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The Biden administration is moving ahead today with the controversial online auction of over 114,000 square miles of oil and gas leases in the Gulf of Mexico in line with a climate bill compromise that prohibits public land leases for renewable power unless oil and gas gets first dibs on tens of thousands of acres, the Associated Press reports.
This is the first such auction in over a year, and will place Joe Biden in the firing line coming off sharp criticism for his approval earlier this month of the Willow drilling project in northern Alaska.
It is estimated that the Gulf of Mexico could produce more than 1 billion barrels of oil and more than 4 trillion cubic feet of natural gas in five decades.
It is also estimated that the production of that oil and gas would contribute tens of thousands of metric tons of carbon dioxide emissions, according to the U.S. Department of the Interior’s environmental impact statement, not to mention the emissions from consuming that oil and gas.
Lease sale 259 opened on Wednesday at 9 a.m. CT, with the opening and reading of bids.
Majors Exxon and Chevron were expected to take interest, with Chevron saying in February that it remained “committed to safe exploration” in the Gulf of Mexico and planned “to grow production to more than 300,000 barrels per day by 2026”, as noted by Energy Intelligence.
The next Gulf of Mexico auction is scheduled for September this year. However, beyond this, nothing is certain, which has oil companies concerned over future plans to invest and expand in this offshore region.
The Biden administration sparked the ire of environmentalists already this quarter, approving the Willow project in Alaska. This project in particular made its rounds among the American youth because the issue was picked up by a TikTok influencer.
ConocoPhillips’ $8-billion Willow project was given the green light earlier this month after a long road that saw it approved by the Trump administration but then halted by a federal judge’s decision in 2021, citing serious errors in the environmental review.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com