Soaring U.S. LNG exports have…
Why did crude fall out…
The Department of the Interior has canceled a lease sale in Alaska that would have opened up some 1 million acres to drilling, citing a lack of interest from the industry.
In a statement sent to CBS News, the Interior also said it had suspended two leases in the Gulf of Mexico that were under consideration, citing "conflicting court rulings that impacted work on these proposed lease sales."
Alaska is one of the oldest oil-producing regions in the United States. But lately, production has been on a steady decline, which has prompted authorities to look for ways to reverse the decline, which has affected the state's income.
On the other hand, oil companies have prioritized the Permian and other shale plays, thanks to often lower-cost and faster-return production. To add to this, banks have become increasingly reluctant to lend to the oil industry as they prioritize the ESG demands of their shareholders, making investments in costly projects such as Arctic drilling much harder to obtain.
At the same time, the federal government is desperately trying to put a lid on retail fuel prices, which hit a fresh record this week. One of the directions in which the government is working is mending fences with the oil industry and trying to motivate it to drill more.
However, efforts are not exactly consistent: two weeks ago, the Bureau of Land Management said it was canceling Trump-era plans for the National Petroleum Reserve in Alaska and substantially reducing the acreage available for drilling.
The BLM will instead use a 2013 plan for the National Petroleum Reserve that will leave a bit over 50 percent of its territory open to drilling.
"Sweeping restrictions like this — which are being imposed even as the Biden administration implores OPEC+ to produce more oil — demonstrate everything that is wrong with its energy policies," Alaska Senator Lisa Murkowski said, commenting on the change.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com