09.29.23

Murkowski, Sullivan slam weakest-ever offshore energy plan

WASHINGTON -- U.S. Senators Lisa Murkowski and Dan Sullivan (both R-Alaska) today slammed the Biden administration for releasing a five-year plan for offshore energy development with a “maximum of three potential lease sales.” The Department of the Interior’s (DOI) Proposed Final Program, which arrives over a year late, has zero lease sales until at least 2025 and would not allow any to be held off the coast of Alaska.

“I don’t pretend to understand why the Biden administration prefers energy from the likes of Iran and Venezuela compared to our own country. What is clear is that the administration has decided to do as little as possible and bend to the whims of extreme environmental groups, instead of taking a clear-eyed look at our long-term energy needs. We know what happens from here: as this administration deliberately reduces U.S. production, prices will be higher, pain at the pump will be worse, and OPEC+ will be empowered,” Senator Murkowski said. “Leaving Alaska out of this plan is particularly galling and short-sighted. At a time when Southcentral needs new supplies of natural gas, the Biden administration moves to reduce access, leasing, and forces us toward imports of energy that could otherwise be produced in Cook Inlet. Once again, Alaska’s economy is pushed out into the cold.”   

“The Biden administration’s announcement today of the smallest offshore oil plan in our nation’s history all but guarantees the U.S. will become increasingly dependent on authoritarian dictators for our energy needs in the years to come,” Senator Sullivan said. “This is national security suicide. It’s also an affront to working Americans who are struggling to pay their bills as this administration continues its dangerous crusade to appease radical activists and shut down American energy. Throughout this presidency, Alaskans have been hit the hardest by these failed policies and today’s news is no different: Alaska, one of the most resource-rich places on the planet, may well have to import natural gas from foreign countries because of this administration’s policies and plans for shutting down Alaska’s Cook Inlet. This is insanity.”

Through this Proposed Final Program, the Biden administration has once again ignored the reality that the United States will need significant volumes of affordable, domestically-produced oil and gas for decades to come. Bloomberg’s Javier Blas recently wrote about “the harsh truth: we’re using more oil than ever,” while EIA data does not show any notable reduction in domestic consumption. Meanwhile, the Wall Street Journal reported this week that U.S. crude oil inventories have fallen to their lowest level of 2023, the Strategic Petroleum Reserve has been depleted to a 40-year low, and the United Kingdom, Norway, and others continue to permit development of their own offshore resources.

The Proposed Final Program also continues the Biden administration’s misguided efforts to block responsible energy development in Alaska—both onshore and offshore. In addition to illegally canceling leases in the 1002 Area and proposing restrictions across millions of acres of the National Petroleum Reserve-Alaska, earlier this year the administration deliberately sought to reduce natural gas production from Cook Inlet through adoption of the highest-possible royalty for a legally mandated lease sale. According to a DOI memo obtained in May 2023:

“A lower royalty of 16 2?3 would also be expected to incentivize additional blocks receiving bids, increase bonus bids, and increase the chances of a discovery being developed. If a Cook Inlet prospect would be developed, there would be additional government revenues and greater energy security for the State of Alaska, especially if development of natural gas resources in the Cook Inlet ameliorated the long-term supply challenges facing the Anchorage area.”

DOI instead imposed a royalty of 18.75%, harming industry’s ability to responsibly develop resources that Southcentral Alaska needs.

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