The Trump administration is pushing to scale up oil and gas production in the US, despite heavy criticism and environmental concerns. It is urging the establishment of an 11th National Outer Continental Shelf Leasing Program to open up areas in Alaska, California, and the Eastern Gulf of Mexico. The Interior Department is advancing a new 5-year leasing program to increase oil and gas development, reversing prior restrictions.
The newly favorable regulatory environment has led to a 55% increase in permits to drill on public lands over the past year. However, actual industry investment and activity are being tempered by market conditions and efficiency improvements. With regard to efficiency improvements, even with record crude oil production last fall, the number of active oil and gas rigs in the US has declined from 750 in December 2022 to 517 last October.
The latest development was the offer of new offshore oil and gas exploration opportunities in Alaska’s Cook Inlet. The sale was for the rights to drill in more than one million acres and was the first of six offshore oil and gas auctions in Alaska that Republicans mandated last year when the tax bill was passed. The so-called “Big Beautiful Cook Inlet Oil and Gas Lease Sale” opened on February 2 with bids due on March 3. The deadline came and went and there was not a single bid.
The attempted sale was seen as a key test of the industry’s appetite for investment in Alaska offshore oil. The next auction in the Cook Inlet is scheduled for March 2027.
