Today’s Key Takeaway: Feds can no longer look for ways to avoid auction required by the Inflation Reduction Act.
Court Orders Biden Administration to Hold Oil and Gas Lease Sale
Charles Kennedy, OilPrice.Com,November 15, 2023
A federal appeals court has ordered the federal government to hold an oil and gas lease sale for the Gulf of Mexico within 37 days.
It will be the last lease sale for the Gulf of Mexico until 2025, Bloomberg noted in a report.
The obligation to sell drilling rights to the oil and gas industry in the Gulf of Mexico was a stipulation in the Inflation Reduction Act spearheaded by Senator Joe Manchin in exchange for his support for the IRA and its climate stipulations.
The federal government, however, actively looked for ways to avoid the auction, at least in its initial size. Earlier this year, the Interior Department decided to reduce the size of the area to be auctioned to 67 million acres instead of 73.4 million acres, citing the habitat of a rare whale species that fell within the initial area.
The oil industry challenged the decision in court. The judge ruled in favor of the plaintiffs. Noting that the BOEM had failed to justify this last-minute change, District Judge James 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.”
Following this ruling, it was time for the environmentalist camp to respond with its own legal challenge, which it promptly did, trying to cancel the lease sale altogether citing the endangered status of the Rice’s whale. The court, once again, sided with oil and gas.
“The oil industry fought tooth and nail to tear up basic measures to save one of the most endangered marine mammals in the world,” George Torgun, an attorney with Earthjustice, told Bloomberg. “This could be the difference between doing the bare minimum to save this species and allowing it to vanish.”
The American Petroleum Institute welcomed the decision and said it would guarantee the supply of affordable and reliable energy to Americans.