US cancels oil lease sales despite fuel crisis — Analysis

Three sales of off-shore exploration acreage are being halted by the Biden administration, even though Americans face rising fuel costs.

President Joe Biden’s administration has canceled three offshore oil and natural-gas lease sales, including one in Alaska, diminishing prospects for new sources of supply even as record gasoline prices help keep the US inflation rate at a 40-year high.

The US Department of the Interior (DOI) announced the decision on Wednesday, calling off lease sales in the Gulf of Mexico and Alaska’s Cook Inlet. This decision was blamed on the department “conflicting court rulings”It has made its job more difficult with the Gulf of Mexico auction “lack of industry interest”Torpedoing Alaska’s Alaska offer.

Despite a law that required the DOI’s completion of its five year leasing plan (including the auctions at the Gulf of Mexico, Cook Inlet, and Gulf of Mexico), the sales were cancelled. This decision comes after sanctions on Russia in response to the Ukraine crisis have accelerated the increase in energy prices.

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The average US gasoline price reached $4.42 per gallon on Thursday for the lowest grade, setting new records. A record high for diesel is also at $5.56 per gallon.

“Biden’s decision to cancel the Alaska oil and gas lease sale makes zero sense in this energy-constrained environment,”Dan Eberhart is the CEO of Canary LLC, a drilling-services contractor. “America is short on supply, and consumers are paying the price at the pump.”

Biden blames the US Oil Companies and Republicans, Russian President Vladimir Putin, for the escalating fuel prices. Critics have noted that President Donald Trump revoked a Permit for the Extension of Keystone XL Pipeline, which would have transported more than 800,000. barrels per day of Canadian crude oil to the US Gulf Coast Refineries. His administration also failed to open up new opportunities on federal lands.

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“It’s day 477 of the Biden administration, we have record gas prices, and they have still not leased one acre of land to drill oil,”Representative Dan CrenshawOn Thursday, (R-Texas), said. Senate Minority leader Mitch McConnell(R-Kentucky), noted that gasoline prices in the US have increased by over $2 per gallon, since Biden assumed office in January 2021.

“The president has spoken about the need for additional supplies in the market, but his administration has failed to take action to match that rhetoric,”American Petroleum Institute executive Frank Macchiarola said. “In the kind of price environment that we’re seeing, there are negative consequences to shutting off oil and gas development, both politically and practically.”

Alaska’s sale would have given rise to more than 1,000,000 acres worth of exploration potential with the potential for production for up to four decades.



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