Under President Biden, Permits for Offshore Oil and Gas Hits 20-Year Low
In the wake of rising concerns over energy production, offshore oil and gas permitting under President Biden has seen a significant decline, reaching levels not seen in over two decades. Since the start of Biden’s term in January 2021, only 157 new well drilling permits have been approved, a 29% drop compared to the same period under the Trump administration and a 55% decrease compared to the same period under the Obama administration.
Erik Milito, the president of the National Ocean Industries Association, emphasized the importance of leveraging the Gulf of Mexico to meet the growing global demand for oil. The Gulf of Mexico has been a significant source of oil production, even with a reduced number of active lease blocks. However, the bottlenecking of the permitting process is a substantial hindrance to the region’s potential success.
In 2021 and 2022, the number of offshore drilling permits fell below 60 for the first time since 2003, with 52 and 53 permits granted in those years, respectively. These numbers pale in comparison to previous administrations, where the Trump administration issued 148 permits, the Obama administration issued 275 permits, and the Bush administration issued 704 permits in the first two years of its second term.
Milito stressed the importance of having a fair and stable leasing and permitting system, as a predictable regulatory process is crucial for energy producers. Without such predictability, companies may be incentivized to explore regions with more reliable regulatory environments, potentially leading to an exodus from the United States.
The Biden administration’s approach to oil and gas leasing has also faced criticism, with its initial campaign promise to block new leasing on federal lands and waters. In May 2022, the administration canceled all remaining offshore fossil fuel lease sales in the Gulf of Mexico and Alaska, a decision that was later overturned by a federal court.
The Department of the Interior (DOI) recently proposed a five-year offshore oil and gas leasing program, which includes only three lease sales through 2029, the fewest ever proposed by the federal government. House Natural Resources Committee Chairman Bruce Westerman expressed disappointment in the plan, labeling it a blunder by the Biden administration.
As these issues continue to impact the energy sector, concerns arise over the administration’s ability to maintain stable energy production. Energy security remains a pressing issue, and the decisions regarding permitting and leasing will have a significant impact on the future of American energy production.