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Biden administration cancels sale of oil and gas leases as gas prices hit staggering record high

Joe Raedle/Newsmakers

The Biden administration disclosed Wednesday the Department of Interior will cancel three critical oil and gas lease sales in the Gulf of Mexico and Alaska's Cook Inlet.

The news comes as gas prices smash all-time records. As of Thursday afternoon, the national average price of gasoline was $4.41 per gallon, according to AAA. For diesel, the average price per gallon hit a staggering $5.55.

What are the details?

The Interior Department said in a statement that it "will not move forward with the proposed Cook Inlet OCS oil and gas lease sale 258," and officials blamed a "lack of industry interest in leasing in the area." The decision means more than 1 million acres of potentially oil-rich lands will remain untapped.

Meanwhile, the department also canceled two lease sales in the Gulf of Mexico.

"The Department also will not move forward with lease sales 259 and 261 in the Gulf of Mexico region, as a result of delays due to factors including conflicting court rulings that impacted work on these proposed lease sales," explained a statement from the Interior Department, Axios reported.

CBS News reported that anti-oil environmental groups welcomed the news. On the other hand, pro-oil groups blasted the Biden administration.

While it is true that it takes years for oil production to begin after a lease is sold, Frank Macchiarola of the American Petroleum Institute explained the decision to cancel the lease sales is yet another example of the Biden administration's hostility toward fossil fuels.

"The President has spoken about the need for additional supplies in the market, but his administration has failed to take action to match that rhetoric," Macchiarola told CBS News. "In the kind of price environment that we're seeing, there are negative consequences to shutting off oil and gas development, both politically and practically."

Anything else?

The Interior Department additionally emphasized to Fox Business that three-quarters of the nearly 11 million acres of "offshore federal waters already under lease" are not being used by oil companies, recycling a key Biden administration talking point from March.

While that may be true, Anne Bradbury, CEO of the American Exploration & Production Council, has described the talking point as a "red herring" precisely because of the arduous and lengthy process between a lease approval and the safe extraction of oil.

"It's really a distraction from the fact that this administration has paused leasing on federal lands, something that we're concerned about and something that we think needs to continue right away," Bradbury said. "The fact is that industry is producing at a higher level on existing leases on federal lands than in the last 20 years and these leases take many years to explore, to develop and produce on."

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