A federal judge has invalidated the results of an oil and gas lease sale in the Gulf of Mexico, saying the Biden administration failed to properly account for the auction’s climate change impact.
Key points:
- Judge Rudolph Contreras ruled to annul the US government’s sale of 37.4 million offshore hectares
- The sale had generated more than $270 million, drawing bids from major oil companies
- Climate group Earthjustice challenged the sale, arguing the government failed to accurately consider emissions resulting from development of the areas
The decision cast uncertainty over the future of the US federal offshore drilling program, which has been a big source of public revenue for decades but also drawn the ire of activists concerned about its impact on the environment and contribution to global warming.
The Gulf of Mexico accounts for 15 per cent of existing oil production and 5 per cent of dry natural gas output, according to the Energy Information Administration.
In the decision, Judge Rudolph Contreras of the United States District Court of the District of Columbia ruled to vacate the Bureau of Ocean Management’s Lease Sale 257, which offered about 37.4 million offshore hectares in the Gulf of Mexico in an auction last November.
The sale generated more than $US190 million ($270 million), the highest since 2019, on 688,000 hectares sold.
It drew bids from US oil majors including Exxon Mobil Corp and Chevron Corp.
Thursday’s decision came after the environmental group Earthjustice challenged the sale on behalf of four other green groups.
They argued US President Joe Biden’s Interior Department was relying on a years-old environmental analysis that did not accurately consider greenhouse gas emissions that would result from development of the blocks.
Latest science on global warming ‘ignored’
Judge Contreras agreed, faulting the administration for excluding foreign consumption from its greenhouse gas emissions analysis and for ignoring the latest science about the role of oil and gas development on global warming.
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The Interior Department, which oversees federal oil and gas development, said it was reviewing the decision.
Mr Biden campaigned for the White House partially on a pledge to end federal oil and gas drilling in order to fight climate change but efforts to suspend new auctions failed after Gulf Coast states sued.
Congress has mandated that the United States hold regular auctions of public lands for oil and gas development.
“We are pleased that the court invalidated Interior’s illegal lease sale,” said Brettny Hardy, Earthjustice’s senior attorney, in a statement.
It was unclear how the ruling would affect the administration’s plans to offer more than 121,000 hectares of onshore leases to drillers by the end of this quarter.
Like the Gulf sale, those auctions were initiated after a federal judge in June ordered the government to resume oil and gas leasing.
The offshore drilling industry slammed the decision.
“Uncertainty around the future of the US federal offshore leasing program may only strengthen the geopolitical influence of higher-emitting — and adversarial — nations, such as Russia,” National Ocean Industries Association president Erik Milito said in reaction to the ruling.
Scott Lauermann, a spokesman for oil industry lobby group the American Petroleum Institute, said they were “reviewing the decision and “considering our options.”
Reuters
