This week, the Biden Administration announced it would resume oil and gas leasing on federal lands later this year, with plans to hold a Gulf of Mexico auction as early as October. As stated in court documents filed in Louisiana v. Biden, the federal onshore and offshore oil and gas leasing program will continue as required by the district court as the government files an appeal.
On January 27, 2021, with the signing of executive orders, President Biden suspended the oil and gas leasing program to examine the existing oil and gas leasing regulations to see if there was room for modifications. The U.S. Department of the Interior (DOI) then canceled oil and gas lease sales from public lands through June, affecting Montana, New Mexico, Utah, Nevada, Colorado, Wyoming, and the bureau’s eastern region.
News of Biden’s suspension immediately received an adverse reaction from many, including the Western Energy Alliance and states across the nation that sees revenues in the tens of millions from oil and gas production royalties. As reported by UncoverDC, a group of thirteen states sued the Biden administration in March, arguing that the ban would result in GDP losses of $33.5 billion during Biden’s first term and another $8.8 billion in conservative funding.
Later, on June 15, Louisiana Judge Terry A. Doughty ruled the White House had no right to stop oil leasing without the approval of Congress and issued a preliminary injunction effectively blocking the ban. With the pause effectively still in place in late July, Republican Senators accused Interior Secretary Deb Haaland of defying the judge’s orders to restart oil leases. Louisiana Senator Bill Cassidy, a member of the Energy and Natural Resources Committee, said, “The pause is effectively defying the federal judge’s order to continue.”
Meanwhile, as the pause continued, a new study commissioned by the National Ocean Industries Association (NOIA) and conducted by the Energy & Industrial Advisory Partners (EIAP) explained how “the 30-year lifecycle of each offshore oil and gas project serves as an economic engine for American investment and thousands of high paying jobs.” NOIA President Erik Milito stated:
“The multitude and diversity of U.S. offshore oil and gas jobs begin well before any lease sale. These jobs, which are high paying and accessible, lift countless Gulf Coast communities and support the investment footprint of businesses in every single U.S. state. The Gulf of Mexico has transformed into a national strategic infrastructure asset, and we must make every effort to sustain it through a predictable regulatory system that includes regularly scheduled lease sales and continued permitting.
“While the global economy is transitioning to a lower-carbon future, the offshore oil and gas industry is playing a key role through investing in low carbon technologies and developing oil and gas projects that are recognized as providing the lowest carbon barrels. Government policy should continue to encourage investment in the U.S. Gulf of Mexico energy sector to secure the tremendous energy, climate, and national security benefits for American citizens, as well as help avert potential inflationary risks associated with high energy costs.
“Instead of trying to fix with an unforced error by turning to foreign, higher-emitting sources of energy and asking OPEC to increase oil production, President Biden should fulfill his legal obligation to schedule and hold offshore oil and gas lease sales and abandon the shortsighted leasing pause. As long as Americans depend upon oil and gas for modern life, it must come from somewhere and it is clearly better to get oil and gas here at home than from a foreign state with weak environmental safeguards.”
Paying attention to the impact of the pause, on August 16, a dozen oil industry trade groups, led by American Petroleum Institute (API), joined the GOP Senators in challenging the DOI’s indefinite delay on oil and natural gas leasing. The group followed at least three other related cases proceeding in federal courts and filed a lawsuit challenging the DOI’s continued suspension. “With the indefinite pause on federal oil and gas leasing, the department failed to satisfy procedural requirements and ignored congressional mandates for holding lease sales,” API Senior Vice President and Chief Legal Officer Paul Afonso declared, adding:
“The law is clear: the department must hold lease sales and provide a justification for significant policy changes. They have yet to meet these requirements in the eight months since instituting a federal leasing pause, which continues to create uncertainty for U.S. natural gas and oil producers. As our industry takes action to preserve our legal rights, we will continue working with the Biden administration on policies that support a lower-carbon future while providing access to the affordable, reliable energy our economy needs to recover.”
Later that same day (August 16)—just ahead of a court deadline for the Biden administration to explain how it was complying with Judge Doughtry’s June 15 order than oil and gas leasing should resume—the president’s team responded by filing an appeal against Doughtry’s ban, asserting, “The appeal of the preliminary injunction is important and necessary. Together, federal onshore and offshore oil and gas leasing programs are responsible for significant greenhouse gas emissions and growing climate and community impacts.”
Frustrated with Biden’s stall tactics despite a court order, Western Energy Alliance, reminding that the Mineral Leasing Act requires quarterly sales, denounced the Department of Interior’s intention to slow walk onshore lease sales. In an August 25th statement, the Alliance declared, “The Department clearly states in the brief that no sales will be held in 2021. It will only manage to publish a sales notice sometime in December, meaning sales cannot take place until January or February.” Alliance President Kathleen Sgamma added:
“The brief filed today with the court appears to show progress, but the slow walk indicates one step forward and three steps back.”