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US Interior Department appeals court ruling on new oil, gas leasing on federal lands

17 August 2021 Amena Saiyid

The US Department of the Interior (DOI), citing concerns about GHG releases from oil and natural gas operations, decided to appeal a court decision that blocked President Joe Biden from pausing new leasing on federally managed lands and waters

DOI said it is both "important and necessary" to appeal the preliminary injunction the US District Court for the Western District of Louisiana issued in mid-June against the pause Biden ordered.

The pause was imposed to enable the agency to assess GHG contributions from all new oil and gas leases. The court's ruling had the effect of restarting the leasing process, which had been on hold since January.

The department said it would resume the leasing process, adhering to the court's injunction during the appeal, while it continues to review new oil and gas leases in light of what the agency argues are "the program's noted shortcomings," which include a failure to account for climate impacts and protect biodiversity and habitat.

"Together, federal onshore and offshore oil and gas leasing programs are responsible for significant greenhouse gas emissions and growing climate and community impacts. Yet the current programs fail to adequately incorporate consideration of climate impacts into leasing decisions or reflect the social costs of greenhouse gas emissions including, for example, in royalty rates," DOI wrote in a 16 August statement.

Separately from its review of new leases, the department also will undertake a "programmatic analysis" to meet Biden's goal of halving GHGs by 2030 and achieving net-zero emissions by midcentury.

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.

The pause affected new oil and gas leases on federal lands and in federal waters, as well as leading to 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 Mineral Leasing Act.

API-led challenge

DOI's decision to appeal the court's ruling was announced the same day an American Petroleum Institute (API)-led coalition of 11 energy industry trade groups filed a separate challenge to Biden's 27 January executive order on the climate crisis that called for "an indefinite pause" on new oil and gas lease sales.

In a 16 August statement accompanying the lawsuit, API Chief Legal Officer Paul Alfonso said the law is clear that the department must hold lease sales and provide a justification for significant policy changes. "They have yet to meet these requirements in the eight months since instituting a federal leasing pause, which continues to create uncertainty for US natural gas and oil producers," he added.

Although the 16 August lawsuit is aimed at the same "indefinite pause" for new oil and gas leases, API spokeswoman Jessica Szymanski confirmed that it is separate from a 13-state coalition challenge that resulted in the preliminary injunction.

The states' suit argued the Biden-imposed pause violated the United States Constitution and the Administrative Procedures Act (APA), 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 MLA.

The court was persuaded by the states' argument that Biden's pause under the MLA was a final agency action that was reviewable under the APA.

Looming question

The trade groups' lawsuit also argues DOI circumvented congressional intent by halting leases sales indefinitely. Their lawsuit also said the MLA and the OCSLA prohibit an indefinite pause on onshore and offshore lease sales.

According to the API, DOI has provided no timeline or details for resuming lease sales pending its appeal and a looming question remains when those sales would occur and what they would look like.

Meanwhile, the Center for Biological Diversity, which intervened on behalf of DOI in the states' lawsuit, remained hopeful that "the administration's forthcoming analysis, if done correctly, will show what President Biden has already promised. We need to end new federal oil and gas leasing and production to have any chance at a livable planet."

In a 6 August report, the New York University School of Law's Institute for Policy Integrity (IPI) said the federal oil and gas leasing program is in need of much-needed reform because, under previous administrations spanning decades, both the Bureau of Land Management and the Bureau of Ocean Energy Management prepared analyses that did not fully capture the environmental impacts of fossil fuel extraction.

The same study also found that fossil companies have stockpiled thousands of leases, which allows them to maintain control of the land and prevent DOI from setting aside parcels for other uses. Of the 26 million acres currently under lease on federal lands, the IPI said only 12.7 million acres are being used to produce hydrocarbons.

Using GHG emissions data from a 2018 US Geological Survey study, the IPI calculated that fossil fuel extraction—oil and gas as well as coal—and combustion from federal lands in 2014 caused $57 billion in climate damage.

Posted 17 August 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit

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