America’s Offshore Energy Potential Takes a Blow

Mark Green
Posted January 7, 2025

It’s too bad – for America’s future energy security and potential economic growth – that at its 11^th hour the Biden administration took an action that could hamper U.S. oil and natural gas development in decades to come – withdrawing 625 million coastal acres from future offshore leasing, defying American voters and energy realities in one fell swoop. 

Mike Sommers, API president and CEO: 

“American voters sent a clear message in support of domestic energy development, and yet the current administration is using its final days in office to cement a record of doing everything possible to restrict it.” 

Indeed. By invoking a 1953 law to withdraw acreage off the entire Atlantic Coast, the eastern Gulf of Mexico, the Pacific coast from Washington to California and parts of Alaska’s Northern Bering Sea, President-elect Trump’s ability to pursue his policy of energy dominance is more complicated and the actual impacts could be felt several presidents into the future.   

The future energy stakes are large. Between13-14% of U.S. crude oil is produced from offshore federal waters in the Gulf of Mexico and areas along California, according to the U.S. Energy Information Administration. In 2023, 1.7% of all U.S. dry natural gas production occurred came from federal offshore waters. 

Oil and gas demand won’t go away in the foreseeable future, so new sources will be needed – and bans like these increase the likelihood that future supplies come from somewhere other than in the U.S. Americans, and our energy security, could be the loser. 

The economic stakes are big, too. Studies in recent years projected the U.S. could see hundreds of billions of dollars in cumulative investment over 20 years along the Atlantic and Pacific outer continental shelves (OCS), the Eastern Gulf of Mexico and Alaska, supporting hundreds of thousands of jobs nationwide. Government coffers would benefit as well, with a recent EIAP analysis conducted for API showing that vigorous offshore oil and natural gas development could generate more than $8 billion in additional revenue to government by 2040. 

Unfortunately, as the clock is about to strike midnight on the Biden administration, it seems to dismiss the fact that a large majority of Americans in a recent New York Times/Sienna College poll said they support increased domestic production of oil and natural gas.  

Instead of working to help secure America’s energy future, in which oil and natural gas are projected to remain the leading fuels, that future is less certain because of restrictions on oil and natural gas development in the years and decades ahead. 

U.S. Sen. Lisa Murkowski of Alaska on X: 

“These withdrawals are sweeping, limiting the options that future administrations and Congresses have for where our energy should be produced and preventing more thoughtful decisions about what should be made available in each five-year national leasing program.” 

As Murkowski notes, the administration has been clear about curbing future American oil and natural gas production. When the Interior Department issued the new federal offshore leasing program in 2023, officials said they had scheduled the fewest sales in history. Similarly, the Bureau of Land Management recently announced it had proposed a lease sale for the designated area of Alaska’s Coastal Plain that included the “minimum acres required.”  

Any way you look at it, it’s bad energy policy – bad for America’s future. 

During an interview with Fox Business, Sommers pointed to potential long-term harm: 

“These kinds of midnight regulations that are being put in place by the Biden administration are going to undermine American energy security and hurt American consumers. That's not what America voted for.” 

Congress can reverse President Biden’s new OCS withdrawals legislatively, and Sommers encouraged lawmakers to act: 

“Congress and the incoming administration should fully leverage the nation’s vast offshore resources as a critical source of affordable energy, government revenue and stability around the world. We urge policymakers to use every tool at their disposal to reverse this politically motivated decision and restore a pro-American energy approach to federal leasing.”