Judge overturns Biden moratorium on new federal oil and gas leasing

June 16, 2021
A federal judge issued a preliminary injunction June 15 requiring the Interior Department to resume leasing of federal onshore and offshore properties for oil and gas exploration.

A federal judge issued a preliminary injunction June 15 requiring the Interior Department to resume leasing of federal onshore and offshore properties for oil and gas exploration.

Interior instituted a moratorium on new leasing pursuant to President Biden’s executive order instructing Interior to establish such a “pause.” The court issued its injunction based on evidence that Interior violated three laws in complying with the order.

The legal challenges, and the court’s analysis of them, avoided challenging a presidential executive order and instead focused on whether Interior violated the Administrative Procedure Act (APA), the Outer Continental Shelf Lands Act (OCSLA), and the Mineral Leasing Act (MLA).

Judge Terry Doughty of the US District Court for the Western District of Louisiana concluded Interior appears to have violated all three laws—the procedural requirements of the APA and the leasing schedules and procedures of OCSLA and MLA.

“By pausing the leasing, the agencies are in effect amending two congressional statutes, OCSLA and MLA, which they do not have the authority to do,” the judge wrote. Nor were the agencies exempt from APA obligations, he wrote.

The ruling could make a difference not only to the states and oil and gas companies but to the geophysical and drilling contractors that do much of the exploration and development work after new leases are sold.

13 states object

The preliminary injunction does not determine the outcome of the case but does involve a judgment that the plaintiffs are likely to succeed on the merits and have adequately alleged economic harm from the moratorium.

Louisiana led 13 states in arguing that Interior and its agencies must go through regulatory rulemaking procedures, including public notice and comment and reasoned explanations, before altering an offshore 5-year lease schedule or the onshore quarterly lease schedule.

The case is Louisiana v. Biden. The states filed their complaint Mar. 24, about 2 months after Biden issued his Executive Order 14008, in which Section 208 commanded Interior to “pause” new oil and gas leases while the department comprehensively reviews its oil and gas policy. Interior has offered no estimate of when the review will be finished.

One of the arguments made by Biden administration attorneys in the case was that there was no point in issuing such an injunction because the government can “come up with another reason” to postpone sales. It remains to be seen whether Interior will follow that strategy.

“We are reviewing the judge’s opinion and will comply with the decision,” an Interior spokesperson told reporters.

Broader policy questions

Critics of the moratorium have contended it does not accomplish anything useful in terms of limiting greenhouse gases and climate change, a subject that Biden, Vice-President Kamala Harris, and Interior officials cite frequently. Oil and gas will be found and produced elsewhere if blocked on US federal property, the critics say.

By the same token, a resumption of lease sales may make no difference for the climate.

Ed Crooks, vice-chair Americas at consultancy Wood Mackenzie, tweeted June 16, “I’ve seen it argued that the court ruling against the federal moratorium on oil & gas lease sales is a significant blow to President Biden’s climate strategy. That seems entirely wrong. To a first approximation, the impact of the moratorium on US greenhouse gas emissions is zero.”

Another twist of the case is that Judge Doughty, a Trump nominee to the federal bench, cited Obama nominees in his reasoning on a few aspects of the case.

Doughty noted that a 2019 ruling by Judge Sharon Gleason, an Obama nominee in the US District Court for the District of Alaska, concluded President Trump could not use an executive order to reverse an order by President Obama reducing to scope of oil and gas drilling in offshore waters. That was in the case of League of Conservation Voters v. Trump.

Doughty also noted that a 2020 ruling by Judge Yvonne Gonzalez Rogers, an Obama nominee in the US District Court or the Northern District of California, concluded that an executive order issued by Trump did not exempt Interior from the APA’s requirement for reasoned decision making. That was in California v. Bernhardt.