How Offshore Oil Drilling Rights Are Decided in the United States

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Decisions about offshore oil and gas drilling—whether to sell new leases, hold sales, or ban development—are not made by a single person or agency. They are the result of a complex and often conflicting set of legal processes, executive powers, and legislative mandates.

Recent years have seen this process produce starkly different outcomes from administration to administration. A policy to ban leasing in vast ocean areas can be followed by a policy to mandate new lease sales. This is a high-stakes struggle between different, legally defined powers in the U.S. government.

In This Article

• The federal government holds jurisdiction over the Outer Continental Shelf Lands Act (OCSLA) lands beyond state waters (generally 3 nautical miles offshore) and uses that authority to lease offshore tracts for oil and gas development.
• The process involves planning (by Bureau of Ocean Energy Management and the U.S. Department of the Interior), offering tracts via lease sales (auctions or competitive bidding), then exploration, development, production, and eventually decommissioning.
• States have an indirect but meaningful role: while they do not control the offshore rights beyond their waters, state laws and on‑shore infrastructure can effectively block or pressurise offshore leasing. For example, a coastal state can deny permits for pipelines or facilities, making a federal lease economically unviable (“on‑shore veto”).
• The article notes alternate legal tools beyond OCSLA for restricting offshore leases—for instance, the Antiquities Act has been used to withdraw areas from leasing by designating marine national monuments.
• It highlights that even when the federal government offers a lease, the issuance of the lease does not guarantee development — many steps (environmental review, permits, market viability) remain, and states’ involvement or opposition can delay or derail projects.

So What

• Balance of power and oversight: The article highlights how offshore drilling rights are not just a matter of federal policy but require cooperation (and sometimes conflict) between federal agencies, states, and industry. That means decision‑making is complex and multi‑faceted — not simply “federal says yes or no”.
• State leverage matters: The idea of an “on‑shore veto” emphasises that even powerful federal leasing programs can be undermined by state regulation of on‑shore infrastructure and land use. This is important for stakeholders (community groups, states, industry) to understand when assessing the viability of offshore projects.
• Policy flexibility and risk: By pointing out alternate tools (like the Antiquities Act) and the many layers of permitting, the article underlines that offshore leasing is subject to policy shifts, litigation, and changing regulatory regimes. That means uncertainty for companies investing and for regions banking on offshore development.
• Public interest and transparency: The leasing process raises questions about how the public interest is served — for example, how much royalty revenue the public gets, how environmental risk is managed, how states and localities influence outcomes. The article provides a basis for deeper scrutiny of those dimensions.
• Implications for energy and environment: Understanding how rights are awarded is key for both energy‑security policy (will more production come?) and for environmental/climate policy (which areas are off‑limits, how are risks managed?). The article helps frame those discussions.

The Foundation: OCSLA and the Agencies

At the center of all offshore drilling decisions is a single foundational law and a handful of federal agencies that interpret its mission.

The Outer Continental Shelf Lands Act

The primary U.S. federal law governing all mineral exploration and development in federal waters is the Outer Continental Shelf Lands Act (OCSLA), first passed in 1953.

This law established federal jurisdiction over the Outer Continental Shelf (OCS), the vast area of submerged lands that lies seaward of state coastal waters. This generally starts 3 nautical miles from shore, with exceptions for Texas and the Gulf coast of Florida.

The OCSLA grants the Secretary of the Interior the primary authority to manage this program. This authority includes the power to grant leases to the “highest qualified responsible bidder” through “sealed competitive bids” and to create all necessary regulations to carry out the law.

OCSLA is not a simple “pro-drilling” law. It is a resource management law. The Act explicitly mandates that the Interior Secretary must create a program that balances the goals of resource development, environmental protection, and revenue sharing.

The law requires the program to “best meet national energy needs” while also minimizing environmental harm and considering the “adverse impact on the coastal zone.”

This statutory balancing act is the legal engine for the entire political conflict. The wildly different offshore policies between presidential administrations are often not a question of one side following the law and the other breaking it. Instead, each administration uses the discretion OCSLA provides to weigh that balance differently.

An administration focused on climate change and renewable energy will prioritize the “environmental protection” mandate to create a plan with minimal sales. An administration focused on “energy dominance” will prioritize the “national energy needs” mandate to create a plan with maximum sales. Both can claim their actions are consistent with the OCSLA’s ambiguous mandate.

The Three Key Agencies

The Secretary of the Interior delegates the day-to-day management of OCSLA to three key agencies within the Department of the Interior.

