This week, the U.S. District Court for the District of Maryland released a ruling extending the deadline for the National Marine Fisheries Service (NMFS) to issue a new critical conservation statute.
This new development came only after pleas from both the NMFS and the oil and gas industry, stating that vacating the conservation statute in December would bring offshore oil and gas operations to a screeching halt.
The court’s decision has been hotly contested.
The turmoil started with a ruling from the U.S. District Court for the District of Maryland earlier this year, which declared a critical conservation statute (Biological Opinion on the Federally Regulated Oil and Gas Program Activities in the Gulf of Mexico, or “2020 BiOp”) from NMFS as inadequate. The court set a deadline of Dec. 20 for NMFS to issue a new BiOp, at which point the 2020 BiOp would be vacated.
This week, the court extended the effective date in which the 2020 BiOp would be vacated to May 21, 2025.
The court case, Sierra Club et al. v. NMFS, API, et al., and its subsequent outcomes, have been met with widespread pushback from policymakers, regulators, and industry alike. Sen. Bill Cassidy (R-LA) called the court decision to vacate the BiOp “death by a thousand cuts”, crippling Gulf of Mexico offshore energy production.
Following the new order which extends the deadline for NMFS to deliver a new BiOp, National Ocean Industries Association (NOIA) issued a statement underscoring the importance of Gulf shore energy:
“It has become readily apparent to elected officials on both sides of the aisle that an impairment of production from the Gulf of Mexico could lead to a cascading effect throughout the American economy, delivering an unwelcome blow to consumers still reeling from inflationary impacts.
API echoed these sentiments, but advised that there is still a ways to go to assure the future of energy development offshore:
“Today’s ruling provides only temporary relief and work still must be done to avoid disruptions to the backbone of our nation’s energy supply. We stand ready to work with NMFS and offer our industry’s expertise to complete a new biological opinion that balances environmental protection and the world’s growing need for affordable, reliable energy.”
Offshore oil & gas development supports local economies and critical federal programs.
Energy production in the Gulf generates $364 million in state & local revenues, leading to $6.1 billion in federal revenue. And the Bureau of Ocean Energy Management (BOEM) reports that offshore energy contributes more than $20.6 billion in value to the U.S. GDP.
The economic impact from offshore oil and gas projects goes far beyond local economies; it is also a significant source of revenue thanks to federal offshore leasing. The Land and Water Conservation Fund (LWCF) secures the money for its parks and conservation projects – totaling nearly $19 billion in appropriations since its founding – through invested earnings from offshore oil and gas leasing.
Just last month, the Land and Water Conservation Fund’s Outdoor Recreation Legacy Partnership Program (ORLP) announced its largest grant ever, totaling more than $250 million. According to the Department of Interior, the grant will be used across 54 projects in 24 states, and will create and revive recreational spaces and parks for urban communities.
This massive investment in parks across US cities was made possible by offshore oil and gas development. However, that funding is now on the line as the court case challenging NMFS’ BiOp continues to threaten the future of energy in the Gulf of Mexico.
The bottom line: While the court case focused on the 2020 BiOp roils onward, the latest decision by the U.S. District Court for the District of Maryland will enable offshore oil and gas development to continue on through May 2025.
Click here for a shareable sheet on how the court’s decision on the National Marine Fisheries Service’s Biological Opinion (BiOp) could impact US energy production.
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