Biden administration again delays offshore oil, gas lease sale

Nov. 2, 2023
The Biden administration will delay oil and gas Lease Sale 261 for Gulf of Mexico tracts until an appeals court rules on a legal fight over changes to the sale terms and a federal district court’s determination that the changes appeared to violate laws.

The Biden administration announced Nov. 2 it will delay oil and gas Lease Sale 261 for tracts in the Gulf of Mexico until an appeals court rules on a legal fight over changes to the sale terms and a federal district court’s determination that the changes appeared to violate two laws.

The changes, unveiled in late August, were to prevent possible harm to the Rice’s whale, an endangered species, according to the Bureau of Ocean Energy Management (BOEM). The US Court of Appeals for the Fifth Circuit ruled Oct. 26 that the district court’s preliminary injunction against those changes is stayed, and the appellate court scheduled oral arguments on the subject for Nov. 13.

That left the possibility that BOEM could go ahead with the sale by Nov. 8, but the agency has decided it will not.

“Until the court rules, BOEM cannot be certain of which areas or stipulations may be included in the sale notice,” the agency said Nov. 2. “Potential bidders in Lease Sale 261 should not submit bids until BOEM provides additional instruction. BOEM will hold any bids already received and will hold the sale after it receives further direction from the court of appeals.”

BOEM had intended to hold the sale Sept. 27, but the agency changed the terms of the sale in late August after the Biden administration struck a deal with environmental groups in a court fight over protecting an endangered species, the Rice’s whale. The changes took 6 million acres of highly prospective tracts out of the sale and added very sharp speed limits for ships involved in oil and gas work.

A federal district court issued a preliminary injunction Sept. 21 preventing the late changes on grounds that they likely violated the procedural requirements of the Outer Continental Shelf Lands Act and the Administrative Procedure Act (OGJ Online, Sept. 22, 2023).

A 2022 law mandated that the sale be held no later than Sept. 30.

The case is Louisiana v. Deb Haaland. The state of Louisiana is joined by the American Petroleum Institute (API) and Chevron Corp. A parallel lawsuit consolidated with the lead case was filed by Shell Offshore Inc. Environmental groups are participating in support of the Biden administration.

Critics question justification

Sen. Joe Manchin (D-W.Va.) expressed frustration with the BOEM decision and suggested it stemmed from political or ideological reasons rather than law.

“BOEM is once again blaming the courts for delaying the sale, but the delays are entirely the administration’s fault,” Manchin said. “The Department of the Interior was so eager to meet the demands of environmental groups to restrict the sale that it bypassed important legal requirements leading to this litigation.”

BOEM’s attempt to place a 10-knot speed limit and other restrictions on oil and gas ships in a broad stretch of the Gulf of Mexico was arrived at in consultation with the National Marine Fisheries Service, a part of the National Oceanic and Atmospheric Administration (NOAA) within the Commerce Department. Industry representatives asked what sense it made to impose restrictions on only one category of the many kinds of ships transiting the gulf.

API issued a Nov. 2 statement reinforcing that point by noting that NOAA just denied a petition for such restrictions in the northeastern Gulf of Mexico.

“NOAA recently denied the petition for rulemaking to impose speed limits on all vessels operating in the Rice’s whale core habitat area in the Gulf of Mexico,” API said, referring to a denial issued Oct. 27 in response to a petition from environmental groups.

“NOAA concluded that there were a series of actions needed, including conservation tasks, drafting a species recovery plan, and conducting a quantitative vessel risk assessment before NOAA would even consider a rulemaking on the vessel restrictions,” API said. “Interior conducted none of these actions in their attempt to target oil and gas vessels.”

That also galled Erik Milito, president of the National Ocean Industries Association.

“There are zero legal or operational constraints preventing Interior from proceeding with the lease sale,” Milito said. “Moreover, there is no reason BOEM should consider withdrawal of acreage or additional restrictions when NOAA, the ‘science-based’ agency within Commerce, has just announced it needs to take additional steps before any decisions like these can be made.”

The known core habitat of the Rice’s whale is in the northeastern Gulf of Mexico outside the active oil and gas leasing areas of the central and western gulf. Confirmed sightings of the whale species have been common in the northeast and almost completely absent elsewhere. NOAA has noted a single academic study that asserts, based on acoustic recordings, that the whales also occupy a wide band stretching across the central and western gulf. That assertion stands in contrast to the dearth of confirmed sightings in such an expanded area.