US Government Ordered to Expand Gulf of Mexico Oil Auction
Jennifer A. Dlouhy
Fri, September 22, 2023
(Bloomberg) -- A federal judge ordered the Biden administration to expand next week’s Gulf of Mexico oil lease sale, saying officials appear to have weaponized the Endangered Species Act by yanking 6 million acres off the auction block.
The Interior Department’s Bureau of Ocean Energy Management “failed to justify” shrinking the territory offered in the Sept. 27 sale amid concerns it could harm one of the world’s most endangered whales, US District Judge James Cain wrote in a 30-page ruling late Thursday.
The Louisiana-based judge noted that when the agency scaled-down the sale, it cited a 2022 study that indicated the Rice’s whale may be found in the affected waters — despite previously weighing the same research in determining restrictions weren’t needed.
The administration’s decision was an “unexplained about-face” that leaves the impression the move “is merely an attempt to provide scientific justification to a political reassessment of offshore drilling,” Cain wrote. “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,” he said.
Cain ordered the department to conduct the sale including the previously withdrawn acreage by Sept. 30, a deadline imposed under last year’s climate law.
Louisiana Win
The decision is a win for Louisiana, which argued it stood to lose as much as $2.2 million in royalties. It’s also a victory oil industry challengers to the administration’s plan, including the American Petroleum Institute, Chevron USA Inc., and Shell Offshore Inc. Chevron had emphasized vessel delays would boost the time and money needed to complete projects in the area.
Ryan Meyers, a senior vice president of the American Petroleum Institute, said the ruling “hit the brakes on the Biden administration’s ill-conceived effort to restrict American development of reliable, lower-carbon energy in the Gulf of Mexico.”
But environmentalists said the order would further imperil the Rice’s whale, a species whose numbers have dwindled to as few as 51.
“These baseline protections for the Rice’s whale are quite literally the least we could be doing to save the species from extinction,” Earthjustice attorney Steve Mashuda said by email. “Meanwhile, the government is still enabling the oil industry to bid on 67 million acres of the Gulf. These oil companies are looking at the full glass after one sip and calling it empty.”
Earthjustice said it’s considering options for appeal. An Interior Department spokeswoman declined to comment.
Jennifer A. Dlouhy
Fri, September 22, 2023
(Bloomberg) -- A federal judge ordered the Biden administration to expand next week’s Gulf of Mexico oil lease sale, saying officials appear to have weaponized the Endangered Species Act by yanking 6 million acres off the auction block.
The Interior Department’s Bureau of Ocean Energy Management “failed to justify” shrinking the territory offered in the Sept. 27 sale amid concerns it could harm one of the world’s most endangered whales, US District Judge James Cain wrote in a 30-page ruling late Thursday.
The Louisiana-based judge noted that when the agency scaled-down the sale, it cited a 2022 study that indicated the Rice’s whale may be found in the affected waters — despite previously weighing the same research in determining restrictions weren’t needed.
The administration’s decision was an “unexplained about-face” that leaves the impression the move “is merely an attempt to provide scientific justification to a political reassessment of offshore drilling,” Cain wrote. “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,” he said.
Cain ordered the department to conduct the sale including the previously withdrawn acreage by Sept. 30, a deadline imposed under last year’s climate law.
Louisiana Win
The decision is a win for Louisiana, which argued it stood to lose as much as $2.2 million in royalties. It’s also a victory oil industry challengers to the administration’s plan, including the American Petroleum Institute, Chevron USA Inc., and Shell Offshore Inc. Chevron had emphasized vessel delays would boost the time and money needed to complete projects in the area.
Ryan Meyers, a senior vice president of the American Petroleum Institute, said the ruling “hit the brakes on the Biden administration’s ill-conceived effort to restrict American development of reliable, lower-carbon energy in the Gulf of Mexico.”
But environmentalists said the order would further imperil the Rice’s whale, a species whose numbers have dwindled to as few as 51.
“These baseline protections for the Rice’s whale are quite literally the least we could be doing to save the species from extinction,” Earthjustice attorney Steve Mashuda said by email. “Meanwhile, the government is still enabling the oil industry to bid on 67 million acres of the Gulf. These oil companies are looking at the full glass after one sip and calling it empty.”
