Interior announces first oil drilling sales of the Biden era

The Biden government announced yesterday that it will hold its first oil and gas lease sales this year, despite continuing to battle in court for its authority to suspend state and waterway drilling rights for huge fossil fuel reserves.

The Justice Department set out its plan to conduct rental sales in a brief filed with the U.S. District Court for the Western District of Louisiana yesterday evening, and the federal leasing program is set to resume.

The announcement is the latest step in a fierce battle between the White House, Republican states, and oil interests over the future of the Home Office-monitored federal oil and gas program.

“Interior immediately stated its intention to comply with the decision. And following that decision is exactly what Interior did, ”Todd Kim, assistant attorney general for the DOJ’s Environment and Natural Resources Division, wrote in the briefing yesterday.

President Biden froze new oil and gas lease sales shortly after taking office when he ordered a review of the program and its climate impact. The move sparked fierce opposition from Republican lawmakers, who said it would cut revenues and threaten industrial jobs. A group of 13 red states have filed lawsuits to reverse Biden’s freeze.

The Biden government is appealing Doughty’s June injunction alleging that the oil and gas leasing program is full of flaws (Energywire, Aug. 17).

In a statement yesterday evening, Interior said it “will continue to exercise the powers and discretion provided by law to conduct leasing in a manner that is consistent with Interior’s legal obligations, including taking into account the documented deficiencies in the programs.”

The agency announced that it would initially advance a lease sale in the Gulf of Mexico, the country’s largest offshore production region.

Interior said it would issue a decision to sell in the Gulf by the end of the month, with a sales announcement likely in September. It will also begin considering quarterly lease sales and weighing restrictions on industry-proposed land in the western United States, with sales notices being released later this year.

Interior also announced it will begin drafting an environmental review for auction in Cook Inlet, Alaska this fall.

Despite indoor appeal, momentum in the Louisiana case appears to be building in favor of Republican-led states. A federal judge recommended Monday that the red-state lawsuit against the Biden administration be allowed ahead – a positive signal to opponents of Biden’s efforts to stop oil and gas leasing. The government asked the court to dismiss the lawsuit.

“We note that plaintiffs have sufficient alleged facts to show that the president acted beyond his legal or constitutional authority,” wrote Judge Kathleen Kay on Monday, adding that they are entitled to a “judicial review” of the Actions of the President.

She also said the challengers had shown a negative economic impact from the federal lease hiatus. The parties to the lawsuit have two weeks to file objections before Doughty takes over to make a final decision on the Biden government’s appeal.

A “humble” future?

The Louisiana lawsuit – as well as a lawsuit against the Biden government filed by the Western Energy Alliance in Wyoming and a third filed by a dozen energy trading groups led by the American Petroleum Institute – could put some legal limits on that put what the Biden administration can do to stem federal drilling. Experts have pointed out that different federal laws apply to both offshore and onshore oil and gas leasing.

However, yesterday several industry groups expressed skepticism about the announcement of Interior.

Kathleen SGAMma, Director of the Western Energy Alliance, described the move as “arrest tactics” and urged Biden Administration to perform quickly new lease sales.

“The pleading filed with the court today appears to show progress, but the slow pace shows one step forward and three steps back,” she said.

Michael Zehr, federal affairs advisor for the Consumer Energy Alliance, shared Sgamma’s concerns.

“While we’re glad the Biden administration has announced a resumption of offshore lease sales as required by law, the delay has been far too long and too many questions remain unanswered by today’s announcement,” he said creating unnecessary confusion , Inconsistency and uncertainty for America’s energy producers. “

Environmental groups have criticized the Biden government for complying with the court order, arguing that the federal oil program is grappling with the threat of climate change.

“The law is clear. Interior minister [Deb] Haaland has wide discretion in determining which lands, if any, are available for oil and gas leasing, ”Jesse Prentice-Dunn, director of the Center for Western Priorities, said in a statement yesterday.

“Given the urgency of the climate crisis and the well-documented flaws in the lease system, she needs to ensure that all public leases that are auctioned take full account of the costs our children and grandchildren face.”

Prentice-Dunn also called for the publication of an interim report on the reform of the federal oil and gas program. The Biden administration promised the report would be ready in early summer but held it back for several weeks.

But while the climate impact of the federal oil program is at the center of the court case, some have questioned how far the Biden White House will go in a politically painful battle over the lease phase of the national oil and gas program.

“A modest leasing program isn’t really the problem,” said Mark Squillace, a professor at the University of Colorado, Boulder, Law School who served as a special assistant to the Interior attorney during the Clinton administration. “Interior could offer a limited number of leases, focused on areas where significant development already exists and where environmental conflicts can be minimized without significantly worsening climate change.”

He said, “Honestly, they should have been doing that all along.”