August 23, 2021
Offshore Oil and Gas: Biden Administration’s “Pause” on New
Leasing
On January 27, 2021, President Joe Biden issued Executive
is a problem in ignoring acts of Congress while the review
Order (E.O.) 14008, directing multiple administrative
is being completed.” On March 25, 2021, the department
actions to address climate change. Section 208 of the order
held an online forum to gather oral feedback to inform the
directed the Secretary of the Interior to “pause new oil and
review. DOI also solicited written feedback, and
natural gas leases on public lands or in offshore waters
departmental officials stated in May that they had received
pending completion of a comprehensive review and
more than 100,000 written comments. DOI announced that
reconsideration of Federal oil and gas permitting and
an “interim report” is due to be completed in summer 2021.
leasing practices, ...” to the extent that such actions are
On August 16, 2021, DOI announced that it was continuing
“consistent with applicable law.” The E.O. stated that the
to review the program, including preparing a report.
review must evaluate “potential climate and other impacts”
associated with oil and gas leasing, as well as whether to
Offshore Lease Sales Affected by the
adjust royalties paid to the federal government from
Pause
onshore and offshore oil and gas production to account for
Pursuant to the E.O., DOI’s Bureau of Ocean Energy
“climate costs.”
Management (BOEM) postponed two lease sales previously
scheduled under the agency’s five-year oil and gas leasing
As implemented by the Department of the Interior (DOI),
program for 2017-2022. BOEM indefinitely paused Lease
the leasing pause has consisted of a halt on sales of new
Sale 257 in the Gulf of Mexico, scheduled for March 17,
onshore and offshore oil and gas leases for an undefined
2021, in response to the order. Lease Sale 258 in Alaska’s
period, during which exploration and development of
Cook Inlet, also slated for 2021 under the five-year
existing leases are allowed to continue. Some stakeholders
program, had been in the early stages of planning and was
have asserted that the pause could have significant long-
paused indefinitely. Also, BOEM has made no
term impacts for oil and gas investment, production, and
announcements and initiated no planning regarding Lease
revenues, while others have asserted that it would have few
Sale 259, a second lease sale planned for the Gulf of
impacts given that activities on existing leases are
Mexico later in 2021.
continuing.
How the E.O.’s required review ultimately may affect any
Status of Leasing Pause and Review
paused lease sales is unknown. For example, the review
On June 15, 2021, in response to a lawsuit filed by multiple
might or might not lead to changes in lease terms such as
state attorneys general, the U.S. District Court for the
rental and royalty rates for these sales going forward.
Western District of Louisiana issued a preliminary
BOEM has discretion to regulate lease terms under the
injunction (—F. Supp. 3d—, 2021 WL 2446010 [W.D. La.
Outer Continental Shelf Lands Act (OCSLA, 43 U.S.C.
June 15, 2021]) prohibiting DOI from implementing the
§§1331-1356b) and other authorities. BOEM also has, in
leasing pause with respect to both onshore and offshore
the past, cancelled some lease sales that were scheduled in
lease sales that the agency had temporarily halted. The
five-year programs based on environmental reviews of
court found, among other things, that DOI had acted in an
those prospective sales under the National Environmental
“arbitrary and capricious” manner, in violation of the
Policy Act (NEPA, 42 U.S.C. §§4321 et seq.).
Administrative Procedure Act (5 U.S.C. §§551 et seq.), by
halting the lease sales solely on the basis of the E.O.
New Five-Year Leasing Program
BOEM’s current five-year offshore oil and gas leasing
On August 16, 2021, DOI issued a press release announcing
program ends in June 2022. Typically, preparation of a new
an appeal of the preliminary injunction and announced that
program takes two to three years. During the Trump
the department would “proceed with leasing consistent with
Administration, BOEM released a draft of a new five-year
the district court’s injunction during the appeal.” DOI did
program and sought public comment. The Biden
not give specifics as to when paused lease sales might
Administration could continue to work from this draft
proceed. DOI stated that it would conduct such leasing “in a
program or could begin a new process.
manner that takes into account the program’s many
deficiencies.”
It is unclear how the E.O. may affect BOEM’s work on the
next five-year program. Although the E.O. calls for a pause
Although DOI is enjoined from effectuating the leasing
on new oil and gas leases, BOEM is required by the
pause directed by the E.O., it has initiated the policy review
OCSLA to prepare a five-year program. One possibility is
also mandated by the order. With regard to the review, the
that BOEM could undertake some aspects of the E.O.’s
court decision stated that “there is certainly nothing wrong
required review in the context of the economic and
with performing a comprehensive review,” although “there
environmental assessments conducted for the five-year
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Offshore Oil and Gas: Biden Administration’s “Pause” on New Leasing
