An Analysis of, and Communicating, Life Cycle Greenhouse Gas Emissions from Offshore Oil and Gas Leasing

Every five years the Bureau of Ocean Energy Management (BOEM) embarks on a massive task for a small federal agency: planning new oil and natural gas leasing on the outer continental shelf, and analyzing the environmental impact of the potential leasing. Over time this has evolved into multiple ways of evaluating the economic and environmental impact, including greenhouse gas (GHG) emissions. Multiple leasing scenarios, activity levels, global warming potentials, emission reduction targets, replacement fuels, and changing energy and policy demands over 70 years threaten to overwhelm, and confuse, those who must make the decision, as well as the general public, on how often and how much acreage of federal waters to be leased to energy companies for potential extraction. BOEM’s analyses have consistently shown that isolated decisions for the outer continental shelf by the Secretary of the Interior result in relatively unchanged domestic GHG emissions volumes. However, starting with our analysis of the 2024-2029 Oil and Gas Program, that has begun to change in a meaningful way. Shifting real time use of energy, as well as projected changes from the Inflation Reduction Act, have begun to show significant reductions in the use of natural gas, and some of the first shifts are beginning to show for oil, when BOEM’s economic model, MarketSim, evaluates what other fuels would be used in place of new offshore production. This, in tandem with two different models- Offshore Economic Cost Model (OECM) for offshore, and the Greenhouse Gas Life Cycle Energy Emissions Model (GLEEM), which convert energy consumption into GHG emissions volumes, now show a substantial reduction in emissions from new production which heavily relies on natural gas. Using a combined quantitative and qualitative analysis to examine changes to the overseas oil market when new leases are withheld, there are expected to be substantially fewer emissions at the global scale. This appears to be a clear-cut answer, but it is not. The way the Paris Agreement is structured countries are required to set targets for their own emissions, not other countries. When examining the domestic results, the Global Warming Potentials, social cost of carbon, the expected oil-to-gas ratio of a given lease, and the level of activity on a new lease, the U.S. may make achieving its own 2025 and 2030 targets under the Paris Agreement, and net-zero by 2050 harder by increasing domestic GHG emissions, while reducing global GHG emissions. This results in significant challenges in clearly communicating these results to federal decisionmakers and the general public.