API taking action against Gulf of Mexico oil & gas lease sale ruling

The American Petroleum Institute (API), a trade association representing the oil and gas industry, has decided to appeal a ruling by a U.S. judge, which invalidated the results of the Biden administration’s first oil and gas lease sale for acreage in federal waters in the Gulf of Mexico.

The Gulf of Mexico Lease Sale 257 – the first oil and gas lease sale under the Biden administration – generated $191,688,984 in high bids last year for 308 tracts covering 1.7 million acres in federal waters of the Gulf of Mexico.

After Judge Rudolph Contreras of the U.S. District Court of the District of Columbia invalidated the results of this offshore oil and gas lease sale on the grounds of failure to properly account for the lease sale’s climate change impact, environmental groups hailed this decision as a pivotal victory in the fight to defend Gulf communities and the planet from the worsening climate crisis.

However, the oil and gas industry was disappointed with the decision.

In light of this, the American Petroleum Institute filed a notice of appeal on Tuesday with the U.S. Court of Appeals for the D.C. Circuit of the decision by the D.C. District Court invalidating the results of the only federal lease sale for natural gas and oil held in 2021.

Frank Macchiarola, API Senior Vice President for Policy, Economics and Regulatory Affairs, explained: “Today we’re taking action to preserve American energy leadership and ensure that development in the Gulf of Mexico can continue to play a critical role in meeting the nation’s energy needs, while generating billions in revenue for critical conservation programs.”

Furthermore, API confirmed that an Obama-era report analyzing the effects of offshore leasing restrictions had found that U.S. greenhouse gas emissions would be little affected and could increase slightly if foreign imports increased in the absence of new U.S. offshore leasing and production.

In addition, the report cites foreign energy sources would substitute for reduced American offshore supply, and that increased production and subsequent transport of foreign oil would lead to higher GHG emissions than energy produced in the United States.

“At a time of rising energy costs and heightened geopolitical tensions, the misguided decision to cancel the only lease sale held last year is contributing to significant uncertainty for U.S. natural gas and oil producers and limiting access to the affordable, reliable energy that’s needed here in the U.S. and around the world,” added Macchiarola.

“We call on the Department of Interior to join us in this effort and appeal the court’s ruling, which overlooked the comprehensive environmental analysis that the Bureau of Ocean and Energy Management conducted as part of the NEPA process prior to the lease sale, including careful consideration of the emissions impacts of reasonable alternatives,” concluded Macchiarola.