Federal judge cites climate effect in voiding Gulf of Mexico oil and gas lease sale

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A federal judge has invalidated oil and gas drilling leases across a wide swath of the Gulf of Mexico, asking the Biden administration to weigh climate impacts before allowing development.

Thursday night’s ruling gave a victory to environmental groups who had challenged the Home Office’s decision to comply with a separate court order and reinstate the oil and gas development lease.

U.S. District Judge Rudolph Contreras of District of Columbia ruling overturned lease sale a reluctant Biden administration organized in November. This sale came after a Louisiana federal judge sided with the state and Republican attorneys general from 12 other states and ordered lease sales to go ahead.

But the lease sales were based on a sloppy environmental analysis, Contreras ruled. The Bureau of Ocean Energy Management, an Interior agency that conducts lease sales for offshore energy development, failed to consider the effect of the leases on foreign oil consumption, the judge wrote.

Biden’s climate goal

The decision fits in with President Joe Biden’s previously thwarted goal of limiting national fossil fuel leases in the name of climate action.

Shortly after taking office in 2021, Biden issued an executive order suspending new oil and gas leases for federal lands and waters as the Interior considered how the lease program could be reshaped to accommodate the government climate goals.

In June, U.S. District Judge Terry Doughty of Louisiana ruled the break violated federal law that required quarterly lease sales. The administration then advanced with lease sales under a five-year plan put in place by the Bureau of Ocean Energy Management during the administration of President Donald Trump.

November’s lease sale was the only one held in 2021. Of 80 million acres offered for leases, 1.7 million acres received bids, making it the largest lease sale in history the United States.

Environmental groups Friends of the Earth, Healthy Gulf, Sierra Club and Center for Biological Diversity have challenged the sale. Contreras ruled in their favor on Thursday.

The Home Office, the nominal defendants in the suit, didn’t seem too dismayed by the decision.

In a statement, Interior spokeswoman Melissa Schwartz said the June decision required the department to arrange the sale of the lease, despite administration reservations about the federal oil and gas leasing program. gas.

“We have documented serious flaws in the federal oil and gas program,” she wrote. “Especially in the face of the climate crisis, we need to take the time to make important and long overdue programmatic reforms. Our work will be guided by law, science and sound policy. That’s why the President called for a pause on leasing in his executive order, and why we’re appealing the decision to implement the pause. »

Erroneous analysis of the Trump era

The 2017 BOEM analysis found that greenhouse gas emissions would increase slightly if no lease sales took place, as demand for oil would be met by foreign sources which created more emissions than drilling in the Gulf.

The BOEM model also projected a drop of billions of barrels in overseas oil consumption if leases were not issued – but the agency did not take this decrease into account in its analysis of the environmental costs of the project. issuance of leases.

“The problem is that considering foreign consumption probably changes the bottom line,” Contreras wrote.

The order appears to conflict with one issued by Doughty last year. Doughty ordered the administration to lift its pause on issuing oil and gas leases, saying the law governing lease sales does not give the executive the power to stop holding them.

Legal experts said on Friday that the most recent decision dealt with a different legal issue – the validity of BOEM’s environmental analysis. To comply with the two judgments, the agency must both fix the environmental analysis and hold leases-sales.

Keith Hall, director of the Energy Law Center at Louisiana State University School of Law, said in an interview that because BOEM had already done the screening, it could be relatively simple for the agency to update its environmental analysis.

“I think [industry] would be saying, “Well, look, you’ve already had some sort of first-pass estimate at impact,” he said. “All you have to do now is put that into an emissions calculation.”

Since the ruling only applied to an offshore lease sale governed by the BOEM, it would not affect onshore leases conducted by the Bureau of Land Management.

Industry, leading Democrats react

Frank Macchiarola, senior vice president for economics and regulatory affairs at the American Petroleum Institute, an industry group that joined the lawsuit as a defendant, said in a statement that the ruling would push production toward higher levels. foreign suppliers with lower environmental standards.

“This decision is another example of the growing political and legal uncertainty that jeopardizes the future of American energy leadership and leads to greater reliance on foreign energy sources that lead to higher emissions,” he said. -he declares.

House Natural Resources Speaker Raúl Grijalva, a Democrat from Arizona, said in a statement Thursday that Contreras was right to demand stricter environmental consideration.

“These leases were an impending climate catastrophe,” he said. “This decision is a welcome opportunity to reset our federal fossil fuel leasing policies and limit carbon emissions while there is still time to prevent the most disastrous consequences of climate change.”

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