Key Takeaways
The U.S. offshore area shows great promise for increasing oil and gas production, with the Gulf of Mexico (America) expected to increase production from 1.8 million barrels per day to 2.4 million barrels per day.
Under Biden, the 5-year OCS plan calls for three lease sales — the fewest in history, but the Trump administration is supplementing it with its own plan.
A new OCS area in the “High Arctic” may be included to gain information about the area’s energy resources — a possible new addition to the U.S. OCS that is twice the size of California.
The Department of Interior is streamlining permitting, and technological breakthroughs are being applied to the OCS’s enormous energy resources.
In fiscal year 2024, production from OCS leases accounted for approximately 14% of domestic oil production and 2% of domestic natural gas production, yielding $7 billion in federal revenues.
Oil and natural gas industry leaders expect technological advancements, streamlined permitting, and sustained investment to increase production in the U.S. Gulf of Mexico (America), where oil production could rise from 1.8 million barrels to 2.4 million barrels daily. However, to keep offshore projects viable due to rising costs from tariffs and inflation, operators must refine supply chain strategies. U.S. oil prices have been as low as in the $50 a barrel range due to tariffs, OPEC+’s decision to accelerate output increases, and Saudi Arabia’s announcement that it can withstand a prolonged period of lower prices. Investments in offshore projects, which are on a longer cycle than those in shale oil basins because shale oil wells can be turned on and off quickly in response to prices, are needed to maintain offshore oil’s share of U.S. oil production. Despite the flexibility that shale basins provide for oil development, it is believed that shale oil production will eventually plateau and begin to decline, making it essential to grow offshore exploration.
The Trump administration is implementing an emergency permitting process for energy projects on federal lands, cutting approval times that typically take months or years to at most 28 days. Besides the quicker regulatory approval, technological advances, including artificial intelligence, are helping to increase production. Highly sophisticated projects are overcoming challenges that hindered oil production 20 years ago. For instance, last year, Chevron started production in a U.S. Gulf field under extreme subsea pressures of up to 20,000 pounds per square inch — a first for the industry.
More Offshore Lease Sales under Trump
The Interior Department is legally required to create a national oil and gas leasing schedule every five years. The Biden administration’s offshore oil and gas lease plan for 2025 to 2029 contains only three lease sales over 5 years — the fewest offshore oil and gas leases in the industry’s history and far fewer than the 47 sales proposed by President Trump in his first term. The three lease sales are the fewest possible under the Inflation Reduction Act, in which Congress insisted upon oil and gas lease sales if the Biden administration held offshore wind sales. The plan continues Biden’s record of leasing fewer federal acres for oil and gas than any president since World War II. Since 1992, no five-year oil lease plan has had fewer than 11 lease sales, and most have had 15 to 20. The Trump administration plans to hold an offshore lease sale for the U.S. Gulf in June — the first of the three lease sales in the Biden administration’s plan. The other two Biden administration lease sales are set for 2027 and 2029.
Trump’s Interior Department is drafting a new five-year lease plan for the Outer Continental Shelf (OCS), the 11th National OCS Program. Supplementing the one produced by the Biden administration, the new plan could include new zones in the Arctic and elsewhere to maximize energy development. The department is not proposing a specific timeline or locations for new leasing auctions. Instead, it wants stakeholders to provide insight and recommendations for leasing opportunities, to raise concerns, and identify other existing uses that may be affected by offshore leasing. Because Interior’s Bureau of Ocean Energy Management (BOEM) recently gained jurisdiction over a new planning area in the High Arctic and the boundaries of other outer continental shelf planning areas are being revised, new acreage may become available to drillers.
As of April 1, 2025, BOEM manages 2,227 active oil and gas leases covering approximately 12.1 million acres in OCS regions. Of these, 469 leases are currently producing oil and gas. In fiscal year 2024, production from OCS leases accounted for approximately 14% of domestic oil production and 2% of domestic natural gas production, yielding $7 billion in federal revenues. The OCS holds vast quantities of undiscovered energy resources, with a mean estimate of 68.79 billion barrels of oil and 229.03 trillion cubic feet of natural gas. The only way to determine the actual mineral wealth is through exploration that accompanies leasing and is enhanced by evolving technologies.
Trump Administration Looking at Oil Development in the Arctic Ocean
The Trump administration is eying the possibility of leasing oil in the Arctic Ocean that is more than 200 miles from shore. The Trump administration plans to add a “High Arctic” planning area to its federal offshore oil and gas leasing program, as noted in a formal solicitation for public comment on April 29. BOEM is accepting public comments for 45 days on its proposal to reorganize the federal offshore leasing program, including adding the High Arctic area. The new area proposed for the oil and gas leasing program is part of the ocean territory that the U.S. government claims a right to following a sea-mapping program conducted over several years. The area is part of the U.S.’s “extended continental shelf,” which goes beyond exclusive economic zone borders that typically end at 200 nautical miles from shore. In December 2023, the U.S. State Department began claiming over 200,000 square miles of Arctic seafloor in the extended continental shelf, which is more than twice the size of California.
USGS Finds More Oil and Gas in Gulf Coast Formations
A new US Geological Survey assessment estimates that the Cretaceous-era Hosston and Travis Peak formations beneath southeast Texas, central Louisiana, and the Mississippi River delta could hold up to 28 million barrels and almost 36 trillion cubic feet of technically recoverable oil and natural gas. Since much of the untapped gas is classified as tight, extraction would require drilling or fracking at depths of 5,000 to 10,000 feet.
Conclusion
Offshore oil and gas production continues to be viable and essential, providing 14% of U.S. oil production in 2024. Because of technological advancements, streamlined permitting, and sustained investment to increase production in the U.S. Gulf of Mexico (America), offshore oil production could rise from 1.8 million to 2.4 million barrels per day. Furthermore, in recognition of the Biden administration’s anemic 5-year OCS leasing plan — comprising just three sales over five years for the fewest leases in history — Interior Secretary Doug Burgum has announced the drafting of a new 5-year plan to supplement it, which will have many more future lease sales. President Trump is also investigating the possibility of leasing oil in the Arctic Ocean that is more than 200 miles from shore.
