A U.S. district court on Thursday vacated the results from last November’s oil and natural gas auction in the Gulf of Mexico (GOM), citing an outdated emissions analysis by the Trump administration.
In the ruling, considered a major victory for environmental groups, U.S. District Judge Rudolph Contreras of the District of Columbia invalidated Lease Sale 257, which was the first federal auction in a year (No. 1:21-cv-02317-RC). The Department of the Interior’s Bureau of Ocean Energy Management, which oversees the sales, “acted arbitrarily in excluding foreign consumption from its emissions analysis,” which was completed by the Trump administration, the judge ruled.
Push Me, Pull You
Ironically, the Biden administration had attempted to cancel the auction. After taking office in early 2021, President Biden ordered a review of the federal leasing program. Interior then suspended lease sales in the GOM, Alaska’s Arctic National Wildlife Refuge and in the Lower 48. In turn, 13 GOP-led states last March sued to force leasing activity to resume. U.S. District Judge Terry Doughty in Lafayette, LA, sided with the states, and in August, Interior agreed to resume the auctions.
Last November’s auction netted nearly $192 million in high bids for 308 tracts across 15,000-plus unleased blocks on 1.7 million-acre acres. Thirty-three exploration and production (E&P) companies participated, with bids overall totaling $198.5 million-plus.
The leases have not yet been awarded, Contreras noted.
Earthjustice challenged the sale on behalf of four other environmental groups. The plaintiffs argued that Interior used an outdated federal environmental analysis that did not accurately review the impact of greenhouse gas emissions from developing the oil and gas tracts.
Contreras agreed. The Biden administration excluded updated data for foreign oil and gas consumption in its analysis. In addition, the latest scientific information was not used to determine the role of oil and gas development on climate change, the judge wrote.
Could Decision Impact Onshore Lease Sales?
Interior, which has been analyzing the leasing program for months, said it is reviewing the court’s decision. The ruling may affect plans to offer more than 300,000 onshore acres to E&Ps by the end of March. The onshore auctions were restarted following the Louisiana court decision.
“We have documented serious deficiencies in the federal oil and gas program,” an Interior spokesperson said. “Especially in the face of the climate crisis, we need to take the time to make significant and long overdue programmatic reforms.”
The American Petroleum Institute (API) said it was “reviewing the decision and considering our options.” The National Ocean Industries Association (NOIA) blasted the ruling.
“It will be incumbent on the administration to defend responsible U.S. offshore production and to take the necessary steps to ensure continued leasing and energy production from the U.S. Gulf of Mexico, for the benefit of all Americans,” NOIA President Eric Milito wrote. “Uncertainty around the future of the U.S. federal offshore leasing program may only strengthen the geopolitical influence of higher emitting – and adversarial — nations, such as Russia.”
Meanwhile, the environmental groups were enthused.
“We simply cannot continue to make investments in the fossil fuel industry to the peril of our communities and increasingly warming planet,” Earthjustice’s Brettny Hardy, senior attorney, said.
The decision “is a victorious outcome not only for the Gulf’s communities, wildlife and ecosystem, but also for the warming planet,” Friends of the Earth’s Hallie Templeton, legal director, said. “But the fight is not over. We will continue to hold the Biden administration accountable for making unlawful decisions that contradict its pledge to take swift, urgent action on ‘code red’ climate and environmental justice priorities.”
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