Federal Appeals Court Delays Oil Lease Sale in Gulf of Mexico

Caden Pearson
By Caden Pearson
October 26, 2023Judiciary
Federal Appeals Court Delays Oil Lease Sale in Gulf of Mexico
The Development Driller III off the coast of Louisiana in the Gulf of Mexico on May 11, 2010. (Gerald Herbert-pool/Getty Images)

A federal appeals court on Thursday delayed the sale of oil and gas leases in the Gulf of Mexico that was scheduled for Nov. 8, pending arguments set for Nov. 13 that focus on endangered whale species protections.

The 5th Circuit Court of Appeals issued its stay of a September ruling that struck down the Biden administration rule that placed significant restrictions on an offshore oil and gas lease sale, citing endangered whale species.

The pending sale, announced in March, was originally scheduled for Sept. 27 and then extended until Nov. 8 upon further legal challenges.

On Thursday, however, the court issued an order that delayed the sale until some time after the case will be argued on Nov. 13.

In August, the federal government reduced the area available for leases from 73 million acres to 67 million acres. These changes stemmed from an agreement made between federal agencies and environmental groups that sued in 2020, alleging an inadequate provision of safeguards for whales.

Under the new rules, more than 6 million acres that were originally intended to be part of an oil and gas lease auction were removed from the agreement on Lease Sale 261.

The rules, from the Bureau of Ocean Energy Management (BOEM), also limited vessel speeds and included new requirements for personnel on industry vessels in some of the areas to be leased.

The state of Louisiana, the American Petroleum Institute group, Chevron, and Shell filed the lawsuit to reverse the cut in acreage and block the inclusion of whale-protecting measures in the lease sale provisions.

They claimed the administration’s actions violated provisions of the Inflation Reduction Act, a climate measure that provided broad incentives for clean energy along with creating new drilling opportunities in the Gulf.

After the oil and gas companies, along with Louisiana, sued the Biden administration, a federal judge last month ordered the expansion of the planned offshore oil and gas auction to encompass the 6 million acres that had been excised from the lease.

The administration appealed to the 5th U.S. Circuit Court of Appeals in New Orleans.

On Sept. 25, the appeals court allowed the Interior Department to delay the sale to incorporate the additional acreage and other revised sale terms.

Inflation Reduction Act

President Joe Biden temporarily halted federal drilling auctions shortly after assuming office in January 2021 as part of his commitment to addressing climate change.

Nevertheless, the Inflation Reduction Act mandates that the government conduct the planned lease sale in the Gulf of Mexico in late September 2023.

The Biden administration acted too slowly to implement the Inflation Reduction Act’s required lease sales, according to Sen. John Barrasso (R-Wyo.) and Sen. Joe Manchin (D-W.Va.), who was a key player in passing the Inflation Reduction Act.

Mr. Manchin said the federal government “capitulated” in the settlement with environmentalists. Mr. Barrasso said the administration “is working to choke off all future offshore lease sales.”

In late September, the Biden administration announced that it would sell only three offshore oil and gas leases over the next five years.

The Department of the Interior (DOI) said in a Sept. 29 statement that, from 2024 to 2029, it will engage in “a maximum of three potential oil and gas lease sales” in the Gulf of Mexico region, scheduled for 2025, 2027, and 2029.

No oil and gas lease sales will take place in the Atlantic, Pacific, or Alaskan waters during this period, according to the statement. The three sales represent “the fewest oil and gas lease sales in history,” the department claims.

The Associated Press contributed to this report.

From The Epoch Times

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