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Oil Giant Comparison: BP vs Suncor

Oil Giant Comparison: BP vs Suncor

Both BP and Suncor have…

Federal Government Presents Plan To Resume Oil And Gas Leases

The federal government said it would soon resume oil and gas leasing, opening up millions of acres of federal land for drilling, most of it in the Gulf of Mexico.

Quoting the Interior Department, Reuters reported that the government will offer most of the unleased offshore blocks in the GOM, which span some 90 million acres. The lease sale could eventually yield oil production of up to 1.1 billion barrels of oil and 4.4 trillion cu ft of natural gas.

Interestingly, in its record of decision on the matter, the Interior Department said the latest IPCC report "does not present sufficient cause" for revising the current environmental analysis of the lease sale in the Gulf of Mexico.

The last part is interesting because it was precisely the revision of existing environmental assessments that President Biden paused oil and gas leasing on federal lands in January. This pause caused a reaction from oil-producing states, which argues that although the immediate effects of the pause may be negligible, over the long term it could affect negatively shale and conventional oil production and, consequently, budget revenues from the oil industry in those states.

To counter these effects, a group called the Western Energy Alliance filed a lawsuit against the administration immediately alleging the pause in oil and gas leasing would cost $33.5 billion in GDP losses during President Biden's first term and another $8.8 billion in conservation funding.

The suit was successful, and a Louisiana federal judge ordered the administration to restart lease sales by issuing a preliminary injunction. According to the judge, the administration had no right to stop leasing federal lands for oil and gas drilling without approval from Congress. The injunction is currently being appealed, but the Interior Department was forced to comply with it after pressure from legislators, claiming it was deliberately dragging its feet on the matter.

By Charles Kennedy for Oilprice.com

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