Following the 2010 Deepwater Horizon disaster, the old Minerals Management Service (MMS) was dissolved amid criticisms that it had a fundamental conflict of interest: it was responsible for both promoting lease sales (generating revenue) and enforcing safety on the resulting rigs.

The 2011 reorganization split these conflicting duties into two new bureaus:

Bureau of Ocean Energy Management (BOEM): This is the “planner” and “landlord” agency. BOEM is responsible for managing offshore resources in an “environmentally and economically responsible way”. Its job is to plan the Five-Year Program, conduct the pre-lease environmental reviews, and run the lease auctions.

Bureau of Safety and Environmental Enforcement (BSEE): This is the “safety and enforcement cop.” BSEE is responsible for “advancing safety, environmental protection and conserving natural resources”. Its job is to enforce safety and environmental regulations, conduct onsite inspections, approve permits for operations (like drilling a specific well), and investigate accidents.

Office of Natural Resources Revenue (ONRR): This is the “accountant.” It “manages monetary transactions,” collecting the royalties and other revenues from the leases that BOEM sells.

This separation is critical. A company may win a lease from BOEM, but it cannot drill a single hole until it also gets operational permits from BSEE, which is legally firewalled from the leasing decision.

The Five-Year Program Process

The primary method for deciding where and when to offer offshore leasing rights is governed by Section 18 of OCSLA.

What Is the National OCS Program?

Section 18 mandates that the Secretary of the Interior prepare and maintain a National OCS Oil and Gas Leasing Program, universally known as the “Five-Year Plan.” This plan is a “schedule of lease sales indicating the size, timing, and location of proposed leasing activities.”

This is the main tool the Secretary uses to perform the balancing act between energy needs, environmental damage, and coastal impacts.

How the Plan Is Created

BOEM must follow a mandatory, multi-year, and very public process to create a new Five-Year Plan. This process is designed to “winnow” the 27 OCS planning areas down to a final schedule.

Request for Information (RFI): BOEM publishes a request in the Federal Register, initiating a public comment period (typically 45 days). This is a broad call for information on all OCS planning areas.

Draft Proposed Program (DPP): BOEM analyzes the RFI comments and issues a DPP, which includes a first draft of a lease sale schedule. This triggers another, longer public comment period (typically 60-90 days).

Proposed Program (PP) and Draft Programmatic EIS: BOEM analyzes the DPP comments and publishes a more refined PP, along with a full, program-wide environmental impact statement (EIS) as required by the National Environmental Policy Act (NEPA). This triggers another major public comment period (typically 90 days).

Proposed Final Program (PFP) and Final Programmatic EIS: After analyzing what can be millions of comments, BOEM publishes the PFP and the Final EIS.

60-Day Waiting Period: The PFP is transmitted to the President and Congress for a 60-day review. Congress does not have an approval role, but this period gives them time to introduce legislation to block or change the plan.

Approval / Record of Decision (ROD): After the 60-day period, the Secretary of the Interior issues a final approval and a Record of Decision, making the new Five-Year Program official.

Two Plans, Two Visions

This process is a high-stakes political battleground.

The Biden 2024-2029 Plan: This plan, finalized in December 2023, was the result of a winnowing process that began in 2018. The initial Trump administration DPP proposed 47 lease sales.

After the change in administration and years of analysis, the final Biden plan scheduled only three potential sales, all in the Gulf of Mexico. This was the smallest Five-Year Plan in U.S. history.

The administration’s rationale was that this was the “minimum number” of sales required to comply with the 2022 Inflation Reduction Act (IRA), which controversially linked the ability to issue offshore wind leases to the requirement of holding offshore oil and gas lease sales.

The Trump 2025 (11th) Plan: The new Trump administration viewed the 3-sale plan as a failure. On April 18, 2025, Interior Secretary Doug Burgum announced that BOEM was starting the entire multi-year process over again, initiating the RFI for a new “11th National OCS Program.”

The stated goal was to “secure American Energy Dominance” and “unlock the full potential” of offshore resources. This new RFI seeks information on all 27 planning areas, with draft proposals floating new lease sales off the coast of California, in the High Arctic, and in the Eastern Gulf of Mexico.

The process itself—mandated by law to be long, complex, and full of public input—is a powerful political tool. An administration skeptical of drilling can use the lengthy, multi-year process as a de facto moratorium. By taking years to finalize a minimal plan, it effectively slows leasing to a crawl, all while technically following the law. This led to industry complaints of the “longest gap in offshore sales since 1966.”

Conversely, a pro-development administration can use the start of a new plan as a powerful signal to the market, telegraphing its “Energy Dominance” policy even though the first sales are still years away.