program. For example, previous five-year programs
revenues going forward. The E.O. specifically directed DOI
considered potential climate and other impacts associated
to evaluate royalty rate adjustments as part of its review.
with offshore oil and gas leasing, as is required in the E.O.
The effects of any royalty rate adjustments could be
Some other requirements of the E.O., such as an evaluation
uncertain. For example, if the review led to an increase in
of royalty rates, typically have been pursued outside the
royalty rates, federal revenues could increase, resulting in
development of five-year programs.
higher amounts available for disbursement to state and
federal programs. Alternatively, if such royalty rate
Offshore Drilling Permits
increases made leasing unattractive to offshore operators,
DOI stated in a February 2021 fact sheet that the E.O.’s
lower federal revenues and disbursements could result.
“targeted pause does not impact existing operations or
permits for valid, existing leases, which are continuing to
Role of Congress
be reviewed and approved.” According to a database
The 117th Congress has addressed the leasing pause in
maintained by DOI’s Bureau of Safety and Environmental
oversight hearings and through legislation. Members have
Enforcement (BSEE), more than 400 permits to drill on
debated the purposes and impacts of halting new oil and gas
existing offshore leases have been issued since the E.O.’s
leasing on federal lands, whether temporarily or
publication on January 27, 2021. Another BSEE database
permanently. Some Members have introduced bills to
shows approval of more than 300 exploration and
support regular, ongoing federal oil and gas leasing—for
development plans for existing offshore leases during that
instance, by explicitly prohibiting DOI from halting leasing
time. Separate from the leasing pause in E.O. 14008, DOI
without congressional authorization (e.g., H.R. 543, S. 76)
issued two internal memoranda establishing new approval
or by requiring an economic study before the President
processes for certain federal oil and gas permitting
could impose a leasing halt or moratorium (e.g., H.R.
activities.
4266). Conversely, some legislation would direct DOI not
only to pause oil and gas leasing but to end it entirely on
Offshore Revenue Considerations
some or all federal lands (e.g., H.R. 2519, S. 1115). Some
Offshore oil and gas revenues provide most or all of the
Members also have introduced legislation concerning
funding for several federal conservation and restoration
federal oil and gas royalties and other fiscal aspects of the
programs, including the Land and Water Conservation Fund
leasing program that could be addressed in DOI’s review
(54 U.S.C. §§200301 et seq.), the Historic Preservation
(e.g., H.R. 1517, H.R. 2102, S. 1167). Congress may
Fund (54 U.S.C. §§303101-303103), and the newly
continue to consider issues related to the leasing program
established National Parks and Public Land Legacy
review, including the climate impacts of oil and gas leasing
Restoration Fund (54 U.S.C. §200402). Also, under the
on federal lands and the optimal fiscal terms for federal
OCSLA and the Gulf of Mexico Energy Security Act of
leasing.
2006 (43 U.S.C. §1331 note), a portion of offshore oil and
gas revenue is shared with coastal states, with most of the
Additional Reading
funds going to Alabama, Louisiana, Mississippi, and Texas.
For more information related to the leasing pause called for
in E.O. 14008, see CRS Legal Sidebar LSB10627,
Federal offshore oil and gas revenues fluctuate from year to
Unpaused: District Court Enjoins Biden Administration
year based on multiple factors and totaled $3.7 billion in
from “Pausing” Oil and Gas Leasing on Federal Land, by
FY2020. More than 90% of this total came from royalties,
Adam Vann; and CRS In Focus IF11785, Potential State
with the remainder from bonus bids at lease sales and rents
Impacts of a Pause on Federal Onshore Oil and Natural
paid prior to production. The E.O.’s leasing pause likely
Gas Leases, by Brandon S. Tracy. For more information on
would impact some of these revenue types earlier than
offshore oil and gas lease sales and planning, see CRS
others. For example, if BOEM held no auctions in 2021, no
Report R44504, Five-Year Program for Offshore Oil and
offshore bonus bids would be collected this year. However,
Gas Leasing: History and Program for 2017-2022, by
any effect on royalties—which form the high majority of
Laura B. Comay, Marc Humphries, and Adam Vann; and
the offshore revenues shared with states and used for
CRS Report R44692, Five-Year Offshore Oil and Gas
federal programs—would take longer to emerge because
Leasing Program for 2019-2024: Status and Issues in Brief,
new offshore oil and gas leases typically take several years
by Laura B. Comay.
to reach a point where production would begin and royalties
would be generated.
Laura B. Comay, Specialist in Natural Resources Policy
Separate from the pause itself, the E.O.’s required review of
IF11909
the oil and gas leasing program could affect offshore


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Offshore Oil and Gas: Biden Administration’s “Pause” on New Leasing


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https://crsreports.congress.gov | IF11909 · VERSION 1 · NEW

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