The Biden administration said it would resume oil and gas lease sales on federal lands and waters in order to comply with a court ruling. However, the U.S. Department of the Interior (DOI) said late Monday it is simultaneously appealing the Louisiana-based court’s decision, and if it wins on appeal, it could again suspend leasing as it studies the environmental impacts of drilling.

Shortly after taking office in January, President Biden ordered the DOI’s Bureau of Land Management to review the entire oil and gas leasing program to determine if it benefits energy production at the expense of the environment. Biden has promised to combat climate change and to put the United States on a path to a carbon-free power sector by 2035 and a carbon-neutral economy by 2050.

DOI officials, in turn, suspended lease sales in the Gulf of Mexico, the Arctic National Wildlife Refuge in Alaska and on federal lands in individual states. This followed lawsuits from conservation groups that argued drilling causes environmental problems for both people and wildlife. The suspensions did not affect existing leases.

Industry trade groups criticized the administration’s lease sale suspensions as a job killer, arguling they injected a heavy dose of uncertainty into the energy sector as demand for both oil and gas had begun to mount following a pandemic-induced downturn. 

Thirteen states joined together in March to file a lawsuit in a Louisiana federal court to force the resumption of lease activity. The states argued that DOI skipped comment periods and other required steps before implementing the lease freeze. They also maintained that federal law requires regular lease sales.

U.S. District Judge Terry Doughty in Lafayette, LA, sided with the states and ordered an injunction – essentially blocking the lease moratorium. After a review period, DOI said this week it would comply with the court order and resume lease sales. 

Still, officials vowed to challenge the decision in the U.S. Court of Appeals for the Fifth Circuit in New Orleans. DOI’s statement emphasized that a lease freeze is needed to fully assess the level of environmentally harmful emissions from federal oil and gas programs.

“Together, federal onshore and offshore oil and gas leasing programs are responsible for significant greenhouse gas emissions and growing climate and community impacts,” DOI stated. “Yet the current programs fail to adequately incorporate consideration of climate impacts into leasing decisions.”

Additionally, federal programs “inadequately account for environmental harms to lands, waters, and other resources, foster speculation by oil and gas companies, and frequently leave impacted communities out of important conversations about how they want the public lands and waters managed,” the Interior officials alleged.

DOI said while it will comply with the district court’s mandate as it appeals the decision, it also intends “to exercise the authority and discretion provided under the law to conduct leasing in a manner that takes into account the program’s many deficiencies. Separately, Interior continues to review the programs’ noted shortcomings” and intends to complete a report on its findings and propose reforms.

Oil and gas industry advocates cheered the district court’s decision and pressed the Biden administration to resume lease sales and avoid further pauses.

“We call on the administration to declare a truce with American producers and promise to back off plans to regulate us off federal lands and out of business,” said Western Energy Alliance’s Kathleen Sgamma, president. “It’s time to announce new lease sales” and “scuttle plans to move forward aggressively with myriad new regulations meant to reduce American production.”

To that end, the American Petroleum Institute (API) this week joined 11 other energy industry groups in a separate lawsuit filed in the U.S. District Court for the Western District of Louisiana. The trade groups argued 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.”

It said DOI did neither, effectively doubling down on the arguments made by the 13 states that filed suit in March. 

Environmental groups, however, applauded the DOI pushback and called for more action.

“Reforming our nation’s federal oil and gas leasing program must remain a top priority to ensure that our public lands thrive for generations to come,” the National Wildlife Federation’s Mary Greene, public lands attorney, said. “While the Biden administration responds to the court, we urge the Department of Interior to issue its reform initiatives so that the outdated leasing system is modernized for the benefit of our public lands, wildlife, and all Americans.”

She said administrative actions alone are not enough. “Congress must also swiftly take action to update our hundred-year-old leasing law so that our nation can transition to the clean energy economy that we all need and deserve,” Greene added.