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US court blocks Biden’s pause on oil, gas leasing on federal lands

16 June 2021 Amena Saiyid

A US district court in Louisiana lifted a pause on new oil and natural gas leases on federally managed lands and waters that President Joe Biden imposed via an executive order in January, calling it a violation of several federal laws.

US District Judge Terry Doughty of the Western District of Louisiana issued a preliminary injunction 15 June against the pause contained in Biden's 27 January executive order on the climate crisis while the US Department of Interior (DOI) conducted a review of all new oil and gas leases to assess their contribution to GHGs.

"The agencies could cancel or suspend a lease sale due to problems with that specific lease, but not as to eligible lands for no reason other than to do a comprehensive review pursuant to Executive Order 14008. Although there is certainly nothing wrong with performing a comprehensive review, there is a problem in ignoring acts of Congress while the review is being completed," Doughty wrote in a 44-page opinion.

The ruling will have the effect of restarting the lease process on hold since January. Doughty said the preliminary injunction would remain in effect pending final resolution of the case, which stems from a 13-state coalition of mostly Republican states on 31 March seeking to overturn the pause created by the executive order, "or until further orders from this court, the United States Court of Appeals for the Fifth Circuit, or the United States Supreme Court."

According to DOI, the oil and gas industry currently has leases on more than 26 million acres of federal lands, and more than 12 million acres of public waters.

Victory for oil and gas workers

Louisiana Attorney General Jeff Landry, who spearheaded the coalition's lawsuit, claimed victory "not only for the rule of law, but also for thousands of workers who produce affordable energy for Americans."

"We appreciate that federal courts have recognized President Biden is completely outside his authority in his attempt to shut down oil and gas leases on federal lands," Landry declared in a statement following the court's decision.

The states' suit argued the Biden-imposed pause violated the United States Constitution and the Administrative Procedures Act, which governs federal agency rulemaking. It also said the pause violated two laws that govern oil and gas exploration on public lands and offshore waters—the Outer Continental Shelf Lands Act (OCSLA) and the Mineral Leasing Act (MLA).

Government lacks discretion

The court agreed, overruling the discretion the federal government has in imposing this pause.

"The discretion to pause a lease sale to eligible lands is not within the discretion of the agencies by law under either OSCLA or MLA," Doughty wrote.

He also made it clear that the "pause" in new oil and gas leases on federal lands and in federal waters, as well as the cancellation of Lease Sale 257 in the Gulf of Mexico, the stoppage of Lease Sale 258 in Cook Inlet in Alaska, and the cancellation or postponements of "eligible lands" under the MLA, are final agency actions that are reviewable under the administrative law.

The US Department of Justice said no comment. However, the nonprofit Center for Biological Diversity (CBD), which intervened in the lawsuit on its behalf, was disappointed with the ruling.

"We certainly hope the government will appeal this ruling," Randi Spivak, CBD's program director for public lands, told IHS Markit.

The Biden administration clearly has the authority to pause and review oil and gas leasing on public lands, she said. "This is a deeply dangerous order that heightens the imperative for bold, urgent climate action on our public lands and oceans," she added.

Import more oil

In contrast, the American Petroleum Institute (API) hailed the decision and urged the government to "move expeditiously to follow the court's order and lift the federal leasing pause."

"Now is the time for the administration to put an end to this 'import more oil' policy that threatens American jobs and deprives state and local communities of much-needed revenue, all while likely increasing emissions and the risks of climate change," API Vice President of Upstream Policy Kevin O'Scannlain said in a statement following the court's ruling.

More than 120 state and local chambers of commerce have penned a letter to Biden that states their opposition to the pause on new oil and gas leases due to its impact on local economies and the environment.

"The ban will shift oil and natural gas production overseas, including to nations with less stringent environmental standards. State and local chambers from around the nation representing businesses from Main Street, to the assembly line, are asking the president to reverse course, and we hope he hears this message loud and clear," Martin Durbin, who heads the US Chamber of Commerce's Global Energy Institute and organized submission of the letter to Biden.

Posted 16 June 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit

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