Industry trade groups file lawsuit against leasing pause

Offshore staff

WASHINGTON, D.C. – The American Petroleum Institute (API) and 11 other energy industry trade groups have filed a lawsuit in the US District Court for the Western District of Louisiana challenging the US Department of the Interior’s indefinite pause on oil and natural gas leasing on federal lands and waters.

“With the indefinite pause on federal oil and gas leasing, the department failed to satisfy procedural requirements and ignored congressional mandates for holding lease sales,” API Senior Vice President and Chief Legal Officer Paul Afonso said. “The law is clear: the department must hold lease sales and provide a justification for significant policy changes. They have yet to meet these requirements in the eight months since instituting a federal leasing pause, which continues to create uncertainty for US natural gas and oil producers. As our industry takes action to preserve our legal rights, we will continue working with the Biden administration on policies that support a lower-carbon future while providing access to the affordable, reliable energy our economy needs to recover.”

API was joined by the following organizations as co-plaintiffs in the lawsuit:

• American Exploration & Production Council

• Independent Petroleum Association of America

• International Association of Drilling Contractors

• International Association of Geophysical Contractors

• National Ocean Industries Association

• Montana Petroleum Association

• North Dakota Petroleum Council

• Petroleum Alliance of Oklahoma

• Southeast Oil and Gas Association

• Utah Petroleum Association

• Western States Petroleum Association.

Federal leasing laws, including the Mineral Leasing Act (MLA) and the Outer Continental Shelf Lands Act (OCLSA), prohibit an indefinite pause on lease sales onshore and offshore. The department’s move to altogether stop holding leases sales is inconsistent with Congress’ intent and circumvents congressional mandates through administrative action, according to the API. Among other requirements, the MLA requires quarterly onshore lease sales, and the OCSLA directs the expeditious development of resources offshore. The indefinite leasing pause is inconsistent with both statutes.

Under the Administrative Procedure Act, an executive agency is required to provide a record of support and explanation for a change in policy. An agency must also provide an opportunity for public comment when it implements new rules. The DOI neglected to meet these requirements.

08/16/2021