A major legal setback befell the Biden administration late Thursday evening when a federal court invalidated its last-minute restrictions on an upcoming offshore oil and gas lease sale.
Judge James Cain of the Western District of Louisiana granted a preliminary injunction to plaintiffs, which included the State of Louisiana, American Petroleum Institute, Chevron and Shell. The ruling mandates that the federal government must proceed with Lease Sale 261, covering millions of acres across the Gulf of Mexico, under its original conditions by September 30.
“The court observes that plaintiffs have demonstrated substantial potential costs resulting from the challenged provisions,” Cain said.
The judge’s decision reflects the plaintiffs’ grievances, particularly concerning vessel restrictions, rather than focusing solely on the acreage withdrawal and sale dynamics.
“Industry plaintiffs have shown a likelihood that these will burden their operations on current and planned leases,” Cain said. “The resulting costs would not be undone by the court’s entry of a permanent injunction and order of another sale.”
Cain also criticized the Biden administration for weaponizing environmental concerns.
“The administration’s process looked more like a weaponization of the Endangered Species Act than the collaborative, reasoned approach prescribed by the applicable laws and regulations,” he said.
Ryan Meyers, API Senior Vice President and General Counsel, lauded the court’s decision.
“We are pleased that the court has hit the brakes on the Biden Administration’s ill-conceived effort to restrict American development of reliable, lower-carbon energy in the Gulf of Mexico,” Meyers said.
“Today’s decision will allow Lease Sale 261 to move forward as directed by Congress in the Inflation Reduction Act, removing the unjustified restrictions on vessel traffic imposed by the Department of the Interior and restoring the more than 6 million acres to the sale,” Meyers continued. “This decision is an important step toward greater certainty for American energy workers, a more robust Gulf Coast economy and a stronger future for U.S. energy security.”
Erik Milito, the president of the National Ocean Industries Association, also welcomed the court’s injunction.
“The injunction is a necessary and welcome response from the court to an unnecessary decision by the Biden administration,” Milito said. “The removal of millions of highly prospective acres and the imposition of excessive restrictions stemmed from a voluntary agreement with activist groups that circumvented the law, ignored science, and bypassed public input.”
The lawsuit against the Biden administration had been filed in late August by API and its fellow plaintiffs. They argued that sales like Lease Sale 261 are essential for long-term oil and gas production. The Bureau of Ocean Energy Management (BOEM) had initially planned to offer 13,620 blocks across 73.4 million acres but reduced it to 12,395 blocks across approximately 67 million acres following a settlement with environmental groups.
BOEM’s restrictions also included mandates for specially-trained visual observers on all vessels and speed limits for ships. These restrictions were part of the administration’s settlement with a coalition of environmental groups led by the Sierra Club. The settlement was a response to a lawsuit dating back to October 2020, where the environmental coalition accused the National Marine Fisheries Service of failing to assess the oil industry’s impact on endangered marine wildlife adequately.
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