Last week, the U.S. Department of the Interior released its proposed Outer Continental Shelf (OCS) five-year program for offshore oil and gas leasing. The Outer Continental Shelf Lands Act (OCSLA) requires the Secretary of the Department of the Interior to “prepare and periodically revise and maintain an oil and gas leasing program” (i.e., a five-year plan). Despite this requirement, the Biden Administration previously halted lease sales and the development of a new five-year plan, including delaying the scheduled March 2021 lease sale until November 2021 (sale subsequently vacated by court order), then cancelling the remaining lease sales in the then-existing five-year plan, which expired at the end of June. The five-year program that was proposed last week continues the Biden Administration’s commitment to energy transition with up to 11 potential lease sales in 2023-2028, but with none guaranteed.

Secretary of Interior Deb Haaland made the following statement as part of the Interior’s release of the proposed plan:

The proposed plan puts forward several options from no lease sales up to 11 lease sales over the next five years.  Like the current program finalized in 2016, it removes from consideration the federal waters off the Atlantic and Pacific coasts while inviting public comment on 10 potential sales in the Gulf of Mexico and one in the Cook Inlet off south-central Alaska . . . . From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy.  Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing.  The time for the public to weigh in on our future is now.

The proposed plan, which generally tracks the 2017-2022 plan issued under the Obama Administration, contemplates 10 potential Gulf of Mexico lease sales, plus 1 potential Alaska Cook Inlet lease sale over the next five years. The proposed plan states that these areas “have the greatest resource potential and net benefits with the least potentially significant impacts and costs to society to meet national energy needs under existing laws and policies.” No lease sales are proposed for other planning areas, including federal waters located offshore of the Atlantic and Pacific coasts. The proposed plan offers a maximum of two potential lease sales per year from 2023-2028 for Gulf of Mexico areas, noting that, due to the number of existing leases, two potential lease sales per year provides “adequate access to the region’s oil and gas resources to meet national energy needs.”

The plan also includes a “no action alternative” option for the Biden Administration to conduct no sales:

[T]his Proposed Program retains the Secretary’s discretion at the PFP [Proposed Final Program] stage to determine that no OCS oil and gas lease sales in any planning area should be scheduled during the 2023–2028 period.

The proposed plan reiterates that “BOEM continues to research potential net-zero emissions pathways and implications for the National OCS Program” and “the Secretary may re-evaluate national energy needs on an ongoing basis prior to holding any lease sales” in the future. The proposed plan seeks public comment on this range of options. Interior has never finalized a five-year plan calling for no lease sales to be held.

The proposed plan and additional information are available here. The Department of Interior will now hold a 90-day public comment period before it will begin considering its proposed final plan. Once a proposed final plan is issued, OCSLA mandates a 60-day waiting period to allow the President and Congress an opportunity for input. Secretary Haaland can then approve the final plan. As a result, even with issuance of the proposed plan, final approval of a new five-year leasing program is likely not feasible until sometime in 2023 creating a significant gap between the expiration of the current five-year plan and the issuance of a new plan.  As part of the comment period, the Department will be holding virtual meetings in August to obtain additional public input. You can register for the virtual meetings on BOEM’s website.

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Photo of Jana Grauberger Jana Grauberger

Jana Grauberger is an oil and gas lawyer with more than 20 years experience. Clients turn to her as a trusted advisor in connection with their contract negotiations, regulatory advice and appeals, litigation, and arbitration related to onshore and federal offshore upstream and…

Jana Grauberger is an oil and gas lawyer with more than 20 years experience. Clients turn to her as a trusted advisor in connection with their contract negotiations, regulatory advice and appeals, litigation, and arbitration related to onshore and federal offshore upstream and midstream projects and facilities. Jana has represented clients in negotiating a wide variety of onshore and offshore contracts, including purchase and sale agreements, farmouts, participation agreements, joint operating agreements, production handling agreements, platform use agreements, gathering agreements, connection agreements, construction contracts, transportation contracts, and decommissioning agreements. She also represents clients in connection with regulatory matters involving Department of Interior agencies, including the Bureau of Ocean Energy Management (BOEM), the Bureau of Safety and Environmental Enforcement (BSEE), and the Office of Natural Resources Revenue (ONRR).

Photo of Stephen Wiegand Stephen Wiegand

Steve Wiegand’s practice focuses on complex regulatory issues impacting onshore and offshore energy and industrial operations.

In the offshore arena (including the Gulf of Mexico and the Pacific), he advises clients on a wide range of regulatory matters, including compliance with operational and…

Steve Wiegand’s practice focuses on complex regulatory issues impacting onshore and offshore energy and industrial operations.

In the offshore arena (including the Gulf of Mexico and the Pacific), he advises clients on a wide range of regulatory matters, including compliance with operational and safety requirements, appeals of Incidents of Non-Compliance and civil penalty assessments, incident response and associated agency investigations, lease suspensions, and National Pollutant Discharge Elimination System permit compliance.