Biden Administration Will Allow Oil and Gas Lease Sales to Resume
There is some good news to report for the oil patch. The Department of the Interior has announced plans to move forward with the sale of oil and gas leases in the Gulf of Mexico. The announcement comes on the heels of a federal court order that required the resumption of oil and gas lease sales that had been suspended by a moratorium that was put in place by the Biden administration.
Oil and gas industry experts celebrate the news. Although it wasn't clear what prompted President Biden's administration to acquiesce and allow those sales to proceed. Regardless, the resumption of oil and gas leases in the Gulf of Mexico was received as welcome news by the Louisiana Oil and Gas Association.
You might recall the moratorium was enacted shortly after President Biden was sworn into office last January. The Administration stated that the reduction of domestic oil and gas production would be a key factor in limiting global warming. As part of that moratorium, the Biden administration banned new oil and gas lease sales on federal lands and waters.
Before being elected as President, then-candidate Joe Biden promised that if elected he would begin that process of getting the country on a path to carbon neutrality by the year 2050. Those who support climate change legislation say that if the carbon-neutral goal is not met by 2050 that mankind will face catastrophic levels of global warming that would be irreversible.
The change in policy is seen as a very good thing by those in Louisiana's oil and gas industry. In fact, the reversal of the Biden policy combined with higher prices should help the local companies that serve the oil patch begin to rebound.
As of this morning, oil was priced at around $70 per barrel. Of course, that price fluctuates almost minute by minute. However, $70 per barrel is certainly more attractive to producers than the $37 per barrel that they were getting in November of last year.
According to the Louisiana Oil and Gas Association, the notice of the sale will likely be announced sometime next month.