From Plan to Lease Sale

Just because a potential sale is included in the final Five-Year Plan does not make it automatic. Each individual sale must go through its own separate, multi-year public process before any auction can occur.

The Individual Sale Process

The process for a single sale looks like a miniature version of the Five-Year Plan process:

Call for Information: BOEM issues a “Call” for the industry to nominate, or express interest in, specific blocks within the larger sale area.

Area Definition & EIS Scoping: BOEM defines the specific sale area and begins the NEPA process, publishing a Notice of Intent to prepare an Environmental Impact Statement (EIS).

Draft EIS & Proposed Notice of Sale: BOEM publishes a Draft EIS for public comment (a 45+ day period). It also issues a Proposed Notice of Sale, which outlines the specific terms, conditions, and stipulations. This notice is sent to the governors of affected states for a 60-day comment period.

Final EIS & Final Notice of Sale: After analyzing all comments, BOEM publishes a Final EIS and, at least 30 days before the auction, a Final Notice of Sale (FNS). This FNS is the final “go” for the sale.

The Sealed-Bid Auction: The auction is held. Companies submit sealed competitive bids. The bids are opened publicly, and the lease is awarded to the highest qualified bidder, provided the bid meets BOEM’s “fair market value” criteria.

The NEPA Battleground

The most critical hurdle in this process is the National Environmental Policy Act (NEPA). NEPA requires BOEM to prepare an EIS (both for the 5-Year Plan and for each individual sale) that thoroughly analyzes and discloses the environmental impacts of its actions.

This EIS is the primary legal battleground. Opponents of a sale will sue the federal government, arguing that the EIS is “inadequate” or “flawed.” For any major federal leasing decision, litigation is not a possibility—it is inevitable.

A perfect example is Gulf of Mexico Lease Sale 261. This sale was one of the few mandated by the 2022 Inflation Reduction Act.

Environmental and Gulf community groups sued BOEM to stop it. They argued the sale’s EIS was illegal under NEPA because it “did not consider the health threats to Gulf Coast communities” living near refineries and “failed to adequately consider the climate impacts” of producing over a billion barrels of oil. A central flaw was also the failure to properly account for the impacts on the endangered Gulf of Mexico (Rice’s) whale.

The sale was first delayed. Then, in a major 2025 ruling, a federal court found the sale illegal, agreeing that the Interior Department “failed to properly evaluate the harm from [the] billion-barrel oil lease sale.”

The real-world process is not: Plan → Sale → Drilling. It is: Plan → Lawsuit → Sale → Lawsuit → Final Judicial Decision → (Maybe) Drilling. The courts become the final arbiters of how the balancing act is performed.

The Presidential Power to Ban

Separate from the planning process, Section 12(a) of OCSLA gives the President a powerful unilateral authority. This section states the President “may, from time to time, withdraw from disposition any of the unleased lands of the OCS.”

This is a unilateral power. It does not require a multi-year plan, public comment, or Congressional approval. It is a direct executive action that has been used by multiple presidents, including George W. Bush, Barack Obama, and Donald Trump.

Biden’s Historic Withdrawal

On January 6, 2025, just days before his term ended, President Joe Biden used this power to issue the largest withdrawal in U.S. history.

He issued memoranda withdrawing over 625 million acres, protecting the entire U.S. Atlantic coast, the entire U.S. Pacific coast, and the Eastern Gulf of Mexico from all future oil and gas leasing.

The withdrawals were issued “for a time period without specific expiration” to protect coastal economies, marine ecosystems and to fight climate change.

The Revocation Controversy

This action triggered the central, unresolved legal drama of offshore policy. The text of Section 12(a) gives the President the power to “withdraw,” but it does not give the power to revoke or undo a withdrawal.

Argument Against Revocation: The law is silent on revocation. Legal precedent suggests that where Congress knows how to grant revocation power (as it has in other land laws) and chooses not to, its silence is controlling. This means a 12(a) withdrawal is permanent unless undone by Congress.

Argument For Revocation: The phrase “from time to time” suggests withdrawals can be temporary. More broadly, proponents argue the executive branch’s “power to reconsider is inherent in the power to decide”.

This legal ambiguity exploded into a full-blown crisis in 2025.

On his first day in office (January 20, 2025), President Donald Trump issued Executive Order 14148, revoking President Biden’s January 6, 2025 memoranda.

On February 3, 2025, his new Interior Secretary, Doug Burgum, signed an order directing immediate compliance.

Environmental groups immediately filed the first environmental lawsuit of the new administration, challenging the revocation as “an illegal order to undo ocean protections”.

As of November 2025, that case is pending in federal court.

