The Biden administration on Wednesday said it had reinstated bids from a November 2021 Gulf of Mexico sale of offshore oil and gas drilling rights, a requirement buried in U.S. President Joe Biden’s new climate change and drug pricing law.
The move comes after a federal judge in January vacated the sale’s results, saying the administration had failed to properly account for the auction’s impact on global warming.
The Inflation Reduction act, which President Joe Biden signed into law last month, contains nearly $370 billion for climate change and clean energy initiatives such as incentives for solar and wind power. But it also contains protections for the powerful oil and gas sector.
Senator Joe Manchin, a Democrat who represents the coal-producing state of West Virginia, demanded those provisions in exchange for his support for the legislation.
Biden vowed during his 2020 election campaign to end federal oil and gas drilling to fight climate change, but has faced pressure to increase oil and gas production in the face of soaring fuel prices.
The Bureau of Ocean Energy Management, an arm of the Interior Department which oversees offshore energy development in federal waters, said it had accepted the 307 highest bids from last year’s sale. Combined, they add up to $189.9 million for federal coffers, BOEM said in a statement.
The sale had drawn U.S. oil majors including Exxon Mobil Corp and Chevron Corp.
An oil industry trade group said it was pleased with the reinstatement and urged the administration to include 11 auctions in its final five-year offshore drilling plan. A proposal BOEM unveiled earlier this year said the forthcoming final plan could include two auctions a year or none at all.
“It is the responsibility of the federal government to conduct offshore lease sales based on the energy needs of U.S. consumers,” the American Petroleum Institute said in an emailed statement.