Administration Releases Offshore Leasing Plan; 301 Tariffs Action Expected  

offshore
Tim Tarpley, SVP Government Affairs & Counsel

Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley

 

At 5:08 p.m. on the day before a holiday weekend, the Department of Interior finally issued the proposed plan for the 2023-2028 National OCS Oil and Gas Leasing Program. This release was late, missing the Department’s own self-imposed deadline of June 30. The proposed plan includes 10 potential lease sales in the western and central Gulf of Mexico  and one potential lease sale in Alaska’s Cook Inlet.

The release of the Proposed Program follows the 2018 publication of the Draft Proposed Program (DPP) which occurred during the Trump Administration. This step is the second of three required steps before the Secretary of the Interior can approve the Final Program and lease sales can actually occur. Following publication in the Federal Register, the Interior Department will seek public comment on the Proposed Program.

While it is positive news that the report was finally issued, the big takeaway from this release is that significant uncertainty remains for our nation’s offshore leasing program. The program opens up the possibility of 11 lease sales over the next five years, but it is also possible the Biden Administration chooses not to conduct those sales.

This uncertainty is part of the reason offshore investment has been decreasing. In order to truly bring back the kind of investment needed for new offshore exploration to occur, the Administration is going to have to provide some certainty to this proposed plan. Specific details about upcoming lease sales will be needed. Energy Workforce will continue to work with the Department of the Interior and other trade associations on the development of this program. 

President Biden Action on 301 China Tariffs Expected Next Month

Discussion around Washington continue to swirl around the prospect of President Biden altering the Trump-era China 301 tariff process, including speculation the Administration is likely to announce action to lift a narrow set of tariffs on Chinese imports. The details are still in flux, however, given that the Administration is looking at any way to curb inflation. We can expect the first action to be targeted at consumer goods.   

The action could involve three parts. First, many suspect duties on consumer goods, like bicycles, to be lifted. It is unknown what percentage of the $370 billion in tariffs will include, but it is expected to be a modest portion at first, perhaps around $10 billion or so. 

In conjunction with this announcement, it is expected that the U.S. Trade Representative could also re-open the exclusion process for companies to petition for exclusions of remaining tariffs. This aspect could be the most impactful for our membership. Energy Workforce had success in obtaining product exclusions for some OFS equipment in the past. Should Member Companies again be interested in the process, Energy Workforce will certainly lead this effort on behalf of the sector. Which products will be included in this exclusion process is unknown. However, it is likely that the Administration will choose products that have the greatest possibility to curb inflation, as well as products that have not received significant comments in support of maintaining the tariff.    

Alongside those actions, the Administration will also announce a new tariff investigation under Section 301 of the 1974 Trade Act that will target sectors of the Chinese economy that are heavily subsidized by the Chinese Communist Party. This investigation would likely target semiconductors and battery technology. Given the worldwide shortages of much of these products, however, there may be exceptions. If so, the details will need to be carefully crafted as to not worsen already strained supply chains. 

As details of these potential actions come forward, Energy Workforce will keep membership informed on potential impacts and will work with the Administration on targeted outcomes. 

If you would like to get involved with Energy Workforce advocacy efforts or the Government Affairs Committee, contact SVP Government Affairs Tim Tarpley.


Tim Tarpley, SVP Government Affairs & Counsel, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.


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