Pearson gold heist suspect arrested after flying into Toronto from India
Another suspect is in custody in connection with the gold heist at Toronto Pearson International Airport last year, police say.
Oil companies offered a combined US$264 million for drilling rights in the Gulf of Mexico on Wednesday in a sale mandated by last year's climate bill compromise.
The auction was the first in the Gulf in more than a year and drew interest from industry giants including ExxonMobil, Shell and Chevron. It could further test the loyalty of environmentalists and young voters who backed President Joe Biden in 2020 but were frustrated by this month's approval of the huge Willow drilling project in northern Alaska.
Developing the leases for sale in public waters in the Gulf of Mexico could produce more than 1 billion barrels of oil and more than 113 billion cubic metres of natural gas over 50 years, according to a government analysis. Burning that oil would increase planet-warming carbon dioxide emissions by tens of millions of tons, the analysis found.
Winning bids Wednesday were 38% higher than the last auction and marked the most received since Gulf-wide bidding resumed in 2017. The amount of acreage receiving bids was comparable to 2021.
There's another Gulf lease sale scheduled in September. It's unknown how many more the administration could conduct, which could hinder companies' expansion plans.
Yet analyst Sami Yahya said approval of the ConocoPhillips Willow project in the National Petroleum Reserve-Alaska bodes well for the industry and prospects for future leasing.
"It showed that the Biden administration is likely trying to strike a balance between energy transition and energy security," said Yahya with S&P Global.
The Department of Interior sale comes two days before a deadline set in last year's climate bill that Biden signed into law.
The measure prohibited leasing public lands for renewable power unless tens of millions of acres are first offered for fossil fuels. That was a concession to get support from West Virginia Democrat Joe Manchin, a fossil fuels industry supporter.
The climate law also raised the royalty rate companies must pay on oil they produce. The Biden administration set the rate for Wednesday's sale at the maximum allowed -- 18.75%, versus 12.5% historically -- yet that did not appear to curb interest.
The parcels offered at the auction covered 295,000 square kilometres an area larger than Arizona. Like past auctions of similar magnitude, only a fraction of the available acreage -- about 6,700 square kilometres -- got bids.
The vast majority of the 313 tracts that received offers had only one bidder.
Bids from companies were opened Wednesday in New Orleans, in a state that is economically dependent on the oil and gas industry and especially vulnerable to climate change.
Since it takes years to develop offshore parcels before crude is pumped, the leases could produce oil and gas long past 2030, when scientists say the world needs to have drastically cut greenhouse gas emissions to stave off catastrophic climate change.
Sea level rise is a factor in Louisiana's steady loss of coastal wetlands, which in addition to harboring a variety of fisheries and wildlife, provide a buffer between inland population areas and hurricanes that scientists say are growing stronger as the world warms.
Louisiana's complicated relationship with the industry also is illustrated by lawsuits filed by coastal parishes over decades of alleged damage to wetlands from dredging canals to service oil and gas drilling.
ExxonMobil offered the high bids on 69 tracts in the northwest Gulf. The company in 2021 bid nearly US$15 million for tracts in the same part of the Gulf, which includes shallow waters -- less than 200 metres deep -- where oil has mostly played out and there are few active leases.
Analysts said the acquisitions appeared linked to Exxon's pursuit of a government-industry collaboration to capture and store carbon dioxide from industrial plants in the Houston Ship Channel.
The carbon dioxide would be carried away in pipelines and injected deep under the floor of the Gulf of Mexico, a process known as carbon capture and sequestration, or CCS. Oil and gas companies are banking on carbon capture to extend the lifespan of their fossil fuel facilities, but critics say the technology is unproven and less effective than switching to renewable wind and solar energy.
All the leases being sold are for oil and gas exploration and development only, federal officials said.
That means Exxon would need Interior Department cooperation to revise its lease agreements before the company could pursue carbon capture, said Justin Rostant, a principal analyst with industry consulting firm Wood Mackenzie.
"There might be some risks associated with whether they're actually able to use it for carbon capture," Rostant said. "I'm not sure how that's going to play out for Exxon."
ExxonMobil spokesperson Todd Spitler declined to say if there was a link between its bids and the ship channel proposal.
"We will work with the Department of Interior on plans for the blocks once they are awarded," he said.
Before the final bidding results were announced, representatives from the American Petroleum Institute and National Ocean Industries Alliance were calling for more lease sales to be scheduled so companies can start exploration work.
Environmentalists again called on Biden to abide by his campaign pledges to end new drilling and leasing on federal lands and water. Diane Hoskins with the group Oceana said the Democrat can "make good on his promise" by including an end to leasing in a long-overdue five-year plan for the Gulf.
A lawsuit against Wednesday's sale is pending before a U.S. District judge in Louisiana. It takes 90 days for the government to evaluate any bids, which means they still could be blocked before being issued. The 2021 sale was subsequently blocked by a federal judge, then reinstated under last year's climate bill.
"There's been a lot of talk from the administration about taking climate change seriously and moving our economy away from fossil fuels, and yet we continue to see massive oil and gas projects, both onshore with Willow and offshore in the Gulf of Mexico," said George Torgun, an attorney with Earthjustice representing environmental groups in the case.
Chevron said in a Monday court filing that it could lose millions of dollars if the leases were blocked. The company plans to keep producing oil from the Gulf for decades, said Trent Webre, a Chevron manager in the region. .
In coming months the administration plans to auction more than 1,400 square kilometres of onshore oil and gas leases in Wyoming, New Mexico, Montana, Nevada and other states.
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Brown reported from Billings, Montana.
Another suspect is in custody in connection with the gold heist at Toronto Pearson International Airport last year, police say.
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