Enforcement and Inspection

Industry Battles Feds to Resume Oil and Gas Lease Programs

To comply with U.S. District Judge Terry Doughty’s June 2021 ruling in the 5th Circuit Court of Appeals, the Department of Interior (DOI) announced it will resume federal offshore oil and gas leasing programs while the Department of Justice (DOJ) is appealing Doughty’s injunction in Louisiana v. Biden.

The Oil & Gas Journal reports the announcement was a result of a push from industry.

“The push came in the form of a lawsuit filed Aug. 16 by the American Petroleum Institute, the Independent Petroleum Association of America, the National Ocean Industries Association, and nine other national and regional trade groups.

“The associations charged that Interior was violating the Mineral Leasing Act, the Outer Continental Shelf Lands Act, the Administrative Procedure Act, and other laws governing federal land management and regulatory procedures… Five hours after their announcement of the litigation, Interior issued a statement saying it would comply with the June 15 injunction,” according to the Journal.

The industry lawsuit was filed in the 5th District, where Doughty issued the ruling to resume the leasing program.

Green groups are berating President Joe Biden over the resumption, claiming he has not honored his promise to ban drilling on federal water and lands, notes the Washington Times.

“It’s encouraging that the Biden Administration is appealing this wrongful decision,” says Nicole Ghio, senior fossil fuels program manager of Friends of the Earth. “However, the President made a promise to ban all new oil and gas leasing on public lands and waters, and the American people expect him to keep it. The climate emergency reality we are facing demands immediate action, not acquiescence.”

Rep. Raul Grijalva (D-Ariz.), Chair of the House Natural Resources Committee, “said he was ‘disappointed’ in the administration’s decision to restart drilling auctions, insisting that Interior Secretary Deb Haaland ‘has the authority to pause leasing,’” the Times adds.

“Holding more lease sales under today’s outdated standards is economically wasteful and environmentally destructive, and everyone not sitting in a fossil fuel boardroom knows it,” Grijalva says.

The DOI concedes that the current federal oil and gas leasing programs are flawed.

“Together, federal onshore and offshore oil and gas leasing programs are responsible for significant greenhouse gas emissions and growing climate and community impacts. Yet the current programs fail to adequately incorporate consideration of climate impacts into leasing decisions or reflect the social costs of greenhouse gas emissions including, for example, in royalty rates,” according to the DOI press release.

The press release also acknowledges that the flaws in the program have been the subject of numerous critical reports by the Government Accountability Office (GAO) dating as far back as 1989.

“Interior will proceed with leasing consistent with the district court’s injunction during the appeal. In complying with the district court’s mandate, Interior will continue to exercise the authority and discretion provided under the law to conduct leasing in a manner that takes into account the program’s many deficiencies. Separately, Interior continues to review the programs’ noted shortcomings, including completing a report. The Department also will undertake a programmatic analysis to address what changes in the Department’s programs may be necessary to meet the President’s targets of cutting greenhouse gas emissions in half by 2030 and achieving net zero greenhouse gas emissions by 2050.”

As of yet, the DOI has not announced any public plans for new lease sales, according to Offshore magazine.

The DOI press release also announced its intention to begin review of the federal coal leasing program in August 2021.