By Thomas Catenacci
President Joe Biden’s budget framework released this week appeared to suggest the federal government will not hold any offshore lease sales for at least another 18 months.
The Department of the Interior (DOI) projected offshore oil and gas lease revenues to decline from $395.5 million in fiscal year 2022 to just $25 million in 2023, a nearly 94% year-over-year decrease, according to the budget. The estimate, which marks a significant departure from U.S. energy policy stretching back years, was relegated to page 201 of the agency’s 208-page budget proposal.
It wasn’t immediately clear how the $25 million in revenue would be generated.
“The Interior Department’s budget suggests that there will not be any lease sales in the fiscal year of 2023 which ends in September 2023,” National Ocean Industries Association (NOIA) Erik Milito told the Daily Caller News Foundation. “We know that because they’re not including any money that would come in through the lease sales.”
The massive decline in lease revenue is likely the result of the administration’s failure to issue a five-year offshore leasing plan, experts told the DCNF. Under the Outer Continental Shelf Lands Act of 1953, the DOI must formulate and publish five-year plans detailing prospective offshore oil and gas lease sales.
Without such a plan, no federal lease sales would occur. The current five-year plan expires at the end of June. (RELATED: Oil Industry Report Warns Of Massive Job Losses From Biden’s Anti-Drilling Agenda)
Milito added that the budget implies offshore leasing won’t continue until “at least fiscal year 2024.”
“There’s no sign that the administration is moving forward with the development of a leasing program which is what is required in order to have the actual lease sales,” Milito said. “The consequences are significant when it comes to investment, energy production, jobs and government revenues.”
On Tuesday, NOIA and the American Petroleum Institute published a report examining the consequences of the Biden administration not issuing a replacement plan. The report concluded that U.S. oil production would decline by roughly 500,000 barrels per day and more than 57,000 energy industry jobs would be lost.