A federal appeals court panel has ruled in favor of energy industry groups, ordering the Biden administration to hold a large offshore oil and gas lease sale without environmental restrictions. The 5th Circuit Court of Appeals has determined that the Department of the Interior’s Bureau of Ocean Energy Management (BOEM) must move forward with Lease Sale 261 in the Gulf of Mexico, which was originally scheduled for September but was delayed due to last-minute environmental restrictions imposed by BOEM.
The court’s decision has been applauded by the American Petroleum Institute (API), with API Senior Vice President and General Counsel Ryan Meyers highlighting the importance of energy independence and the role of the Gulf of Mexico in maintaining affordable and reliable American energy production. The ruling upholds a lower court decision that struck down the federal government’s modification of Lease Sale 261, which included environmental restrictions and the blocking off of millions of acres that were previously set to be leased.
One of the main points of contention in the case was the protection of the endangered species Rice’s whale. While the settlement with environmental groups expanded protections for the species, the appeals court ultimately concluded that delaying Lease Sale 261 would not effectively protect the whale, as it rarely inhabits the area where the leases are being offered. The court stated that “at least one whale would need to traverse the area in which oil-and-gas activities are occurring under Lease Sale 261 and be killed by such activities,” which was deemed unlikely based on previous environmental reviews.
The legal battle began after BOEM introduced restrictions to Lease Sale 261 in August, prompting legal action from API, the State of Louisiana, and Chevron. The agency’s restrictions reduced the available acreage for oil and gas extraction and implemented vessel restrictions for leaseholders. Judge James Cain of the Western District of Louisiana granted a preliminary injunction in favor of the plaintiffs and ordered the Biden administration to proceed with the lease sale without restrictions. However, the appeals court allowed BOEM to delay the sale until November 8. Last month, the appeals panel issued a stay on the preliminary injunction, leading to BOEM indefinitely postponing the sale.
Now, following the appeals court ruling, BOEM is required to hold the sale within 37 days. The decision has been met with mixed reactions, with Erik Milito, president of the National Ocean Industries Association, supporting the court’s ruling as a response to what he considers an unwarranted decision by the Biden administration. He argues that the removal of highly prospective acres and excessive restrictions resulted from a voluntary agreement with activist groups that bypassed legal processes, disregarded scientific considerations, and neglected public input. Milito also highlights the importance of the U.S. Gulf of Mexico for national security and urges the support of domestic oil and gas production.
In contrast, there are those who criticize the ruling and argue that it goes against federal policies, such as easing oil sanctions on Venezuela and Iran, which they believe could contribute to global unrest. They stress the importance of fully utilizing America’s energy production capabilities, especially offshore resources, to address pressing national challenges.