Overview
Donald Trump’s second-term energy agenda just jumped from talking point to steel and concrete. On December 10, his administration auctioned drilling rights across 81.2 million acres in the Gulf of Mexico—rebranded in official documents as the Gulf of America—the first offshore oil and gas sale since 2023 and the opening bid in a 30-auction marathon written into his July tax-and-spending law.
This isn’t a one-off sale; it’s a structural reset of U.S. offshore policy. Trump’s law slashes royalty rates from the 16.66% minimum set by Joe Biden’s Inflation Reduction Act down to 12.5%, locks in regular Gulf auctions through 2040, and sidelines offshore wind—setting up a long, bruising fight between drillers, green groups, coastal states and whoever occupies the White House next.
Key Indicators
People Involved
Organizations Involved
BOEM decides where, when and on what terms companies can drill or build offshore.
Earthjustice uses litigation to enforce environmental laws and challenge fossil-fuel projects.
API is Big Oil’s main lobbying arm in Washington.
Timeline
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First Trump-era Gulf auction held under lower royalty rates
EventBOEM offers 81.2 million acres in the Gulf of Mexico at a 12.5% royalty rate. Thirty companies submit 219 bids on just 1.02 million acres, generating $279.4 million in high bids—less money and fewer bids than the last Biden-era sale, but marking a decisive policy break toward expanded offshore drilling.
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Florida delegation urges Trump to keep drilling away from state
PoliticalFlorida’s entire congressional delegation—Republicans and Democrats—asks Trump to exempt the state’s western coast from expanded leasing, citing risks to tourism and military operations in the Gulf Test Range, underscoring regional Republican unease with offshore drilling.
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Green groups sue to block first Trump Gulf auction
LegalEnvironmental organizations represented by Earthjustice file suit to halt the planned Gulf sale, alleging Interior skipped required environmental review and that BOEM’s acting director violated ethics rules by participating despite past industry ties.
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Trump finalizes December Gulf sale, proposes Alaska auction
PolicyInterior finalizes a massive December 10 Gulf sale—first of 30 mandated auctions—and proposes opening about 1 million acres in Alaska’s Cook Inlet, all at a minimum 12.5% royalty rate.
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Interior publishes offshore leasing calendar under Trump law
PolicyThe Interior Department releases a long-term schedule dominated by Gulf of America and Cook Inlet oil and gas sales, touting predictability for drillers while environmentalists warn it locks in long-lived fossil infrastructure.
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Trump signs One Big Beautiful Bill Act
LegislationTrump signs the sweeping One Big Beautiful Bill Act, which extends his 2017 tax cuts, pares back Inflation Reduction Act clean-energy incentives, mandates 30 Gulf lease sales and lowers offshore royalties to 12.5%, hardwiring his energy agenda into law.
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House Republicans move to mandate Gulf lease sales, cut royalties
LegislationA House committee unveils a fossil-fuel-heavy budget plan requiring 30 Gulf of Mexico lease sales over 15 years, multiple Alaska auctions, and a 12.5% royalty rate on federal oil and gas, laying the policy groundwork for Trump’s tax-and-spending package.
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Last Biden-era Gulf sale raises $382 million
Energy MarketA Gulf of Mexico lease auction under Biden attracts 352 bids on 1.73 million acres, raising $382 million—the strongest offshore sale since 2015 and the last one before a pause in new auctions.
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Biden signs Inflation Reduction Act, raising offshore royalties
LegislationThe Inflation Reduction Act elevates minimum offshore oil and gas royalty rates to 16.66% and plans a historically small number of new federal lease sales, embedding climate goals into leasing policy and frustrating producers.
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Deepwater Horizon disaster reshapes offshore safety rules
Historical BackgroundBP’s Macondo well blowout kills 11 workers and spills millions of barrels of oil into the Gulf, triggering a federal drilling moratorium and a wholesale overhaul of offshore safety regulation. Those memories still shape today’s legal and political battles over new Gulf lease sales.
