Trump Administration Commits to Ambitious Offshore O&G Lease Schedule
Following quickly on the passage of the Trump Administration's One Big Beautiful Bill Act, the Department of Interior has scheduled a series of oil and gas lease sales for the U.S. Gulf and for Cook Inlet in Alaska. It represents the most ambitious long-term lease plan for offshore Alaska in years.
“The One Big Beautiful Bill Act is a landmark step toward unleashing America’s energy potential,” said Interior Secretary Doug Burgum. “Under President Trump’s leadership, we’re putting in place a bold, long-term program that strengthens American Energy Dominance, creates good-paying jobs and ensures we continue to responsibly develop our offshore resources.”
The lease plan includes a commitment to hold auctions twice annually for acreage in the Gulf between 2025 and 2040. Interior noted that the Gulf offshore patch accounts for about 15 percent of U.S. oil output; as the best onshore shale fields begin to mature in the Eagle Ford and Permian, the Gulf will be responsible for an increasing share of the total.
The announcement is a major uptick in commitment to leasing in Alaska, but it remains to be seen whether it results in additiona activyt. Unlike in the Gulf, industry interest in Cook Inlet has been tepid in recent years. Only one company, Hilcorp, submitted bids in the last two federal and state lease auctions. The most recent BOEM auction for the area was held in 2022, and it secured a single bid of $64,000 from Hilcorp for a single lease block.
The announcement is supported regionally. Alaska's state government has a long-term commitment to the success of the oil and gas industry, which is the source of a large share of the state's tax revenue.
“Continued activity and investment in the Cook Inlet is needed now more than ever as we continue to try to secure local natural gas supplies for Alaskans along the Railbelt,” says Commissioner John Boyle of the Alaska Department of Natural Resources earlier this year. “The department will continue to do all we can to offer highly competitive new leases in the inlet and to actively manage all existing leases to ensure that known resources are brought into development.”
The near-term oil price outlook may not encourage more E&P bidding or FIDS, though it is very favorable for American consumers. U.S. EIA forecasts an average Brent crude price of just $51 per barrel next year, down from a current price of $66 - leading to cheaper gas and diesel at the pump. The agency expects that total U.S. oil production will fall slightly in response to lower potential for profit.
"As crude oil prices fall, we expect U.S. producers will accelerate the decreases in drilling and well completion activity that have been ongoing through most of this year, and we forecast U.S. crude oil production will decline to 13.1 million b/d by 4Q26," the agency said in a statement.