In a statement posted on its website, the American Petroleum Institute (API) said it welcomed a court decision “averting shutdown of [the] Gulf of Mexico”.
The API noted in its statement that a federal court granted the National Marine Fisheries Service (NMFS) more time to complete a new biological opinion for the U.S. Gulf of Mexico and avoid significant consequences for American energy security.
In the statement, the API highlighted that, earlier this year, the U.S. District Court for the District of Maryland vacated the NMFS 2020 Biological Opinion for Gulf of Mexico Oil and Gas activities (BiOp) effective December 20. The API said in the statement that, by vacating the BiOp without allowing enough time for NMFS to issue a new one, the court decision had threatened to shut down new and existing oil and natural gas operations in the U.S. Gulf of Mexico.
“We welcome the court’s pragmatic decision to allow NMFS more time to complete a new biological opinion for oil and natural gas operations in the U.S. Gulf of Mexico,” API Senior Vice President and General Counsel Ryan Meyers said in the statement.
“[This] ruling provides only temporary relief and work still must be done to avoid disruptions to the backbone of our nation’s energy supply,” he added.
“We stand ready to work with NMFS and offer our industry’s expertise to complete a new biological opinion that balances environmental protection and the world’s growing need for affordable, reliable energy,” he continued.
The API noted in the statement that energy production in the U.S. Gulf of Mexico is “critical for not only meeting current and future energy demand, but also for supporting conservation programs, driving state and local economies, and helping the U.S. meet our emissions reduction goals”.
The organization stated that, in 2024, 14 percent of total U.S. crude oil production and two percent of natural gas production is projected to come from the Gulf of Mexico.
NOIA Pleased
In a release sent to Rigzone, National Ocean Industries Association (NOIA) President Erik Milito said, “we are pleased with the court’s decision to grant the requested relief, allowing the federal government additional time to issue a new Gulf of Mexico Biological Opinion”.
“This ruling is crucial for maintaining our energy security, affordability, and national security, all of which depend on the uninterrupted supply of oil and gas from the Gulf of Mexico,” he added.
“It has become readily apparent to elected officials on both sides of the aisle that an impairment of production from the Gulf of Mexico could lead to a cascading effect throughout the American economy, delivering an unwelcome blow to consumers still reeling from inflationary impacts,” he warned.
In the release, Milito said the Gulf of Mexico is a powerhouse in the global energy landscape, highlighting that, if it were a country, it would rank among the top twelve oil producers worldwide.
“This region supports nearly 435,000 jobs, produces approximately two million barrels of oil daily, and funds essential conservation and coastal resilience programs,” he said.
“Its role as a vital and well-established energy hub is indispensable to the U.S. economy and national security,” he added.
Milito warned in the release that potential permitting and operational delays or logjams pose significant risks, “injecting unnecessary uncertainty into this critical sector”.
“We must continue to support and protect the Gulf of Mexico’s energy production to ensure stability and growth for our nation and reduce dependence on volatile global markets and adversarial nations such as Russia or Iran,” he added.
Rigzone has asked the NFMS, the U.S. Department of the Interior (DOI), and the U.S. Department of Energy (DOE) for comment on the API and NOIA’s statements. The DOI declined to comment. At the time of writing, the NFMS and DOE have not yet responded to Rigzone.
EIA, BOEM
In its latest short term energy outlook (STEO), which was released earlier this month, the U.S. Energy Information Administration (EIA) projected that crude oil production from U.S. Federal leases in the Gulf of Mexico will average 1.77 million barrels per day this year and 1.82 million barrels per day next year. This production averaged 1.87 million barrels per day in 2023, the STEO showed.
The U.S. Bureau of Ocean Energy Management (BOEM) states on its website that the Gulf continues to be the nation’s primary offshore source of oil and gas, generating about 97 percent of all U.S. OCS oil and gas production.
“OCS activities generate substantial revenues from lease sales, royalties on production, and rental fees,” BOEM adds on its site.
“These funds are distributed to the U.S. Treasury and several different programs through various revenue sharing laws. The largest portion goes to the General Fund of the U.S. Treasury, which benefits all U.S. citizens through funding of daily operations of the Federal Government,” it adds.
BOEM’s site shows that the last Gulf of Mexico region lease sale was GOM Lease Sale 261. This lease sale was held on December 20, 2023, the site highlights. According to the site, there are three GOM lease sales scheduled to be held from 2024 to 2029.
The API represents all segments of America’s natural gas and oil industry, which supports nearly 11 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans, the organization’s website states.
NOIA notes in its release that it “represents and advances a dynamic and growing offshore energy industry, providing solutions that support communities and protect our workers, the public and our environment”.
To contact the author, email andreas.exarheas@rigzone.com