a critical driver of economic growth.
According to a report from National Ocean Industries Association, development in the Gulf of Mexico is projected to support nearly 325,000 jobs in those four states alone and more than $25 billion in GDP contributions.
And not taking an all-of-the-above approach to offshore energy development could also have unintended consequences, as Louisiana Gov. John Bel Edwards (D) wrote to Sec. Haaland in January:
“As you know, the current leasing program expires at the end of June 2022. I believe that, should it expire, this would be detrimental not only to the economies and workers of states that support production of traditional energy sources from the Gulf OCS, but it could also significantly hamper efforts to develop wind energy and other potential renewable sources off the Gulf Coast… In Louisiana, we have a proud history of working collaboratively with stakeholders, including environmental groups and the energy industry, to build last plans to address the challenges of climate change.”
“A financially stable offshore traditional fuels industry is also a vital resource for future development of an offshore wind economy. The infrastructure and expertise need to build out an offshore wind energy economy will depend heavily upon leveraging the overlapping resources and skill sets currently supported by the existing offshore oil and gas industry. The offshore oil and gas industry and the infrastructure required to support it – including ports, roads, highly specialized vessels, skilled mariners and associated supply chains – are vital to the success of any domestic offshore wind or other renewable energy business. The technologies and services needed to support offshore renewable projects may not be economically viable on their own. They will need the existing offshore energy economy to sustain them until fledgling industries such as offshore wind is more widespread and mature.
More Mixed Messages on Gasoline Prices
With gasoline prices recently hitting a record high of $5 per gallon, this yet another attempt to weaken America’s oil industry at a time when we should be boosting domestic energy supplies.
The senators attempt to address this by stating the upcoming five-year plan, due to the long-term nature of development, would have no impact on gasoline prices today.
But as Energy In Depth noted last week, even media outlets like CNBC and CNN are calling out this kind of rhetoric, saying policies that would chill investment in oil and gas development over the long-haul undercuts confidence in the market to ramp up production today to address high gasoline prices.
As CNBC’s Becky Quick said:
“It doesn’t make financial sense. There are consequences when you say you don’t want things over the long haul. Businesses stop spending capex.”
It’s all part of the chorus of mixed messages from the Biden administration and Congressional Democrats that continues to undermine the U.S. energy sector.