A return of ‘drill, baby, drill’ policy?

How will the coming Presidential election in the United States shape the future of the offshore oil and gas industry? President Biden has announced he would not seek a second term and has endorsed Vice President Kamala Harris to take his place as the Democratic presidential nominee. What would the Harris Administration’s stance on energy be? There is no reason to think that she would not continue the current administration’s green energy policies, incentivising investment in offshore and renewable energy, EVs, hydrogen and carbon capture. A Harris Administration would support the Department of Energy’s ambition to develop 30 GW of offshore wind by 2030.

The Biden Administration’s stance on oil and gas development has been far less friendly. The Department of Interior (DOI) slow-walked the release of the mandated five-year offshore oil and gas lease sales programme, while also trying to cancel existing lease sales. And only at the direction of the US Court of Appeals for the Fifth Circuit did it hold Gulf of Mexico Lease Sale 261 in 2024, including 6M acres of blocks that had been previously excluded from the sale.

Siding with environmentalists, the administration had removed the tracts from the Gulf of Mexico offshore oil and gas lease sale and imposed offshore vessel speed restrictions of 10 knots out of concerns for the environmental impact on Rice’s whales.

But a previous analysis by the National Oceanic and Atmospheric Administration said such restrictions were unjustified.

Offshore oil and gas lease sales are now linked with The Inflation Reduction Act of 2022 (IRA), which backs billions of dollars of investment in clean energy technologies. Led by senator Joe Manchin (I-West Virginia), chairman of the Senate Committee on Energy and Natural Resources, IRA prohibits DOI from issuing any offshore wind and solar energy lease sales unless it holds onshore and offshore oil and gas lease sales. The DOI submitted a five-year offshore oil and gas lease sale programme with the bare minimum number of lease sales — three — which are scheduled for the Gulf of Mexico for 2025, 2027 and 2029. It is the fewest number of offshore oil and gas lease sales in the programme’s history.

The Biden Administration has also looked to curb US LNG exports.

If Mr Trump’s first term in office and the Republican National Convention (RNC) are any indication of the direction of future US offshore energy policy, you can fully expect an acceleration of fossil fuel development.

Mr Trump wants to return to “drill, baby, drill,” as he declared during his acceptance speech at the RNC.

The mantra is an expression of support for the oil and gas industry and was first used at the Republican National Convention during the 2008 Presidential Election. It was popularised during the campaign by Sarah Palin, then governor of Alaska and the Republican vice-presidential running mate of John McCain. The McCain-Palin ticket lost to President Barack Obama and Vice President Joe Biden.

Mr Trump wants to increase oil and gas production as a means of lowering domestic energy costs, reducing inflation, creating jobs, and pushing American energy independence. On 6 November, we will find out the direction of US energy policy.