Earthjustice said it’s considering options for appeal. An Interior Department spokeswoman declined to comment.
Bloomberg Businessweek
Judge blocks government plan to scale back Gulf oil lease sale to protect whale species
KEVIN McGILL
Fri, September 22, 2023
A rig and supply vessel are pictured in the Gulf of Mexico off the cost of Louisiana, April 10, 2011. A federal judge has ordered the Interior Department to expand next week’s scheduled sale of Gulf of Mexico oil and gas leases by millions of acres. The Thursday, Sept. 22, 2023, ruling rejected a scaled-back plan announced last month by the Biden administration as part of an effort to protect an endangered whale species.
KEVIN McGILL
Fri, September 22, 2023
A rig and supply vessel are pictured in the Gulf of Mexico off the cost of Louisiana, April 10, 2011. A federal judge has ordered the Interior Department to expand next week’s scheduled sale of Gulf of Mexico oil and gas leases by millions of acres. The Thursday, Sept. 22, 2023, ruling rejected a scaled-back plan announced last month by the Biden administration as part of an effort to protect an endangered whale species.
(AP Photo/Gerald Herbert, File)
NEW ORLEANS (AP) — A federal judge has ordered the Interior Department to expand next week's scheduled sale of of Gulf of Mexico oil and gas leases by millions of acres, rejecting a scaled-back plan announced last month by the Biden administration as part of an effort to protect an endangered whale species.
The Biden administration on Friday asked the 5th U.S. Circuit Court of Appeals in New Orleans to block the order issued Thursday night in Lake Charles, Louisiana, by U.S. District Judge James David Cain Jr. Environmental groups represented by the Earthjustice organization also appealed.
As originally proposed in March, the Sept. 27 sale was would have made 73 million acres (30 hectares) of offshore tracts available for drilling leases. That area was reduced to 67 million acres (27 hectares) in August when Interior's Bureau of Ocean Energy Management announced final plans for the sale. Cain's injunction restores the original coverage area.
BOEM's revision also included new speed limits and requirements for personnel on industry vessels in some of the areas to be leased — also blocked by Cain's order.
BOEM had adopted the reduced area and new rules for next week's sale as part of an agreement the administration reached last month with environmentalists in efforts to settle a whale-protection lawsuit filed in federal court in Maryland.
Chevron, Shell Offshore, the American Petroleum Institute and the state of Louisiana sued to reverse the cut in acreage and block the inclusion of the whale-protecting measures in the lease sale provisions. They claimed the administration’s actions violated provisions of a 2022 measure, labeled the Inflation Reduction Act, that provided broad incentives for clean energy, along with creating new drilling opportunities in the Gulf. They also said the changes after the initial lease sale was proposed in March violate federal law because they were adopted arbitrarily, without sufficient explanation of why they are needed.
Meanwhile, rival litigation filed by Earthjustice and other prominent environmental groups seeks to halt the lease sale. The organizations say the lease sale violates the National Environmental Policy. They say the administration failed to account for health threats to Gulf Coast communities near oil refineries and didn’t adequately the effects of new fossil fuel development on the climate.
Energy industry representatives welcomed the ruling. “The injunction is a necessary and welcome response from the court to an unnecessary decision by the Biden administration,” Erik Milito, President of the National Ocean Industries Association, said in an emailed news release. “The removal of millions of highly prospective acres and the imposition of excessive restrictions stemmed from a voluntary agreement with activist groups that circumvented the law, ignored science, and bypassed public input.”
An Earthjustice attorney said the order blocks “baseline protections" to help protect the Rice’s whale from extinction.
“These oil companies are looking at the full glass after one sip and calling it empty,” the attorney, Steve Mashuda, said in an emailed statement.
NEW ORLEANS (AP) — A federal judge has ordered the Interior Department to expand next week's scheduled sale of of Gulf of Mexico oil and gas leases by millions of acres, rejecting a scaled-back plan announced last month by the Biden administration as part of an effort to protect an endangered whale species.
