A federal appeals court panel has ruled in favor of energy industry groups, requiring the Biden administration to hold a large offshore oil and gas lease sale without environmental restrictions. The 5th Circuit Court of Appeals upheld a lower court decision that struck down the government’s modification of Lease Sale 261. The Department of the Interior’s Bureau of Ocean Energy Management (BOEM) must now move forward with the lease sale, which had been postponed due to last-minute environmental restrictions implemented by BOEM.
The ruling has been praised by the American Petroleum Institute (API) and other industry representatives. API’s Senior Vice President and General Counsel, Ryan Meyers, said that the decision restores acreage for offshore energy development and creates certainty for the energy workforce and the Gulf Coast economy. The ruling states that delaying Lease Sale 261 wouldn’t protect the endangered Rice’s whale, as the species is rarely found near the leases offered in the sale. Previous environmental reviews by BOEM concluded that additional protections for the species are unnecessary outside of their preferred habitat in the eastern Gulf.
The lawsuit against BOEM was filed by API, the State of Louisiana, and Chevron after BOEM reduced the available acres for oil and gas extraction as part of a settlement with environmental groups. The agency also imposed vessel restrictions for companies that obtain leases. Judge James Cain of the Western District of Louisiana initially granted a preliminary injunction to the plaintiffs, ordering the Biden administration to proceed with the lease sale without restrictions. After the government appealed, the appeals court allowed BOEM to delay the sale until November 8. However, the court ruling on Tuesday requires BOEM to hold the sale within 37 days.
The decision has been criticized by bipartisan lawmakers, including Senator Joe Manchin, who argue that the indefinite postponement of the sale undermines national security and energy production. Erik Milito, President of the National Ocean Industries Association, called the ruling a necessary response to an unwarranted decision by the Biden administration. Milito emphasized the critical role of the U.S. Gulf of Mexico in securing national security and urged support for domestic oil and gas production.
Overall, the appeals court’s ruling has ended the delay on the offshore oil lease sale, favoring the energy industry’s argument against environmental restrictions imposed by the government.