On Thursday, a U.S. District Court Judge in Louisiana barred the Department of Interior (DOI) from limiting acreage available to energy production in its upcoming offshore oil lease sale, which is scheduled to take place on September 27th. The decision was a blow to activists and the Biden administration, who hoped to restrict oil drilling in the Gulf of Mexico under the guise of protecting the Rice’s whale.
Judge James Cain saw right through this tactic, stating that the DOI’s Bureau of Ocean Energy Management acknowledged earlier this year in its Proposed Notice of Sale that enough protection measures were already in place to protect the wellbeing of the Rice’s whale:
“The PNOS for Lease Sale 261 was issued in March 2023, soon after BOEM had publicly confirmed through its supplemental EIS that it did not believe additional measures were required to protect Rice’s whale.” (emphasis added)
Despite BOEM’s Environmental Impact statement, the Interior recently gave into activists’ demands to add a lease stipulation to Lease Sale 261. In addition to adding buffer zone restrictions specifically on oil and gas tankers that would effectively render the entire sale moot, the new stipulation – announced on August 25 in the Interior’s Final Notice of Sale (FNOS) just a month before the sale – aimed to limit an addition 6 million acres of oil and natural gas development.
Judge Cain called out the agency for adding in this last-minute stipulation, stating that it violated BOEM’s own procedures by making significant changes to the FNOS and deprived states and the public from being able to provide comments after meaningful review:
“The procedural error is grave here, because of both the compressed timeline and BOEM’s inexplicable about-face on the scientific record it had previously developed.” (emphasis added)
Judge Cain further emphasized the fact that BOEM had no scientific justification for their “surprise switcheroo” indicating that the government was simply weaponizing a federal law to please activists:
“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. 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. Failure to do so leads to “surprise switcheroo” by an agency against regulated entities.”
Limiting offshore federal lease acreage not only violates Congressional mandates laid out in the Inflation Reduction Act, the procedural requirements of the Outer Continental Shelf Lands Act, and the Administrative Procedure Act (APA), but has sincere adverse effects on local communities that rely on revenue and jobs from offshore oil production. Judge Cain also noted the inconvenience the federal government placed on the state of Louisiana and the industry:
“As described below, Louisiana has a significant stake in offshore leasing. Because of BOEM’s bait and switch tactics, however, it was deprived of its statutorily guaranteed right to address a significant modification to leasing protocols for a long-term lease sale off its coast…the last-minute changes and challenged terms may also have sizable impacts on bidding dynamics and operations for the industry parties.” (emphasis added)
The American Petroleum Institute applauded Cain’s ruling, stating it would “remove the unjustified restrictions on vessel traffic.”
Bottom Line: Actions to limit Congressionally mandated federal leasing defy the rule of law and harm local communities that rely on domestic energy production. At a time when gas prices are on the rise, environmental groups have already appealed Judge Cain’s Court order – once again begging for restrictions on offshore drilling and ignoring the thorough environmental reviews that have already taken place. And all of this is taking place against the backdrop of Interior’s delays in releasing a five-year offshore plan, which places incredible uncertainty on offshore investment and future production.
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