Two Tools, Two Speeds

Administrations have two tools in the OCSLA toolbox: Section 18 is a scalpel—a slow, precise, bureaucratic tool used to plan leasing. Section 12(a) is a hammer—a fast, powerful, unilateral tool used to ban leasing.

The 2025 whiplash is a story of one administration using the hammer to ban everything, and the next administration trying to legally break the hammer’s ban while starting the long process of building a new scalpel.

Congressional Authority

There is one power that trumps both the agency and the president: Congress. Congress can pass a new law that overrides both the Section 18 plan and a Section 12(a) withdrawal.

This is the ultimate “gas pedal.”

The “One Big Beautiful Bill Act”

The most significant example is the 2025 “One Big Beautiful Bill Act” (OBBBA). Passed in July 2025 as part of a budget reconciliation package, this law mandates specific lease sales, completely bypassing the Five-Year Plan process.

The OBBBA is not a plan—it is a command. It requires the Interior Department to hold 30 lease sales in the Gulf of America and six lease sales in Alaska’s Cook Inlet on a predictable, congressionally mandated leasing schedule.

The American Petroleum Institute (API) praised OBBBA as “the most important energy bill in a generation” precisely because it “unlocks opportunities” and provides the market certainty that the bureaucratic (Five-Year Plan) and legal (lawsuits) processes had removed.

This reveals the true hierarchy of power: Congress > President > Agency. The default decision-maker is the Agency (Interior/BOEM) via the Section 18 plan. A President can override that plan with a Section 12(a) ban. But Congress can override both with a new law.

Other Battlegrounds

This three-way power struggle has created a complex battlefield, with new legal fights and tactics emerging.

The NEPA Controversy

The OBBBA’s congressional mandate immediately collided with the NEPA legal framework. In November 2025, the Trump Interior Department announced a controversial legal position: the National Environmental Policy Act (NEPA) “is not applicable” to the sales mandated by the OBBBA.

The administration’s argument is that NEPA review is only required when an agency has the discretion to change an outcome based on that review. Because OBBBA commands the sales and requires BOEM to use the “same lease forms, terms, conditions, and stipulations” as the last lease sale, the administration claims BOEM has no discretion to change the sale. Therefore, they argue, a NEPA review is a pointless and legally unnecessary exercise.

This move is part of a much larger 2025 Trump administration effort to overhaul and deregulate NEPA, which includes rescinding the central Council on Environmental Quality (CEQ) regulations and directing agencies to create their own, faster “alternative arrangements.”

Environmental groups “cried foul,” stating that OBBBA does not contain explicit language to “stop conducting environmental reviews.” This sets the stage for the next major wave of litigation.

How States Fight Back

Even if the federal government revokes a ban, starts a new plan, and wins its NEPA lawsuits, coastal states are not powerless. The November 2025 proposal to add six new lease sales off the coast of California provides a clear example.

The federal government controls the OCS (beyond 3 nautical miles). The state controls its own waters and, critically, its coastline.

When the 2025 proposal was reported, California Governor Gavin Newsom immediately declared the plan “dead on arrival”.

This is not just political bluster. A state like California, which has long opposed new drilling, wields a powerful de facto veto through its control of essential onshore infrastructure.

The federal government can sell a company a lease 10 miles offshore, giving it the right to drill. But that company must then get the oil to market. This requires building onshore pipelines, processing plants, and storage terminals.

All of that infrastructure must cross state waters or be built on state land, where it is subject to state-level laws like the Coastal Zone Management Act and stringent state and local air, water, and building permits.

By denying permits for this onshore infrastructure, a state can make the federal lease economically worthless. This “onshore veto” is the power behind Governor Newsom’s “dead on arrival” comment.

Alternative Tools for Bans

OCSLA is not the only law in the ocean. Administrations can use other tools to create de facto drilling bans that are often more durable.

The Antiquities Act (1906): This law allows a President to unilaterally create “National Monuments” from federal lands and waters to protect “historic or scientific” objects. Proclamations for marine national monuments are often written to prohibit all mineral extraction, thus creating a permanent drilling ban. This power is also controversial and carries the same legal debate over whether a subsequent president can revoke it.

The National Marine Sanctuaries Act (NMSA): This is a separate and powerful tool. Administered by the Secretary of Commerce (via NOAA), this act allows for the designation of “National Marine Sanctuaries”. This process can be initiated by Congress or through a community-led nomination. Crucially, sanctuary designations explicitly ban the extraction of minerals and fossil fuels. This makes the NMSA a more durable and explicitly conservation-focused tool for permanently banning drilling in specific, high-value ecosystems.

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