Federal Judge Blocks Biden Administration’s Efforts to Impose New Restrictions on Oil and Gas Lease Sale in Gulf of Mexico

A federal judge has recently ruled against the Biden administration’s attempts to remove over 6 million acres in the Gulf of Mexico from an upcoming oil and gas lease sale. Additionally, the judge blocked the imposition of new restrictions on industry vessels operating in the area.

Cain further criticized the process, stating, “The challenged provisions inserted into these leases at the eleventh hour, and the acreage withdrawal, are based only on an unexplained change in position by BOEM on a single study a few months after (the environmental review). The process followed here looks more like a weaponization of the Endangered Species Act than the collaborative, reasoned approach prescribed by the applicable laws and regulations.”

The state of Louisiana, along with the American Petroleum Institute, Chevron USA Inc., and Shell Offshore Inc. sought an injunction to block these changes after the Biden administration announced them last month. The changes to the sale, originally scheduled for September 27, were intended to align with the terms of settlement agreed upon by the Department of the Interior following a lawsuit filed by environmental groups seeking additional protections for the endangered Rice’s whale, as stated by BOEM.

New Rules Impact Gulf of Mexico Oil and Gas Industry

The recent implementation of new rules has had a substantial impact on the oil and gas industry operating in the Gulf of Mexico. These regulations have resulted in a reduction of available land, reducing it from 73.4 million acres to 67 million acres. Moreover, vessels involved in drilling operations are now subject to new speed and operating restrictions.

President Joe Biden initially paused federal oil and gas lease sales upon taking office. However, due to the provisions outlined in the Inflation Reduction Act signed by Biden in August 2022, new sales must proceed. Despite this, the recently ruled Inflation Reduction Act restrictions shall not apply to the ongoing sale, as per the instructions given by Cain.

The American Petroleum Institute (API) expressed its satisfaction with the court’s decision to halt the Biden Administration’s efforts to limit American energy development in the Gulf of Mexico. The API statement emphasized that Lease Sale 261 will proceed as directed by Congress through the Inflation Reduction Act.

Conversely, the Department of Interior is currently reviewing the court’s decision, while Earthjustice is considering an appeal. Earthjustice attorney Steve Mashuda highlights the importance of implementing basic safeguards for the Rice’s whale to prevent its extinction. He criticizes the government for allowing oil companies to bid on 67 million acres of the Gulf while simultaneously endangering a vulnerable species.

*Editing by Michael Kelly and Jeff Barber