The Biden administration has failed to remedy a mathematical glitch in its oil and gas permitting review process, causing a system backlog and a decrease in offshore energy production.
The National Marine Fisheries Service (NMFS), the agency responsible for determining wildlife impacts of offshore energy projects, acknowledged the mistake in April, but has since opted against quickly remedying the situation, according to industry group National Ocean Industries Association (NOIA). For months, the agency’s faulty modeling has overestimated wildlife “takes,” the impacts of drilling on sea animals, when reviewing permit requests for proposed oil and gas projects on existing leases in the Gulf of Mexico.
“These permitting delays have a real impact on the industry’s ability to safely and efficiently explore, drill and produce energy in the offshore sector,” NOIA President Erik Milito told FOX Business in an interview. “It is a significant concern when it comes to not just energy production, but when it comes to ensuring that investment stays in the U.S. and that we can maintain the jobs, the high-paying jobs that go along with this activity.”
“We’ve heard specifically from companies that — without getting these permits process in a timely manner, they’re not able to do the seismic work which is required for them to move forward with their exploration and drilling plans, which means that they’re delayed in moving forward with their programs,” he continued. “It holds back production and investment in the U.S.”
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Milito added that the delayed permitting process has caused uncertainty among drilling and exploration companies who he said are “sitting around” instead of increasing oil production.
Gasoline prices, which are largely determined by oil prices, surpassed $4 per gallon last week, 22% higher than a year ago and 61% higher than when President Biden took office, according to the Energy Information Administration.
The NMFS, which is a subagency within the National Oceanic and Atmospheric Administration (NOAA), first proposed the rule impacting how it analyzes wildlife takes for oil and gas permitting in the Gulf of Mexico in January 2021. The rule took effect in April 2021 and originally slated to expire in 2026.
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However, on April 5, nearly a year after the rule was finalized, NOIA, the American Petroleum Institute and the Energeo Alliance penned a letter to NOAA Administrator Richard Spinrad, informing him of the federal government’s error causing a permitting backlog. The groups urged the administration stop the delay immediately.
“NMFS understands the concerns of industry and is working with [the Bureau of Ocean Energy Management (BOEM)] to expeditiously develop … revised regulations,” Spinrad wrote to Milito on April 29 in response.
In May, nearly two dozen Republican senators including Senate Energy and Natural Resources Ranking Member John Barrasso, R-Wyo., wrote to Commerce Secretary Gina Raimondo, urging her to swiftly fix the issue. They said the delay was an example of the Biden administration’s “de facto ban on new drilling.”
On Tuesday, Sen. Joe Manchin, D-W.Va., the chairman of the Senate Energy and Natural Resources Committee, wrote a letter to Biden, highlighting the continued delays.
“Despite admitting that an agency error is prolonging these permits, the delayed Letters of Authorization are unacceptably postponing new offshore production on current leases that would produce hundreds of thousands of barrels per day in the near future,” he wrote.
In the letter, Manchin also underscored a series of other impediments to greater domestic fossil fuel production and said Biden must “demonstrate support” for the U.S. oil and gas industry.
Since taking office, the Biden administration has taken a number of steps to disincentivize fossil fuel production. Oil production on federal lands and waters fell to 11.9 million barrels per day this month, more than a million barrels less than its March 2020 pre-pandemic level, according to federal data. Gulf of Mexico oil production remains about 250,000 barrels per day lower than pre-pandemic levels.
The Department of Commerce, NOAA and NMFS did not respond to requests for comment.
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