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1 1 (December 22, 2021)

handle is hein.crs/govefxr0001 and id is 1 raw text is: * Congressional Research Service Informing the legislitive diebate since 1914 Updated December 22, 2021 Offshore Oil and Gas: Biden Administration's Leasing Pause and Review On January 27, 2021, President Joe Biden issued Executive Order (E.O.) 14008, directing multiple administrative actions to address climate change. Section 208 of the order directed the Secretary of the Interior to pause new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices, to the extent that such actions were consistent with applicable law. The leasing pause was blocked by a court order in June 2021. The leasing review called for in the E.O., however, was completed in November 2021. The E.O. directed that the review evaluate potential climate and other impacts associated with oil and gas leasing, as well as whether to adjust royalties paid to the federal government from onshore and offshore oil and gas production to account for climate costs. Status of Leasing Pause and Review As implemented by the Department of the Interior (DOI), the leasing pause consisted of a halt on sales of new onshore and offshore oil and gas leases following issuance of the E.O. Exploration and development of existing leases were not halted. Some stakeholders contended the pause would affect long-term prospects for oil and gas investment, production, and revenues, while others asserted it would have few such impacts, given that activities on existing leases were continuing. On June 15, 2021, in response to a lawsuit filed by multiple state attorneys general, the U.S. District Court for the Western District of Louisiana issued a preliminary injunction ( -F. Supp. 3d-_, 2021 WL 2446010 (W.D. La. June 15, 2021)) prohibiting DOI from implementing the leasing pause with respect to both onshore and offshore lease sales that the agency had halted. The court found, among other things, that DOI had acted in an arbitrary and capricious manner, in violation of the Administrative Procedure Act (5 U.S.C. §§551 et seq.), by halting the lease sales solely on the basis of the E.O. DOI complied with the court order by resuming work on leasing activities, including planning for two offshore lease sales. DOI also completed its review of the federal oil and gas leasing program and issued a report on November 26, 2021, with recommendations concerning offshore and onshore lease sales and fiscal terms. Offshore Lease Sales Resumned Pursuant to the E.O.'s leasing pause, DOI's Bureau of Ocean Energy Management (BOEM) had postponed two lease sales that were scheduled for 2021 under the agency's five-year oil and gas leasing program for 2017-2022. BOEM had paused Lease Sale 257 in the Gulf of Mexico, originally scheduled for March 17, 2021, and had paused its early planning work for Lease Sale 258 in Alaska's Cook Inlet. Also, BOEM made no announcements and initiated no planning regarding Lease Sale 259, a second lease sale planned for the Gulf of Mexico later in 2021. DOI resumed work on lease sales to comply with the legal injunction on implementing the pause. DOI submitted a record of decision for Lease Sale 257 in the Gulf of Mexico on August 31, 2021, and the sale was held on November 17, 2021. The sale yielded $192 million in high bids on 1.7 million acres. Compared with other Gulf sales held in the 2017-2022 leasing program, this was the second-highest return in terms of bid revenues and the highest acreage bid on. DOI further announced that BOEM would issue and take comments on a draft environmental impact statement for the lease sale in Alaska's Cook Inlet. BOEM has not announced action on Lease Sale 259, the other lease sale scheduled for the Gulf for 2021, or on the final lease sale in the current five-year program (Gulf Lease Sale 261, scheduled for 2022). Not all sales scheduled in a five-year leasing program are necessarily held; for instance, a scheduled sale could be canceled based on sale-specific environmental review under the National Environmental Policy Act (NEPA; 42 U.S.C. §§4321 et seq.). DOI's Review and Future Lease Sales DOI's November 2021 review of the federal oil and gas leasing program recommended some changes for offshore lease sales going forward. Specifically, DOI recommended that BOEM consider alternatives to its current practice of area-wide leasing, under which all available (i.e., not previously leased or withdrawn) lease blocks within a given offshore planning area or broader offshore region are offered in a single lease sale. DOI cited studies finding that area-wide leasing reduced the amount of competition and the value of bids for each lease tract. Instead, DOI recommended offering smaller areas at each lease sale, narrowed through criteria related to environmental protection, subsistence uses, resource potential, and financial considerations. Some industry commentators have opposed this idea, suggesting that resource access restrictions could result in unfulfilled oil and gas demand and a greater need for energy imports. DOI's recommendations could affect BOEM's work on the upcoming five-year offshore oil and gas leasing program. BOEM's current five-year program ends in June 2022. During the Trump Administration, BOEM released a draft of a new five-year program, but BOEM has not announced

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