Energy & Environment

Weekly Oil Market Crash Update: Trump Administration Opens Up 78 Million Gulf Acres For Oil And Gas Exploration

The President looks to open up a large swath of federal waters for oil and gas drilling, plus one major oil and gas conference has already postponed its 2021 event due to the pandemic.

Shell’s Olympus production platform and drilling rig, located about 130 miles south of New Orleans.

The Bureau of Ocean Energy Management put up 78 million acres of federal waters offshore Texas and other Gulf states to lease for oil and gas drilling and exploration this week.

President Donald Trump was expected to open up millions of acres to oil and gas companies before leaving office partly as a response to President-elect Joe Biden's climate change action plan. It includes a ban on new drilling projects on federally owned land.

This is the first auction since March, when the oil and gas industry was just starting to feel the impact from the global pandemic. It was the weakest U.S. offshore auction since the oil price crash in 2016.

To speed up lease development, Reuters reports the bureau has set a 75-day deadline for processing drilling permits, making it the first time the agency has mandated a timeline for permit approval. The BOEM is also offering longer 10-year lease terms for some areas.

Meanwhile, many environmental advocates are criticizing the sale, saying increased drilling in the Gulf endangers the health of nearby communities, fisheries, and wildlife.

"We are lucky to have thriving coral reefs just off the Texas coast home to soaring manta rays, car-sized corals, and colorful fishes," Anna Farrell-Sherman with Environment Texas said in a statement. "Destroying these ecosystems and setting us up for a devastating oil spill is not only reckless, but undermines our trust that the BOEM has the best interests of our communities at heart."

Also this week, the annual Offshore Technology Conference announced it will postpone its 2021 event until mid August. The major oil and gas conference normally takes place each spring in Houston.

This year many conferences planned in the Bayou City, like CERAWeek, canceled or went entirely virtual due to the coronavirus. Many small energy companies rely on these conferences for revenue and networking.

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