United States Oil Auction

The United States is beginning to auction off the right to drill in oil fields to private fossil fuel corporations. The area being auctioned off to drill is located in the Gulf of Mexico and contains hundreds of thousands of acres. Major companies such as Exxon, British Petroleum, and various others have proposed a total sum of over $190 million. The region is estimated to contain over one billion barrels of oil. The hope for these actions is that the United States will be able to achieve climate change goals with the absence of fossil fuel pollution caused by the federal government. 

In order for the oil to begin to be harvested underneath the Gulf of Mexico, companies will have to establish and expand infrastructure in the region. This could take years to accomplish and goes against climate goals of reducing fossil fuel production into the upcoming decade. Federal government agencies plan on doing the same in other parts of the nation. Fossil fuel locations in states out west, such as Montana, are planned on being set up for auction in the upcoming months.

One of the biggest oil corporations to own space in the Gulf of Mexico, Shell, has the potential to create new oil rigs if the company wins the upcoming auction. Other major oil companies, such as British Petroleum and Exxon, would do the same if they win the drilling area. The amount of capital these companies are spending for the chance to drill is immense. Offers from these companies range in millions of dollars, with some all the way up to nearly $50 million dollars.

These auctions have angered various environmentalist groups. The amount of carbon pollution from oil extraction and burning makes up a major portion of the United State’s global emissions. In 2020, oil accounted for approximately one third of the U.S. energy consumption, but it was also the source of 45% of total annual U.S. energy-related carbon dioxide emissions. Environmentalists have stated that the Biden administration could find alternative solutions to auctions, one which has a less severe impact on the environment. If the federal government continues sales such as this, the footprint of United States domestic fossil fuel emissions will be difficult to decrease in upcoming years.