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A Judge’s Gavel Keeps the Oil Drills from Spinning – for the Time Being

Environmental Policy Brief #134 | By: Todd J. Broadman | February 2, 2022

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Policy Summary

On January 27, the country’s largest ever oil and gas lease sales were canceled by a federal judge. A total of 308 tracts totaling nearly 1.7 million acres in the Gulf of Mexico had been auctioned to thirty-three oil companies – Shell, BP, Chevron and Exxon Mobil among them. $192 million had been paid to the government for drilling rights.

In his ruling, Judge Rudolph Contreras of the United States District Court for the District of Columbia, said that the Interior Department “acted arbitrarily and capriciously in excluding foreign consumption from their greenhouse gas emissions.” And by this, Judge Contreras meant that the administration was required to calculate the greenhouse gas impact if the leases were not exercised and foreign oil sources were used as a substitute. Under the National Environmental Policy Act, or NEPA, the federal government must factor-in environmental damage before issuing such leases. The Department of the Interior is responsible for overseeing this process.

Back in early 2020, a pillar of candidate Biden’s campaign had been: “no more drilling on federal lands, period. Period, period, period.” And true to his word, soon after taking office, he signed an executive order that halted the issuance of new leases. In response to that order though, Republican attorneys general from 13 states sued and won on the grounds that lease sales must be held for those with scheduled auction dates (from the previous administration). Rather than face possible contempt of court charges, Interior Secretary Deb Haaland proceeded with the sale.

Prominent environmental organizations brought the lawsuit and are pleased with the outcome. Earthjustice’s counsel Brettny Hardy, said “This is huge, it requires the bureau to go back to the drawing board and actually consider the climate costs before it offers these leases for sale.” Hallie Templeton of Friends of the Earth, added that “We will continue to hold the Biden administration accountable for making unlawful decisions that contradict its pledge to take swift, urgent action on code red climate and environmental justice priorities.”

Over and above a warming climate, the unfolding environmental disaster in Peru underscores the additional ongoing risks of drilling at sea. It is now estimated that approximately 12,000 barrels of oil – equivalent to half a million gallons – spilled near the port city of Callao when tsunami waves triggered by a volcanic explosion caused a rupture of the terminal’s submarine pipeline. Peru’s Foreign Ministry has described it as the worst ecological disaster in recent times.

Policy Analysis

In line with Biden’s pledge, The International Energy Agency has declared that in order to avoid climate disaster, there can be no new major fossil fuel projects. In fact, three congressional Democrats had filed a court brief in support of the environment groups in this case. Raúl Grijalva, chair of the House natural resources committee, said “These leases were a climate disaster waiting to happen.”

The American Petroleum Institute, representing the oil firms whose leases were canceled, see this federal court decision very differently: “We are reviewing this disappointing decision and considering our options. Offshore energy development plays a critical role in strengthening our nation’s economy and energy security,” said their spokesperson.

The ruling means that the Interior Department must now carry out a new environmental analysis that accounts for the greenhouse gas emissions that would result from the eventual development and production of the leases. And once a comprehensive analysis is in hand, the agency will then have the option of again holding a sale for such leases. Meanwhile, the administration has proposed another round of oil and gas sales in Wyoming, Colorado, Montana and other states.

A rig and supply vessel in the Gulf of Mexico, off the cost of Louisiana. Thirteen states sued the Biden administration in March 24 to end a suspension of new oil and gas leases on federal land and water and to reschedule canceled sales of offshore leases in the Gulf of Mexico, Alaska waters and Western states.

Photo taken from: The Houston Chronicle

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The country’s dependence upon fossil fuels will continue to exert pressure upon an administration that is putting in place policies that transition away from carbon. Although this particular win is hopeful, the longer-term tug of war played out in the courts will likely not be won by environmental groups but by economic interests that tie the country’s deep dependence on petroleum to growth and jobs.

Though a step in the right direction, even with a moratorium on new leases on federal lands, Biden’s promised CO2 reduction to over 50% below 2005 levels by 2030, is unlikely to be realized.

Engagement Resources​

Click or tap on resource URL to visit links where available 

https://earthjustice.org/  wields the power of law and the strength of partnership to protect people’s health, to preserve magnificent places and wildlife, to advance clean energy, and to combat climate change.

https://biologicaldiversity.org/  works to secure a future for all species, great and small, hovering on the brink of extinction.

https://news.bloomberglaw.com/ provides data-rich, actionable perspectives on key issues shaping the practice of law and preview what to expect across the legal landscape in the year ahead.

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