Congress instructed the Bureau of Ocean Energy Management (BOEM) on Sept. 14 to award the highest valid bids from Lease Sale 257 in the Gulf of Mexico—ending nearly a year of uncertainty for the federal offshore oil and gas lease auction.

Lease Sale 257 originally took place in November 2021, but a court vacated the sale in January. The sale was originally revoked by Judge Rudolph Contreras, who held the Interior Department culpable for not including foreign consumption in its greenhouse-gas emissions analysis and ignoring the role that oil and gas development has on climate change.

The climate change issues were originally brought up by environmental group Earthjustice on behalf of four other activist groups. However, these concerns seem to have been resolved and the lease sale reinstated as a result of the Inflation Reduction Act, according to the BOEM.

“Leases resulting from this sale include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species and avoid potential ocean user conflicts,” BOEM said in a statement. “The Inflation Reduction Act is a historic and transformational investment toward achieving President Biden’s ambitious goals to tackle the climate crisis while lowering costs for working families and creating good-paying jobs. It will enable the Interior Department to continue playing a leading role in the transition to a clean energy economy.”

The offshore oil and gas industry believes the leases will inject new life into not just the communities near the coast, but across the country.

“Communities along the Gulf Coast and throughout the country rely upon Gulf of Mexico oil and gas development for good-paying jobs, affordable energy supplies, and important funding for local infrastructure,” Erik Milito, president of the National Ocean Industries Association (NOIA), said in a statement.

BOEM has accepted 307 of the highest valid bids in the sale, totaling $189.9 million. Chevron Corp. submitted the highest total of bids at $47 million. Initially disappointed with the decision to annul Lease Sale 257, Chevron is “pleased” with its reinstatement and hopes the administration approves more sales.

“Chevron also looks forward to Lease Sales 259 and 261 and encourages the Administration to finalize a Five-Year Leasing Program as soon as possible,” Chevron told Hart Energy in a statement. “Projects in the Gulf of Mexico require years of planning and significant investment, so continued leasing is needed to provide future energy resources.”

The API shared similar sentiments.

“We are pleased that the Department of the Interior has finally offered the first offshore leases of this administration, but it is disappointing that it took 19 months and an act of Congress to get us to this point,” said API Vice President of Upstream Cole Ramsey in a statement to Hart Energy. “It is the responsibility of the federal government to conduct offshore lease sales based on the energy needs of U.S. consumers. As the current energy crisis grows and demand for affordable and reliable energy continues to outstrip supply, we urge the administration to uphold their responsibility and issue a final five-year program that includes all 11 lease sales.”

All terms and conditions for the sale are detailed in the Final Notice of Sale information package.

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