The Biden administration’s climate commitment includes reducing emissions by 50 percent by 2030. In early July, the Interior Department released a five-year draft plan for offshore drilling. While the plan does not contain new lease sales for the rest of 2022, it includes ten potential offshore leases for oil and gas companies in public waters in the Gulf of Mexico and one in Alaska’s Cook Inlet from 2023 through 2028.
The Interior Department’s plan puts Biden’s climate commitments at odds with possibly new fossil fuel drilling in the Gulf of Mexico. New offshore drilling leases would go into effect in 2030, the same year Biden wants a 50 percent emissions reduction. Scientists warn that staying within 1.5 degrees Celsius of global warming means not issuing new offshore oil and gas leases.
The current justification for more oil and gas drilling is to bring down prices at the pump. However, recent research found that stopping new oil and gas leasing would not significantly affect energy prices. No new leasing would only reduce production by two percent by 2035. Furthermore, the U.S. exports almost half of its domestic oil.
According to an analysis by Oceana, permanent offshore drilling protections for unleased federal waters could prevent more than 19 billion tons of greenhouse gas emissions while avoiding over $720 billion in damage to people, property, and the environment. That amount of emissions is the equivalent of taking every car in the U.S. off the road for 15 years or almost three times the total annual emissions in the U.S. Furthermore, $720 billion is comparable to more than the yearly GDP of cities like Washington D.C., Boston, or Atlanta.
As the world experiences the effects of climate change this summer, from floods to wildfires, the last thing needed is more offshore fossil fuel drilling. “Ruling out new leases this year is an important step toward protecting communities and climate, and we urge the administration to finalize a plan that commits to no new offshore drilling leases, period,” said Athan Manuel, Sierra Club Lands Protection Director.
“Coastal communities, especially in the Gulf, have been subjected to the threat of offshore drilling disasters for far too long, and suffer disproportionate harms from this dangerous and polluting activity, as well as worsening extreme weather caused by fossil fuel-driven climate change,” said Manuel.
“It’s time to invest in cleaner, smarter ways to power our future—to get more clean energy from the wind and sun, speed the shift to electric vehicles and build a modern, reliable power grid and storage system,” said Manish Bapna, president and CEO of Natural Resources Defense Council. “That’s the way to cut costs for our families, strengthen the economy and make our country more secure.”
Record high profits
Oil and gas companies profited enormously in 2021. The top 25 oil and gas companies announced $205 billion in profits last year, according to a report from Accountable.us. They have also more than tripled their profits in the first quarters of 2022. Last year, oil and gas companies bought back more than $35 billion in stocks while increasing their dividends, with plans to buy back over $80 billion in shareholder returns this year.
Oil and gas companies are boasting about having an “even better” year in 2022:
- Coterra CEO Tom Jordan called the high gas prices “good.”
- Equinor CEO Anders Opedai told investors about “capturing value from high prices.”
- Marathon Oil called doubling down on share buybacks the “clear thing for us to do.”
“As Americans encounter higher prices to fill their gas tanks or heat their homes, Big Oil is grasping at straws to explain why they are swimming in unused leases and hundreds of billions of dollars in profits – money they hand over to wealthy oil and gas company executives and shareholders rather than struggling consumers,” said Kyle Herrig, president of Accountable.US.