- Federal courts insist that the Biden Administration adhere to the law and conduct a lease sale without restrictions.
- A Federal District court judge and the Fifth Circuit Court of Appeals decided the terms of settlement with activists were not supported by science or proper procedures.
- Federal Judge James Cain said the settlement’s justification for reductions was an attempt to “provide scientific justification to a political reassessment of offshore drilling.”
- No president since World War II has leased fewer federal acres for oil and gas than Biden.
The U.S. Court of Appeals for the Fifth Circuit affirmed a lower court’s order for the Interior Department to reinstate the original scope of an upcoming Gulf of Mexico oil and natural gas lease sale and extended the deadline for the auction from the end of this month to November 8. Environmental groups wanted the appeals court to reinstate auction limits to protect Rice’s whales that the Biden administration agreed to settle a lawsuit with the groups. The three-judge panel left in place a lower court order forcing the Interior Department to include 6.4 million acres it previously had pulled off the auction block and scrap planned vessel traffic limitations in an area that may provide habitat for the species. Louisiana and representatives of the oil industry had challenged the limitations, with Chevron saying the limitations could raise the costs and time to complete projects in the region. The court cases have helped the Biden administration to again delay oil and gas lease sales. Biden first paused federal drilling auctions shortly after taking office in 2021 and last August he tried to halt energy leases in 13 states.
Oil and gas companies had been preparing to submit sealed bids for the auction originally set to take place September 27. The sale was mandated by the Inflation Reduction Act, which reinstated multiple lease sales, after the Biden administration axed them in May 2022. This lease sale is the last clear opportunity for oil companies to buy new leases in the Gulf as the Interior Department has yet to issue its final plan for selling offshore oil and gas leases over the next five years—a legal requirement before auctions can be held. A potential federal government shutdown could stall planning for even a November 8 auction as Congress is still working on a spending plan to keep the government open past the new fiscal year beginning October 1.
The Interior Department finalized plans for a reduced lease sale in the Gulf in August, after last year’s Inflation Reduction Act mandated the auction move forward. The sale made about 67 million acres in the Gulf available for bids. But, it stripped acreage from the sale that included potentially oil-rich tracts located in the middle of the lease area. The Biden administration struck an agreement to reduce acreage with environmental groups led by the Sierra Club that sued in October 2020 alleging the government did not provide adequate safeguards for the whales, given estimates there are 51 Rice’s whales remaining. The environmental groups claimed the whales can be harmed or killed by oil spills, vessel strikes, noise, marine debris and other impacts of oil and gas exploration and development.
The Biden administration’s actions with the Rice’s whales is in sharp contrast to its continued approval of offshore wind leases along the Eastern coasts despite dead Right whales appearing on the shore. Endangered North Atlantic right whales are vulnerable to ocean noise pollution, vessel strikes, shifts in prey locations, and habitat degradation that are affected by offshore wind development. According to the National Oceanic and Atmospheric Administration, the population of North Atlantic right whales has declined to fewer than 350.
In addition to removing acreage from the sale, the Interior Department’s Bureau of Ocean Energy Management (BOEM) imposed restrictions on oil and gas vessel traffic associated with the leases set to be auctioned during the lease sale. Among the requirements, BOEM said specially-trained visual observers must be aboard all vessels traversing the area, all ships regardless of size must travel no quicker than 10 knots and vessels should only travel through the area in the daytime.
Offshore lease sales often span large swaths of federal waters, but earn bids on a fraction of blocks projected by companies to contain more resources and to have a higher return on investment. For example, BOEM auctioned off 73.3 million acres during Lease Sale 259 in March, but received bids worth $263.8 million for 313 tracts spanning 1.6 million acres.
The case was brought before Judge James Cain of the Western District of Louisiana. Cain said the Biden administration’s actions appeared to be an attempt to “provide scientific justification to a political reassessment of offshore drilling.” He also said 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.” The judge further pointed out that the administration earlier had dismissed similar concerns about the whales pointing to science that contradicted their decision to downsize the sales.
Biden’s vendetta against the oil and gas industry has been rampant. He stopped the Keystone XL Pipeline, and has barred drilling on millions of acres in Alaska. Overall, Biden used his first two years in office to slow federal oil and gas leases to the lowest level of any administration since World War II. Biden and his Democrat partners “has made it harder to produce oil and gas.” The results have been considerable, including massive job losses in the energy sector – as many as 59,000 forgone jobs from killing the Keystone XL Pipeline alone, according to the Department of Energy – and big spikes in energy prices across the board, including gasoline per-gallon prices rising from $2.39 to $5.00 a gallon during Biden’s term. President Biden has leased fewer federal acres for oil and gas leasing than any president since World War II.
Conclusion
The courts are forcing Biden to issue the September 27 lease sale in the Gulf of Mexico in its entirety by November 8. The Interior Department had removed millions of highly prospective acres and imposed excessive restrictions that stemmed from a voluntary agreement with activist groups that circumvented the law, ignored science, and bypassed public input. It has every appearance of being a “sue and settle legal strategy,” in which a friendly party sues the government with both parties understanding the government will settle with terms both support.
The altered lease sale was a continuation of Biden’s plans to destroy the domestic oil and gas industry as he had campaigned and as he has been trying to achieve since his first day in office. The courts have overturned a number of his decisions, but he has succeeded in delaying progress in energy development that Americans need. The court decisions, however, provide greater certainty for American energy workers, a more robust Gulf Coast economy and a stronger future for U.S. energy security.
