Commodities January 26, 2026

Interior Seeks Nominations for Offshore Lease Areas Along California Coast

Administration invites industry input on potential Southern and Central California lease sale amid strong state opposition and unclear timing

By Hana Yamamoto
Interior Seeks Nominations for Offshore Lease Areas Along California Coast

On Jan. 26, the Interior Department opened a nomination window for oil and gas companies to propose areas for possible offshore lease sales off Southern and Central California. The move advances a federal effort to expand offshore drilling and has drawn sharp criticism from California officials and environmental groups. The timeline for actual lease sales remains uncertain based on mixed signals from the agency.

Key Points

  • Interior Department opened a 30-day nomination period for potential offshore lease areas in Southern and Central California.
  • The administration framed the action as an initial step to expand U.S. offshore drilling, with BOEM citing a possible sale timeline that includes both "as soon as next year" and tentatively 2027 for first lease sales.
  • The move has prompted opposition from California leadership and environmental groups citing risks to coastal economies and ecosystems; Pacific leases currently account for a very small share of federal oil output.

Jan 26 - The Interior Department on Monday asked oil and gas companies to nominate tracts for a potential offshore oil and gas lease sale covering Southern and Central California, opening a public nomination period as part of a broader push to expand offshore drilling.

The agency said industry participants and members of the public will have 30 days to submit comments and nominations to the Bureau of Ocean Energy Management (BOEM). The administration framed the request as an initial step toward renewed federal leasing activity along parts of the Pacific coast that have seen little new development in recent decades.

In a written statement, Matt Giacona, acting director of the Interior’s Bureau of Ocean Energy Management, said, "We’re taking the first step toward a stronger, more secure American energy future."

Officials signaled different markers for timing. The Biden administration’s more moderate leasing plans were cited as a point of contrast by critics, while BOEM has tentatively scheduled first lease sales in Southern and Central California for 2027. The initial invitation to nominate areas described the potential sale as one that could be held as soon as next year, leaving the near-term schedule unclear.

California state leaders and environmental organizations reacted swiftly and negatively. Governor Gavin Newsom and a range of environmental groups denounced the plan, arguing it endangers the state’s coastal economy and marine ecosystems. Kristen Monsell, oceans legal director at the Center for Biological Diversity, said, "Trump just took another disturbing step toward opening California’s coast to dangerous new offshore drilling," warning of threats to communities, wildlife and the coastline and calling the move "a reckless attempt to sell out our coastline to oil companies."

Context for the announcement notes that the United States has not auctioned Pacific drilling rights since 1984 and that California’s coastline has largely been shielded from new energy development since a major 1969 oil spill in Santa Barbara that inspired key environmental protections.

By federal data, waters under federal jurisdiction accounted for 14% of U.S. oil production in 2024, while leases in the Pacific made up just 0.1% of that federal output. Advocates of expanded leasing see it as aligning with an agenda to bolster domestic fossil fuel production; opponents emphasize potential local economic and environmental harms.


What happens next: The public and industry have a 30-day window to submit comments and nominations to BOEM. BOEM’s current timeline lists tentative first lease sales in Southern and Central California for 2027, though the nomination notice also referenced the possibility of a sale as soon as next year, creating an uncertain near-term schedule.

Risks

  • Political and legal resistance from California officials and environmental groups could lead to delays or challenges to leasing - impacting energy and legal sectors.
  • Potential threats to coastal economies and ecosystems if drilling proceeds, with implications for tourism, fisheries and local environmental stakeholders.
  • Uncertainty in the schedule for lease sales, with BOEM referencing both a potential near-term sale and a 2027 tentative date, creating planning and market uncertainty for energy companies and regional stakeholders.

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