The Biden administration on Friday asked the 5th U.S. Circuit Court of Appeals in New Orleans to block the order issued Thursday night in Lake Charles, Louisiana, by U.S. District Judge James David Cain Jr. Environmental groups represented by the Earthjustice organization also appealed.
As originally proposed in March, the Sept. 27 sale was would have made 73 million acres (30 hectares) of offshore tracts available for drilling leases. That area was reduced to 67 million acres (27 hectares) in August when Interior's Bureau of Ocean Energy Management announced final plans for the sale. Cain's injunction restores the original coverage area.
BOEM's revision also included new speed limits and requirements for personnel on industry vessels in some of the areas to be leased — also blocked by Cain's order.
BOEM had adopted the reduced area and new rules for next week's sale as part of an agreement the administration reached last month with environmentalists in efforts to settle a whale-protection lawsuit filed in federal court in Maryland.
Chevron, Shell Offshore, the American Petroleum Institute and the state of Louisiana sued to reverse the cut in acreage and block the inclusion of the whale-protecting measures in the lease sale provisions. They claimed the administration’s actions violated provisions of a 2022 measure, labeled the Inflation Reduction Act, that provided broad incentives for clean energy, along with creating new drilling opportunities in the Gulf. They also said the changes after the initial lease sale was proposed in March violate federal law because they were adopted arbitrarily, without sufficient explanation of why they are needed.
Meanwhile, rival litigation filed by Earthjustice and other prominent environmental groups seeks to halt the lease sale. The organizations say the lease sale violates the National Environmental Policy. They say the administration failed to account for health threats to Gulf Coast communities near oil refineries and didn’t adequately the effects of new fossil fuel development on the climate.
Energy industry representatives welcomed the ruling. “The injunction is a necessary and welcome response from the court to an unnecessary decision by the Biden administration,” Erik Milito, President of the National Ocean Industries Association, said in an emailed news release. “The removal of millions of highly prospective acres and the imposition of excessive restrictions stemmed from a voluntary agreement with activist groups that circumvented the law, ignored science, and bypassed public input.”
An Earthjustice attorney said the order blocks “baseline protections" to help protect the Rice’s whale from extinction.
“These oil companies are looking at the full glass after one sip and calling it empty,” the attorney, Steve Mashuda, said in an emailed statement.
Thomas Catenacci
FAUX NEWS GLOATS
Fri, September 22, 2023
A federal court struck down the Biden administration's last-minute restrictions on an upcoming offshore oil and gas lease sale in a ruling late Thursday evening.
Judge James Cain of the Western District of Louisiana granted a preliminary injunction request from plaintiffs — the State of Louisiana, industry association American Petroleum Institute (API) and oil companies Chevron and Shell — to block the Bureau of Ocean Energy Management's (BOEM) restrictions on Lease Sale 261. The lease sale spanning millions of acres across the Gulf of Mexico is slated for next week.
Cain ruled the federal government must proceed with the lease sale by Sept. 30 under its original conditions. As a result of a July settlement with environmental groups, BOEM removed about six million acres from the sale and imposed various restrictions on oil and gas vessels associated with the leases auctioned to protect the Rice’s whale species found in parts of the Gulf of Mexico.
"The court observes that plaintiffs have demonstrated substantial potential costs resulting from the challenged provisions," Cain wrote in his decision. "While the government defendants largely focus on the acreage withdrawal and dynamics of the sale itself, many of plaintiffs’ alleged hardships arise from the vessel restrictions."
The Biden administration's actions — rejected by a federal court late Thursday — removed about six million acres of potentially oil-rich leases from an upcoming federal lease sale.
"Industry plaintiffs have shown a likelihood that these will burden their operations on current and planned leases," the ruling continued. "The resulting costs would not be undone by the court’s entry of a permanent injunction and order of another sale."
Fri, September 22, 2023
A federal court struck down the Biden administration's last-minute restrictions on an upcoming offshore oil and gas lease sale in a ruling late Thursday evening.
Judge James Cain of the Western District of Louisiana granted a preliminary injunction request from plaintiffs — the State of Louisiana, industry association American Petroleum Institute (API) and oil companies Chevron and Shell — to block the Bureau of Ocean Energy Management's (BOEM) restrictions on Lease Sale 261. The lease sale spanning millions of acres across the Gulf of Mexico is slated for next week.