Scenarios
Trump’s 30 Gulf Lease Sales Roll Ahead, Courts Mostly Stand Aside
Discussed by: Reuters, AP, industry analysts at WorkBoat and the Financial Times
In this path, federal courts decline to issue broad injunctions, perhaps requiring only extra paperwork before subsequent auctions. BOEM adjusts environmental reviews but keeps the 12.5% royalty and sale cadence intact. Industry keeps bidding selectively—high-grading the best deepwater prospects while skipping marginal blocks—so revenue per sale stays middling but cumulative acreage under lease grows steadily. Offshore wind remains bogged down by separate Trump-era reviews, entrenching the Gulf’s role as a long-lived fossil basin even if demand growth is modest.
Courts Clip Trump’s Offshore Push, Forcing Tougher Climate Review
Discussed by: Environmental groups, legal scholars, coverage in the Financial Times and AP
Here, judges find that Interior shortchanged climate and wildlife analysis, especially for species like Rice’s whale and for cumulative emissions. They halt or severely narrow upcoming sales until BOEM completes a more robust programmatic review. The administration can still hold auctions, but on a slower, more litigated schedule, with more acreage carved out and stronger mitigation requirements. The 30-sale mandate stays on the books, but the real-world footprint shrinks, and the next administration inherits a partially crippled program rather than a turnkey drilling machine.
Political Whiplash: Next Administration Reinstates Climate Limits, Stranding New Leases
Discussed by: Climate-focused think tanks, some Democratic lawmakers, long-horizon energy strategists
If Democrats retake the White House or Congress before many Trump-era leases are drilled, they could move to restore higher royalty rates, narrow the leasing program, or even seek to amend or partially repeal the One Big Beautiful Bill Act. Companies that bought leases cheaply in 2025–2027 could find themselves facing slower permitting, tougher environmental conditions, or new carbon regulations that erode project economics. The result would echo past boom-bust cycles: a wave of paper leases on the books, but fewer actual platforms in the water and rising stranded-asset risk on company balance sheets.
Historical Context
Deepwater Horizon Oil Spill and the Post-2010 Safety Overhaul
2010–2016What Happened
In April 2010, BP’s Macondo well in the Gulf of Mexico blew out, causing one of the worst offshore oil spills in history. The disaster killed 11 workers, released millions of barrels of oil, and triggered a federal drilling moratorium plus a major reorganization of offshore regulators into BOEM and the Bureau of Safety and Environmental Enforcement.
Outcome
Short term: Washington tightened safety and environmental rules, and offshore drilling slowed while new standards took hold.
Long term: The spill remains a touchstone in every modern Gulf leasing fight, shaping risk calculations in courtrooms and boardrooms.
Why It's Relevant
Environmental groups now point to Deepwater Horizon to argue that locking in decades of new Gulf drilling repeats past mistakes in a warming world.
Trump’s First-Term ‘Energy Dominance’ Offshore Plan
2017–2020What Happened
During his first term, Trump proposed opening almost the entire U.S. outer continental shelf to oil and gas leasing, including the Atlantic, Pacific and Arctic coasts, while rolling back Obama-era protections. The plan ran into fierce opposition from coastal states, court challenges and lukewarm industry interest in frontier basins.
Outcome
Short term: Most of the most aggressive expansion never materialized, and key Arctic and Atlantic leases were ultimately shelved or blocked.
Long term: The experience showed that legal, political and economic friction can blunt even sweeping executive ambitions on offshore drilling.
Why It's Relevant
Today’s 30-sale Gulf mandate is a more targeted, statute-backed sequel to that earlier push—harder to undo, but still vulnerable to the same forces.
Biden’s Inflation Reduction Act Offshore Rebalance
2022–2023What Happened
The Inflation Reduction Act tied offshore wind auctions to continued oil and gas leasing, but raised royalties and narrowed the number of new sales. It aimed to steer offshore policy toward renewables while still accommodating some oil and gas activity, especially in the Gulf.
Outcome
Short term: Producers grumbled about higher costs but continued bidding in core Gulf areas; offshore wind leasing accelerated.
Long term: Trump’s 2025 law is explicitly designed to reverse these changes, illustrating how fragile climate-leaning compromises can be after a change in power.
Why It's Relevant
Comparing the IRA framework with Trump’s OB3 regime helps explain how much leverage Congress has over the long-term shape of U.S. offshore energy.