Now is the time for the United States to finally achieve real energy security by reducing our dependence on fossil fuels and instead, charting a clean energy future. To this end, the Biden administration should refuse to expand offshore oil drilling and release a five-year plan with no new leasing.
More lease sales will not lower gas prices
New leases will have no impact on today’s gas prices. There is no lack of leases, as the oil and gas industry is already sitting on 7,700 unused, approved drilling permits. The wells themselves take between four years to 10 years to permit, engineer, drill, and transport into the ocean before oil comes online.
Beyond leasing and permitting in federal waters, there are supply chain issues from product to market. For example, oil refiners idled, and some even reduced their capacity during the early part of the pandemic when demand for oil and gas dropped sharply. This has created a bottleneck and refiners—enjoying sky-high prices as well—have chosen not to build back capacity after these reductions. In a letter sent to the largest oil and gas companies, President Joe Biden worked to hold refiners accountable by asking the biggest companies to answer for this choice.
The oil and gas industry puts profits over people
Communities that are near oil pipelines and refineries face immense environmental and health risks from offshore drilling. The Gulf of Mexico is packed with 53,500 oil and gas wells in federal waters, representing 97 percent of all offshore wells, with the remainder primarily in Alaska and California.
Offshore rigs have onshore refineries, and about 150 refineries and chemical facilities are positioned in an 85-mile stretch between New Orleans and Baton Rouge, Louisiana, dubbed “Cancer Alley.” In 2017, the NAACP published a report that found that more than a million African Americans live within a half-mile of oil and natural gas production, processing, or transmission and storage facilities, leading to elevated risks of cancer and asthma attacks from toxic air emissions. For example, the predominantly Black community of Reserve, Louisiana—which houses the Shell Convent Refinery and Marathon Garyville Refinery in just 17 square miles—has a cancer risk from air toxicity that is 50 times the national average.
Meanwhile, fossil fuel industry CEOs rake in millions. According to a CAP analysis with data from the AFL-CIO, the CEOs of the top 10 U.S. oil and gas companies have collectively been compensated nearly $180 million in the fiscal year 2020. This is an average of 133 times their median employee pay and 3,540 times more than the median household income in Louisiana.
The oil and gas industry won’t clean up its mess, leaving taxpayers holding the bill
The U.S. coastline continues to be one of the largest population centers across the country and is predominantly comprised of communities of color: 51.5 percent of the population of coastal communities identify as other than non-Hispanic white. These communities are also facing the most direct threats of climate change. Since 1980, the Gulf Coast states alone have experienced 209 extreme weather events that have each caused a billion dollars in damages. Collectively, that is almost $1 trillion.
These communities have also been directly damaged by drilling for oil and gas off their shores. The risk of another oil spill also harms the mental and physical health of those that are natural resource-dependent, clean-up workers, coastal residents, and health-vulnerable populations. In California, communities have been left with aging infrastructure and oil-slicked beaches. Most recently, in October 2021, a damaged pipeline caused an initial 25,000 gallons of crude oil to spill 4.5 miles away from Huntington Beach, causing beach closures and harming nearby wildlife. Alaska famously experienced a catastrophic oil spill when, in 1989, the oil tanker Exxon Valdez spilled 11 million gallons of oil into Prince William Sound, devastating the economic as well as food resources of Alaska Natives. The Gulf States have had many disasters, including BP’s Deepwater Horizon explosion that leaked 4 million barrels of oil in 87 days as well as the longest oil spill in U.S. history at the mouth of the Mississippi in which Taylor Energy’s abandoned wells have been leaking for 18 years.
But the risk doesn’t end once a well has been tapped dry. Though oil and gas companies are responsible for decommissioning and plugging wells, there has been overwhelming neglect to do so. In fact, more than 3,000 wells, with a median age of 38 years since they were drilled, lay offshore awaiting to be fully decommissioned. At best, only 10 percent of estimated decommissioning costs for offshore drilling rigs, wells, and pipelines are secured by bonds, leaving taxpayers to shoulder the costs of cleaning up bankrupt companies’ messes.
Clean offshore energy is here
In addition to the threats to communities and the environment posed by offshore oil and gas drilling, there’s also a cleaner, cheaper energy option. Offshore wind could provide more than 2,000 gigawatts (GW) of energy in the United States—two times the current generation of the entire U.S. electric grid. The National Renewable Energy Laboratory (NREL), in partnership with the BOEM, released a report that found that offshore wind in the Gulf of Mexico alone offers “a technically feasible resource potential of 510 megawatts per year,” which would be twice the amount of energy consumed in the Gulf states. The first proposed offshore wind lease sale for the Gulf of Mexico is expected to be released in late 2022.
These clean energy investments offer key transition opportunities for Gulf communities that have been forced to be dependent on oil and gas jobs. The development of just two offshore wind farms off the coasts of Texas and Louisiana could create as many as 17,500 jobs. Those jobs are especially critical to communities that the oil and gas corporations have left behind. For example, in the two towns of Lafayette and Houma, Louisiana, oil and gas jobs have been cut in half over the past decade.
Offshore wind also offers the opportunity for family-sustaining union jobs. Commitments to workforce training and community benefits have been built into recent offshore wind lease sales. For example, the Carolina Long Bay sale included a 20 percent credit for bidders committed to contributing to workforce training programs in offshore wind, development of U.S. domestic supply chain of offshore wind, or both. In the recently proposed California offshore wind lease sale, these same bidding credits were proposed as well as a 2.5 percent credit to bidders who execute a community benefits agreement. There’s also a requirement for lessees to engage with Tribes, underserved communities, ocean users, and agencies. These types of leases are competitive: An acre of development to an oil and gas company may go for as low as $22 whereas the Carolina Long Bay offshore wind sale brought in approximately $3,000 per acre.
Conclusion
Locking the United States into more offshore drilling lease sales will not lower gas prices, but it will lock Gulf and Alaskan communities into even more destruction and damage. By releasing a five-year plan with no new lease sales, the Biden administration can continue its focus on clean energy jobs and a lower-priced and healthier future.
The authors would like to thank Jenny Rowland-Shea, Sally Hardin, and Will Beaudouin at the Center for American Progress and Cynthia Sarthou, executive director at Healthy Gulf, for their contributions.