Cain ruled the federal government must proceed with the lease sale by Sept. 30 under its original conditions. As a result of a July settlement with environmental groups, BOEM removed about six million acres from the sale and imposed various restrictions on oil and gas vessels associated with the leases auctioned to protect the Rice’s whale species found in parts of the Gulf of Mexico.
"The court observes that plaintiffs have demonstrated substantial potential costs resulting from the challenged provisions," Cain wrote in his decision. "While the government defendants largely focus on the acreage withdrawal and dynamics of the sale itself, many of plaintiffs’ alleged hardships arise from the vessel restrictions."
The Biden administration's actions — rejected by a federal court late Thursday — removed about six million acres of potentially oil-rich leases from an upcoming federal lease sale.
"Industry plaintiffs have shown a likelihood that these will burden their operations on current and planned leases," the ruling continued. "The resulting costs would not be undone by the court’s entry of a permanent injunction and order of another sale."
Cain also said the Biden administration's actions appeared to be an attempt to "provide scientific justification to a political reassessment of offshore drilling." And he 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."
In a statement following the ruling Thursday, API Senior Vice President and General Counsel Ryan Meyers said it was a positive step in ensuring energy security.
"We are pleased that the court has hit the brakes on the Biden Administration’s ill-conceived effort to restrict American development of reliable, lower-carbon energy in the Gulf of Mexico," Meyers said in a statement.
"Today’s decision will allow Lease Sale 261 to move forward as directed by Congress in the Inflation Reduction Act, removing the unjustified restrictions on vessel traffic imposed by the Department of the Interior and restoring the more than 6 million acres to the sale," he added. "This decision is an important step toward greater certainty for American energy workers, a more robust Gulf Coast economy and a stronger future for U.S. energy security."
In late August, API and its fellow plaintiffs filed the lawsuit against the Biden administration calling for the court to require the Biden administration to "fulfill its obligations to the American people." According to industry, sales like Lease Sale 261, which is the final federal offshore lease sale scheduled, are vital to ensure long-term oil and gas production.
Overall, BOEM said — following its eco settlement in July — it would offer 12,395 blocks across approximately 67 million acres in multiple regions of the Gulf of Mexico, less than the 13,620 blocks across 73.4 million acres it originally planned to offer. The acreage stripped from the sale included potentially oil-rich tracts located in the middle of the lease area.
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 injunction is a necessary and welcome response from the court to an unnecessary decision by the Biden administration," said Erik Milito, the president of the National Ocean Industries Association (NOIA). "The removal of millions of highly prospective acres and the imposition of excessive restrictions stemmed from a voluntary agreement with activist groups that circumvented the law, ignored science, and bypassed public input."
In addition to removing acreage from the sale, BOEM also imposed restrictions on oil and gas vessel traffic associated with the leases set to be auctioned during Lease Sale 261. 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.
BOEM's restrictions came in response to the administration's settlement last month with a coalition of four environmental groups led by the left-wing Sierra Club.
In a federal stipulated stay agreement filed on July 21, the National Marine Fisheries Service (NMFS) agreed to a number of conditions requested by the groups which, in response, agreed to temporarily pause litigation in the related case. The case dates back nearly three years when, in October 2020, the environmental coalition sued the NMFS for failing to properly assess the oil industry impacts on endangered and threatened marine wildlife in the Gulf of Mexico.
The groups pursued the lawsuit after the NMFS coordinated a multiagency consultation studying the effects all federally regulated oil and gas activities would have on species like the Rice's whale listed under the Endangered Species Act in the Gulf of Mexico over the next 50 years. The groups argued in the original complaint that the NMFS' biological opinion resulting from its consultation was not based on the best science.
API and NOIA also argued BOEM's action had contravened the congressional intent of the Inflation Reduction Act, which reinstated multiple lease sales, including Lease Sale 261, after the Biden administration axed them in May 2022. In the sale's record of decision, it is mandated to be region-wide while its environmental analysis didn't acknowledge risks it may pose to the Rice’s whale.
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