Judge blocks Biden administration’s new leasing moratorium

Offshore staff

NEW ORLEANS – A federal judge in Louisiana has granted a preliminary injunction against the Biden administration’s suspension of new oil and gas leases on federal land and waters.

According to a report from the Associated Press (AP), US District Judge Terry Doughty’s ruling came in a lawsuit filed in March by Louisiana Republican Attorney General Jeff Landry and officials in 12 other states. Doughty said his ruling applies nationwide. A preliminary injunction is technically a halt to the suspension pending further arguments on the merits of the case.

“The omission of any rational explanation in cancelling the lease sales, and in enacting the Pause, results in this Court ruling that Plaintiff States also have a substantial likelihood of success on the merits of this claim,” he wrote.

The moratorium was imposed after Biden signed executive orders on Jan. 27, 2021. The suit was filed in March. The Interior Department later canceled oil and gas lease sales from public lands through June — affecting Nevada, Colorado, Montana, New Mexico, Utah, Wyoming, and the bureau’s eastern region.

According to the AP report, the 13 states that sued said the administration bypassed comment periods and other bureaucratic steps required before such delays can be undertaken, and that the moratorium would cost the states money and jobs. Doughty heard arguments in the case last week in Lafayette.

Federal lawyers argued that the public notice and comment period does not apply to the suspension, that the lease sales are not required by law and that the Secretary of the Interior has broad discretion in leasing decisions, the AP reported.

“No existing lease has been cancelled as a result of any of the actions challenged here, and development activity from exploration through drilling and production has continued at similar levels as the preceding four years,” lawyers for the administration argued in briefs.

But Doughty sided with the plaintiff states attorneys, who argued that the delay of new leasing cost states revenue from rents and royalties, according to the AP report.

“Millions and possibly billions of dollars are at stake,” wrote Doughty, who was nominated to the federal bench by President Donald Trump in 2017.

“Local government funding, jobs for Plaintiff State workers, and funds for the restoration of Louisiana’s Coastline are at stake,” he added.

In response, industry associations called for the Biden administration to immediately resume lease sales.

National Ocean Industries Association (NOIA) President Erik Milito issued the following statement:

“As NOIA has consistently commented, the Department of the Interior is required by law to expeditiously develop America’s energy resources, and this includes the obligation to schedule and hold offshore oil and gas lease sales. Today’s [Tuesday] ruling simply confirms the legal requirements. Any pause of American energy opportunities will do untold harm towards American economic, energy, and environmental progress. As we emerge from the pandemic and move forward with economic growth, it is more important than ever that we seize the opportunity to produce oil and gas here in the US to help avert potential inflationary risks and proactively ensure affordable energy for all walks of life, especially low-income communities.

“The Gulf of Mexico provides no shortage of benefits to the American people. Offshore oil production has the lowest carbon intensity of the oil producing regions, supports more than 345,000 jobs, many of which are accessible, high-paying and cannot be easily substituted, and generates vital government revenues for conservation and recreation programs, including ones in economically distressed urban areas. The Obama administration review of the 2017-2022 Five Year Plan for offshore oil and gas leasing determined GHG emissions would be higher without these lease sales because energy production would be outsourced to foreign counties resulting in a higher carbon footprint. All of these benefits coalesce around many of the priorities of the Biden administration.

“The Biden administration should promptly fulfill its obligation to the American people and capitalize on an American environmental and emissions success story by immediately resuming Gulf of Mexico lease sales. We stand ready to work with this administration to continue to produce American energy while protecting the environment and striving to meet the goals of the Paris Accord on climate change.”

The American Petroleum Institute Vice President of Upstream Policy Kevin O’Scannlain issued the following statement:

“The federal leasing pause is harmful to our nation’s national security, environmental progress, and economic recovery. We are pleased to see the court ruling that natural gas and oil leasing must resume on federal lands and waters, and we urge the administration to move expeditiously to follow the court’s order and lift the federal leasing pause. Now is the time for the administration to put an end to this ‘import more oil’ policy that threatens American jobs and deprives state and local communities of much-needed revenue, all while likely increasing emissions and the risks of climate change.”

06/16/2021