The Biden administration has begun issuing Gulf of Mexico drilling rights to companies that nabbed oil and natural gas leases in a government auction later invalidated by a federal court.
(Bloomberg) — The Biden administration has begun issuing Gulf of Mexico drilling rights to companies that nabbed oil and natural gas leases in a government auction later invalidated by a federal court.
Several companies that participated in that November 2021 sale have received notification of new leases as of Wednesday morning, according to people familiar with the matter who asked not to be named because the information isn’t public.
Leases have been issued to both independent oil companies and large majors, the people said.
The action dispels some lingering uncertainty about how the Interior Department might comply with a mandate in the sweeping new climate law that required the award of leases to winning bidders within 30 days of the statute’s enactment. That deadline falls on Thursday.
Spokespeople for the Interior Department and its Bureau of Ocean Energy Management didn’t immediately respond to requests for comment.
The government provisionally sold 308 leases across the Gulf of Mexico in November’s auction, with oil companies spending $191.7 million on the territory. But just three months later, a Washington-based federal district judge tossed out the auction, after finding the Interior Department hadn’t sufficiently analyzed the climate change impacts of the sale.
Under a provision tucked into the just-enacted Inflation Reduction Act, the Interior Department was required to award those leases. Future oil lease sales are also required for the agency to issue rights of way and leases to renewable projects on federal lands and waters.
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