5th Circuit Blocks Oil and Gas Lease Sale in Gulf

NEW ORLEANS — A federal appeals court has temporarily paused a lower court ruling that required the Biden administration to proceed with and expand a planned offshore oil and gas auction in the Gulf of Mexico.

The auction in question has been in the works since January, when the Bureau of Ocean Energy Management published a final Environmental Impact Statement for the lease sale. Three months later the agency announced the sale would occur no later than Sept. 30.

Then, early last summer, the Biden administration announced it planned to delay the auction and scale it back in size to reduce potential impacts on the habitat of Rice’s whales, an endangered species only known to live in the northeastern Gulf of Mexico.

The oil and gas industry and the state of Louisiana sued, and in early September, U.S. District Judge James David Cain Jr. ordered the Interior Department to hold the lease sale as planned, without last-minute restrictions the administration added.

Cain, who presides in Lake Charles, Louisiana, found the department’s Bureau of Ocean Energy Management violated federal law by adding acreage and ship restrictions to the leases without, among other things, giving the public an adequate opportunity to comment.

The sale was later rescheduled to Nov. 8. But in an order handed down Thursday, the 5th U.S. Circuit Court of Appeals stayed that ruling, and said Cain’s decision would remain on hold pending an appeal.

Oral arguments in that appeal are currently scheduled for Nov. 13 in New Orleans, and it’s not clear how the timing of the hearing will impact the sale.

Though neither the Interior Department nor the bureau immediately commented on the latest twist in the case, the decision by the appellate court judges did get a sharp rebuke from House Majority Leader Steve Scalise, R-La., who called the continued delay in the sale “absurd.”

“Now, more than ever, we need to be laser-focused on unleashing American energy to lower costs for hard-working families and small businesses, while also helping our allies abroad,” Scalise said in a written statement. 

“We should not be relying on hostile foreign nations for energy like Iran, Venezuela and Russia, that use those funds to advance dangerous agendas that are at odds with our national security,” he continued.

“The continued delay … once again caves to radical extremists without giving a single thought to the impact on our energy and national security and the thousands of jobs that will be jeopardized if this sale doesn’t move forward,” Scalise added.

Sen. Joe Manchin, D-W.Va., also weighed in, urging the Bureau of Ocean Energy Management to go ahead with the lease sale as planned, pointing to a provision of the Inflation Reduction Act that mandated it be held “no later than Sept. 30.”

“This administration has made a complete mess of Lease Sale 261,” Manchin seethed in a written statement on Thursday. “BOEM must keep the commitment made during today’s hearing before the Energy and Natural Resources Committee to hold the Nov. 8 lease sale, under the current Final Notice of Sale without the new restrictions and acreage removal announced in August. 

“If that requires [the National Oceanic and Atmospheric Administration] to seek to withdraw from their voluntary settlement agreement with the Sierra Club and other environmental groups, so be it,” he said.

Later, in a separate statement, Manchin said the situation was “a good example where implementation is not living up to the law.”

“Environmental groups sued NOAA to impose new restrictions related to the Rice’s whale — but only for oil and gas development in the Gulf — and this administration capitulated in a settlement agreement, bypassing Interior’s normal procedures, adding restrictions, and agreeing to remove 6 million acres from the sale,” the senator said.

“So now the administration has delayed the sale and is scrambling to add the 6 million acres back in. This case proves that trying to rewrite an energy security law passed by Congress through administrative action is not a winning strategy,” Manchin said.

Dan can be reached at [email protected] and @DanMcCue