In Days After Climate Talks, US To Hold Huge Sale Of Crude Oil In The Gulf Of Mexico

NEW ORLEANS (AP) – The US Department of the Interior is to auction Wednesday’s huge oil reserves in the Gulf of Mexico, estimated to hold up to 1.1 billion barrels of crude, the first such sale under President Joe Biden and a harbinger of trouble. that he is facing. achieve climate targets that are dependent on significant reductions in fossil fuel emissions.

The live broadcast of the proposal will invite energy companies to bid for drilling leases covering approximately 136,000 square miles (352,000 square kilometers), roughly double the area of ​​Florida.

It will take years to develop leases before companies start pumping oil. This means they can continue to produce long after 2030, when scientists say the world must be on track to reduce greenhouse gas emissions to avoid catastrophic climate change.

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The auction comes after a federal judge, in a lawsuit filed by the Republican states, dismissed a fossil fuel suspension imposed by Biden when he first took office.

The Democrat campaigned promising to end drilling in public lands and waters, which account for about one-tenth of US energy-related emissions. Yet even as he tried to convince other world leaders to step up international efforts to combat global warming, Wednesday’s sale demonstrates the difficulties Biden is trying to succeed in tackling climate problems at home.

Last week, the administration proposed another round of oil and gas sales in 2022 in Montana, Wyoming, Colorado and other western states. Interior Ministry officials continued their work despite finding that burning fuels could cause billions of dollars of potential climate damage in the future.

“We had Trump’s unrestricted approach to oil and gas on federal lands and Biden’s early attempt to halt drilling. Now it looks like the Biden administration is trying to find a new policy, ”said researcher Robert Johnston of the Center for Global Energy Policy at Columbia University.

“They are very careful to undermine their fragile dynamics” on climate issues, he added.

Environmental reviews of the Gulf of Mexico sale conducted under former President Donald Trump and confirmed under Biden have come to the unlikely conclusion that extracting and burning the fuel will result in fewer greenhouse gases than leaving it buried in the ground.

Similar claims in two other cases in Alaska were dismissed by federal courts following objections from environmentalists. Climatologist Peter Erickson, whose work was cited by judges in one case, said the Home Office analysis contained a glaring omission: they did not take into account the increase in greenhouse gas emissions in foreign countries, which could result from an increase in the amount of Gulf oil on the market. …

“The math for this kind of thing is extremely simple,” said Erickson, a senior fellow at the Stockholm Environment Institute, a non-profit research group headquartered in Sweden. “If the new leases increase the global supply of oil, this will have a proportional impact on emissions from oil flaring. Consequently, renting out in the Gulf of Mexico will increase global emissions. ”

The Department of the Interior’s Bureau of Ocean Energy Management has changed its emission modeling methods in recent months, citing work by Erickson. But officials said it was too late to take a new approach to selling leases on Wednesday, which they said was going through a “rigorous time-bound process.”

“The environmental analysis for Lease Sale 257 has already been completed and, as such, does not contain a new approach to addressing the impact of overseas oil and gas consumption,” the agency said in a statement to the Associated Press.

Administration officials rejected AP’s request for an interview. In terms of the upcoming sales, spokeswoman Melissa Schwartz said Interior is conducting a more comprehensive scrutiny of emissions than any previous administration as it is appealing a court order that forced them to renew.

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Eric Milito, president of the National Association of the Marine Industry, said he was not convinced the new approach would change the government’s conclusions, as oil drilling in other parts of the world is less efficient and imports are also driving up the cost of carbon emissions. He described the Gulf as “the backbone of US oil production” and said companies see it as a strong investment.

The continued use of old analysis irritates opponents of drilling, who say that Biden is falling short of his climate commitments.

“We’re talking about moving away from saving on fossil fuels, and they are selling a giant carbon bomb on lease,” said lawyer Drew Caputo of Earthjustice, who has a lawsuit challenging the sale of a lease in the Gulf pending in federal court. “This creates ownership of the development of these leases. If you sell the lease, it will be much more difficult to store carbon in the land. ”

Some Democrats also opposed the sale. Arizona Rep. Raul Grihalwa, chairman of the House of Representatives’ Natural Resources Committee, said Biden has pledged to lead climate change but continues to pursue a fossil fuel program with a long history of mismanagement.

“The administration needs to do a better job,” Grijalva said in a statement on Tuesday.

Since the Department of the Interior began conducting sales across the Gulf in 2017, each sale has sold an average of 1,075 square miles (2,780 square kilometers), generating nearly $ 1 billion in revenue over that period. The largest of these in March 2019 was about 1,875 square miles (4,856 square kilometers).

The Gulf of Mexico accounts for about 15 percent of all US oil production and 5 percent of natural gas.

Industry analysts are forecasting some heightened interest in the selloff on Wednesday as oil prices have surged over the past year. This is also a chance for companies to obtain drilling rights before the administration or Congress can increase drilling fees and royalty rates or enact new environmental permit restrictions, says Justin Rostant of industry consulting firm Wood Mackenzie.

A complete ban on new leases and drilling seems unlikely after a federal court overturned Biden’s suspension, he said.

“Different companies have different approaches and different strategies,” Rostant said. “Some might think this might be a year of great success.”

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