Biden Administration’s Gulf Lease Amendments Challenged in Court
Oil Groups and State Attorney General Challenge Biden Administration’s Gulf of Mexico Lease Sales
Public sector oil groups have joined a Republican state attorney general in bringing suit against the Biden administration’s Department of the Interior over changes to a Gulf of Mexico lease sales amended to protect the endangered Rice’s whale.
The American Petroleum Institute (API) has joined forces with the State of Louisiana and Chevron U.S.A. Inc. in lodging a formal challenge (pdf) on Aug. 24 against the Department of the Interior’s Bureau of Ocean Management’s (BOEM) Final Notice of Sale for Lease Sale 261.
Louisiana, Chevron, and the API argued that the amendment violates the Inflation Reduction Act’s requirement that leases be sold in September. However, the sale is marked by a substantial reduction in available acreage and stringent regulations on oil and natural gas vessel movement.
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As the organization that represents all aspects of the American oil and natural gas industry, API emphasizes its support for nearly 11 million U.S. jobs represented in the industry.
“Today we’re taking steps to challenge the Department of the Interior’s unjustified actions to further restrict American energy access in the Gulf of Mexico,” said API Senior Vice President and General Counsel Ryan Meyers.
“Despite Congress’ clear intention in the Inflation Reduction Act, the Biden administration has announced a ‘lease sale in name only’ that removes approximately 6 million acres of the Gulf of Mexico from the sale and adds new and unjustified restrictions on oil and natural gas vessels operating in this area, ignoring all other vessel traffic. Together with the State of Louisiana and Chevron U.S.A. Inc., we intend to use every legal tool at our disposal to challenge these actions.”
According to API’s press release about the action, the backdrop of this development lies in the comprehensive Five-Year Program for Federal Offshore Leasing, a framework established over four decades ago.
Designed to cater to the United States’ energy requirements for five-year intervals, the plan delineates a schedule for regular oil and natural gas lease auctions, including those in the Gulf of Mexico.
The company went on to assert that the lapse of the Department of the Interior’s five-year offshore leasing program, without an immediate substitute, has spanned more than a year. This hiatus has raised concerns in energy circles, particularly given the significance of the U.S. Gulf of Mexico as a source of low-carbon intensity crude. The potential slow or pause for production in this region could, according to the suit, prompt the substitution of higher carbon-intensity sources from around the globe.
The lawsuit uses statistics from the U.S. Energy Information Administration (EIA) to show that 15 percent of all crude oil production in the U.S. comes from government offshore oil production in the Gulf of Mexico.
Also, 5 percent of the dry gas produced in the United States comes from government offshore natural gas production in the Gulf. Notably, more than 47% of the U.S.’s capacity to refine oil and 51 percent of its capacity to process natural gas are all located along the Gulf Coast.
In the month before, an agreement was made public that included practical “recommendations” that could put a lot of pressure on industry players. Inadvertently, these ideas are thought likely to increase pollution.
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