Court Says Gulf Oil and Gas Lease Sale Must Proceed Without Restrictions

LAKE CHARLES, La. — A federal judge has ordered the Interior Department to proceed with a pending oil and gas lease sale in the Gulf of Mexico without last-minute restrictions added to protect an endangered species of whale.

U.S. District Judge James David Cain Jr., issued a preliminary injunction regarding the new restrictions on Thursday, ruling in favor of the American Petroleum Institute, the state of Louisiana and Chevron USA.

In handing down his ruling, Cain said the Interior Department’s Bureau of Ocean Energy Management had violated the Outer Continental Shelf Lands Act and the Administrative Procedure Act, adding acreage and ship restrictions to the leases without, among other things, giving the public an adequate opportunity to comment.

The added restrictions were intended to protect Rice’s whales, an endangered species only known to live in the northeastern Gulf of Mexico, an area where no oil and gas leasing occurs.

When it originally announced Lease Sale 26, which is scheduled to occur on Wednesday, Sept. 27, the agency’s position was that existing restrictions were sufficient to protect the endangered whale.

Then, in late August, it did an about-face and imposed new restrictions, prompting the lawsuit.

“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,” Cain wrote. 

“Even when an agency’s decision is based on political considerations, it is not excused from justifying the position — particularly when the decision is a pivot from a prior policy,” he said.

“The procedural error is particularly grave here, because of both the compressed timeline and BOEM’s inexplicable about-face on the scientific record it had previously developed,” Cain added.

The contested restrictions would have blocked new exploration in approximately 6 million acres of the Gulf and also would have imposed operational restrictions for oil and gas industry ships passing through those areas. 

Erik Milito, president of the National Ocean Industries Association, welcomed news of the injunction, calling it “a necessary and welcome response from the court to an unnecessary decision by the Biden administration.” 

“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,” Milito continued.

“In a period when inflation is increasing expenses for Americans, particularly in terms of gasoline prices, we must fully harness America’s energy production capabilities, particularly those offshore,” he said, adding, “Our leaders should stop ignoring the vast benefits that U.S. offshore oil and gas production provides to Americans. 

“This includes an abundance of energy resources, high-paying job opportunities, environmentally responsible low carbon output, support for coastal resilience and restoration, and enhanced national security, among numerous other benefits,” Milito concluded.

Environmental groups that had intervened in the case, Louisiana v. Deb Haaland, on the side of the Biden administration, were not so sanguine. 

“These baseline protections for the Rice’s whale are quite literally the least we could be doing to save the species from extinction,” said Earthjustice attorney Steve Mashuda, who is representing the interveners.

The group includes the Sierra Club, Center for Biological Diversity, Friends of the Earth and the Turtle Island Restoration Network. 

“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,” Mashuda said.

Kristen Monsell, oceans legal director at the Center for Biological Diversity, was even angrier.

“The oil and gas industry’s greed is astounding, and I’m heartbroken that oil executives won’t make even minor accommodations to protect a whale from going extinct,” Monsell said. “The federal government is offering oil and gas companies more than 67 million additional acres of public waters for drilling, and it’s still not enough to satisfy Big Oil. 

“The Gulf doesn’t belong to the industry. It belongs to the people and wildlife living there, and it’s time to start saying no to harmful drilling activities,” she said.

“Once again, big oil wins and the marine environment suffers,” said Joanie Steinhaus, director of the Turtle Island Restoration Network. “The Rice’s whale is a species that is on the verge of extinction and this ruling takes away the minimum protection for this species. 

“The Gulf of Mexico does not belong to the oil industry, it belongs to the people and the federal government needs to step up and protect it,” Steinhaus said.

The environmentalists and the Biden administration filed a notice of appeal of Cain’s ruling in the 5th U.S. Circuit Court of Appeals on Friday.

As they await the outcome of that appeal, officials at BOEM said Friday they will continue to take steps to comply with Cain’s order.

“Although the United States is seeking an emergency stay of this order to allow time for a more orderly lease sale process, in the event such relief is not granted, Lease Sale 261 will be conducted on Sept. 27, 2023, and in accordance with the court’s order,” the agency said in a press release on Friday.

The release went on to say that the Bureau would include lease blocks that were previously excluded due to concerns regarding potential impacts to the Rice’s whale distribution in the Gulf of Mexico and it also said it would remove portions of a related stipulation meant to address potential impacts to Rice’s whale from the lease terms for the leases that may be issued as a result of Lease Sale 261. 

BOEM is also extending the bid submission period to 3 p.m. CST on Sept. 26, 2023. 

For Lease Sale 261 only, bidders may hand deliver bids from 9:00 a.m. – 3:00 p.m. CST on Sept. 25 and 26, or send via mail. For additional bidding instructions modified as a result of the court’s order, please see the agency’s website.

BOEM plans to broadcast the opening of bids for Lease Sale 261 via its website on Sept. 27, at 9 a.m. CST. 

Dan can be reached at [email protected] and at https://twitter.com/DanMcCue