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The U.S. Holds Its First Oil And Gas Lease Sale Since IRA Was Passed

The U.S. Department of the Interior is holding on Thursday the first lease sales for oil and gas drilling rights since the Inflation Reduction Act (IRA) came into effect.

The IRA included congressional direction on oil and gas leasing through the Act if federal rights of way are offered for renewable energy projects. The Bureau of Ocean Energy Management (BOEM) and Bureau of Land Management (BLM) have taken steps to comply with the provision that the Interior should carry out some lease sales.

On Thursday, a modest lease sale of parcels in New Mexico and Kansas is being held. A total of 19 parcels are on offer on 3,300 acres in New Mexico’s portion of the Permian basin, as well as an additional 26 parcels on 6,800 acres in Cheyenne County, Kansas.

While oil and gas production in Kansas is not significant compared to other states, New Mexico is the second-largest oil-producing state after Texas, with which it shares the top-producing basin, the Permian.

In 2021, New Mexico accounted for 11.1% of U.S. crude oil production, second only to Texas and its share of 42.4%, per Energy Information Administration (EIA) data. 

Last year, New Mexico saw the highest crude oil production growth of any U.S. state last year, with output gains of 300,000 barrels per day (bpd) accounting for half of America’s oil production increase, the EIA said in a report earlier this month.

Total U.S. crude oil production increased by 600,000 bpd in 2022 compared with 2021, averaging 11.9 million bpd, per EIA’s Monthly Crude Oil and Natural Gas Production report.

For the third year in a row, New Mexico’s oil production growth eclipsed the growth of crude output in any other U.S. state, including Texas, the biggest U.S. oil-producing state and also home to part of the Permian shale basin.

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By Michael Kern for Oilprice.com

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  • George Doolittle on May 25 2023 said:
    Again Columbia is one of the largest diversified commodity producers in the World so this will continue to pressure Venezuela and possibly even Guyana which are too overexposed to just one commodity namely oil.

    Still that's a great commodity to be overexposed too going on for some time now. At one time Venezuela used to export massive volumes of LNG to the USA but only Canada is left able to do that forever seemingly now (at least one decade equal to 10 years be the same.) Brazil ran into a similar situation when trying to export ethanol into the United States namely the USA simply produced so much at so low a cost as to "push" Brazilian ethanol product elsewhere.

    The US Dollar is starting to sustain very violent moves to the upside as well something not seen in many ways *EVER* upon post World War 2 USA anyways. Truly mind blowing move higher in nVidia equity today should one move beyond strictly pure play integrated oil names although those too have had amazing runs to near record highs over the past 12 Months.

    Expecting Tesla Cybertruck to start smashing sales records but there is still much to be concerned about as so many have been priced out at retail due to massive inflation adjustments in a very negative way to US growth going on for many Years now. Still natural gas futures remain at rock bottom lows going on forever now as well.

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