Biden administration cancels sale of oil and gas lease in Alaska

The Biden administration has canceled one of the most high-profile oil and gas lease opportunities pending before the Interior Department. The decision, which ends potential oil drilling on more than a million acres in Alaska’s Cook Inlet, comes at a difficult political time when gas prices are hitting painful new highs.

In a statement shared first with CBS News, the Interior Department cited a “lack of industry interest in leasing in the area” for the decision to “not proceed” with the sale of the Cook Inlet lease. The department also halted two pending leases for the Gulf of Mexico region due to “conflicting court rulings that impacted the work of these proposed lease sales.”

Federal law requires the Department of the Interior to stick to a five-year lease plan for auctioning offshore leases. The administration had until the end of the current five-year plan – which is due to expire at the end of next month – to complete these lease sales.

The sun sets behind an oil rig in Prudhoe Bay, Alaska
The sun sets behind an oil rig in Prudhoe Bay, Alaska on March 17, 2011.

Lucas Jackson/REUTERS

Until now, the White House has been silent on the massive Alaska lease. However, canceling the sale would be in line with political promises President Joe Biden has made in the name of stopping global warming. But these promises have become a political challenge in the face of prices at the pump.

“They don’t want to be affected by Republicans in light of high gas prices,” one conservationist told CBS News, speaking on the condition that he not be named due to the sensitivity of the subject. “They get killed in inflation-based attacks. The most visible sign of inflation is high gas prices.”

The delicate political situation was evident after a senior environmental official showed his hand in an email that copied a CBS News reporter. Gina McCarthy, the White House’s national climate adviser, wrote that “the sale of Cook Inlet has been cancelled. It is not proceeding.”

Almost immediately, another White House official stepped in to say that McCarthy had gotten ahead. Interior Ministry officials said no final decision had been made. On Wednesday, however, time is running out, the ministry made its announcement.

Frank Macchairola, a senior official with the American Petroleum Institute, the nation’s largest oil and gas trade association, called the cancellation of the Cook Inlet lease “just another example of the administration’s lack of commitment to the oil and gas development in the United States”.

“The president has spoken of the need for additional supplies in the market, but his administration has not taken steps to match that rhetoric,” Macchairola said, adding that politically it would “not play well.”

“In the type of price environment we see, there are negative consequences to stopping oil and gas development, both politically and practically,” he said.

On Wednesday, the national average price for regular gasoline hit an all-time high of $4.40, according to AAA.

For environmental groups, the decision was welcome news. The offshore lease arrangement in Alaska would have opened up drilling opportunities on an expanse of more than a million acres for 40 years or more of production. The new activity would have led to new pipelines and underwater platforms in the environmentally sensitive area.

Drew Caputo, vice president of land, wildlife and oceans litigation for environmental advocacy group Earthjustice, said more than a decade would pass before those leases would have an impact on lands. gas price.

“It’s good for the climate, which cannot support new oil and gas developments,” Caputo said. “It’s good for Cook Inlet because offshore drilling is dangerous and disruptive. And it’s good for the people of Cook Inlet, including aboriginals, who cherish the inlet in its natural state. So it’s a very good thing.”

Yet any decision that goes against the interests of oil and gas involves political trade-offs. According to a recent CBS News Poll, Mr. Biden’s approval rating is lowest on the economy and inflation, with 69% of respondents disapproving of his handling of inflation. Sixty-five percent of those polled said they thought the president “could do more” to lower gas prices.

American Petroleum Institute senior vice president Frank Macchiarola said in a statement: “Unfortunately, this is becoming a trend – the administration is talking about the need for increased supply and acting to restrict it. While the geopolitical volatility and global energy prices continue to rise, we urge the administration to end the uncertainty and act immediately on a new five-year federal offshore leasing program.”

But environmentalists argue that the climate issue is too important to be caught up in political battles.

“Scientists tell us that the time to switch from fossil fuels is not years away,” Caputo said. “It’s today. We need to end offshore oil leasing.”

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