WASHINGTON — Oil companies offered $382 million for drilling rights in the Gulf of Mexico on Wednesday after courts rejected the Biden administration’s plans to scale back the sale to protect an endangered whale species.
The auction was the last of several offshore oil and gas lease sales mandated under the 2022 climate law. It comes as President Joe Biden’s Democratic administration tries to navigate between energy companies seeking greater oil and gas production and environmental activists who want to stop new drilling to help combat climate change.
Companies including Chevron, Hess and BP offered bids on more than 300 parcels covering 2,700 square miles), according to the U.S. Department of Interior’s Bureau of Ocean Energy Management.
The dollar amount of the successful bids marked a sharp increase from the previous sale in March, when the Interior Department awarded leases covering about 2,500 square miles for $250 million.
The next sale will be conducted in 2025, to the frustration of energy companies and Republicans who say the administration is hampering U.S. oil production.
Wednesday’s online auction was originally scheduled for September but got delayed by a court battle after the administration reduced the area available for leases from 73 million acres to 67 million acres as part of a plan to protect the endangered Rice’s whale.
Chevron, Shell Offshore, the American Petroleum Institute and the state of Louisiana sued to reverse the cut in acreage and block the inclusion of the whale-protecting measures in the lease sale provisions.
A federal judge in southwest Louisiana ordered the sale to go on without the whale protections, which also included regulations governing vessel speed and personnel. Environmental groups appealed, but the New Orleans-based 5th U.S. Circuit Court of Appeals last month rejected their arguments against the sale and threw out the plans to scale it back.
The lease sale was required under a compromise with Democratic Sen. Joe Manchin of West Virginia, a supporter of the oil and gas industry who cast the deciding vote in favor of the landmark climate law. The measure was approved with only Democratic votes in Congress. Under the terms negotiated by Manchin, the government must offer at least 60 million acres of offshore oil and gas leases in any one-year period before it can offer offshore wind leases that are part of its strategy to fight climate change.
Only a small portion of parcels that are offered for sale typically receive bids, in areas where companies want to expand their existing drilling activities or where they foresee future development potential.
The administration in September proposed up to three oil and gas lease sales in the Gulf of Mexico over the next five years and none in Alaska waters. That was the minimum number the administration could legally offer if it wants to continue expanding offshore wind development.
Environmental groups criticized the five-year plan as a “missed opportunity” to stop the expansion of oil and gas drilling in the Gulf of Mexico and address climate change.
“New oil and gas operations (in the Gulf) will only bring more health risks to Gulf Coast communities and slow our transition to a clean-energy economy,’’ said Earthjustice attorney Brettny Hardy.
The industry, meanwhile, said more sales are needed — and sooner.
