U.S. judge quashes Gulf of Mexico oil & gas lease sale due to climate impact

U.S. judge has invalidated the results of an offshore oil and gas lease sale for acreage in the Gulf of Mexico held by the Biden administration late last year on the grounds of failure to properly account for the lease sale’s climate change impact.

Environmental groups hailed the decision as a pivotal victory in the fight to defend Gulf communities and the planet from the worsening climate crisis.

Held in November 2021, Lease Sale 257 was the largest offshore oil and gas lease sale in U.S. history, offering 80.8 million acres in the Gulf of Mexico for leasing. It generated over $191 million in high bids for 308 tracts covering 1.7 million acres. A total of 33 companies participated in the lease sale.

The lease sale was challenged by environmental group Earthjustice on behalf of Healthy Gulf, Center for Biological Diversity, Sierra Club, and Friends of the Earth, alleging that the federal defendants violated the National Environmental Policy Act (NEPA) and the Administrative Procedure Act (APA). The lawsuit argued that the 2017 environmental analysis that the Biden administration relied on to hold the sale is “fatally flawed.”

“The sale was not only counter to the administration’s pledge to reduce carbon emissions by 50 per cent to 52 per cent by 2030 and meet our climate commitments, but it is illegal and based on previously debunked environmental analysis,” Earthjustice said.

In the decision, Judge Rudolph Contreras of the U.S. District Court of the District of Columbia vacated and remanded the Bureau of Ocean Energy Management’s lease sale 257. The court believes that BOEM acted arbitrarily in excluding foreign consumption from its emissions analysis.

According to the environmentalists, the court held that the Interior Department failed to accurately disclose and consider the greenhouse gas emissions that would result from the lease sale, violating a bedrock environmental law.

Interior must now conduct a new environmental analysis that accounts for the greenhouse gas emissions that would result from the development and production of the leases. After that, the agency will have to decide whether it will hold a new auction.

Responding to the court’s decision, the environmental groups said the decision holds the Interior accountable for grossly underestimating the climate impacts and risks to Gulf communities before deciding to hold the largest oil and gas lease sale in U.S. history. This ruling ensures that waters and coasts will be protected from additional harmful drilling and eventual spills in the Gulf, where the fossil fuel industry is already sitting on 8 million acres of leases on public waters.

Earthjustice’s senior attorney, Brettny Hardy, stated: “We simply cannot continue to make investments in the fossil fuel industry to the peril of our communities and increasingly warming planet. This administration must meet this critical moment and honour the campaign promises President Biden made by stopping offshore leasing once and for all.”

Cynthia Sarthou, executive director of Healthy Gulf, commented: “Today, we can look forward to the day when we stop selling off our public waters for pennies on the dollar when a just transition to a clean energy future is critical to our very survival. Now, the Gulf can be seen as a viable field for offshore wind energy that will power our future.”

Hallie Templeton, legal director at Friends of the Earth, emphasised that the court’s decision is victorious, but the fight is not over yet. Templeton also noted that the groups would continue to hold the Biden administration accountable for making “unlawful decisions” that contradict its pledge to take urgent action on climate change.

Meanwhile, the oil and gas industry is disappointed with the decision. As reported by Reuters, National Ocean Industries Association (NOIA) President, Erik Milito, said the uncertainty around the future of offshore drilling in the U.S. waters might only strengthen the geopolitical influence of higher emitting – and adversarial – nations, such as Russia.

Oceana, a non-profit ocean conservation organization, applauded the ruling. Campaign director, Diane Hoskins, commented: “Offshore oil drilling is dirty and dangerous, and as a federal judge found yesterday, the Department of the Interior has underestimated the effect of offshore drilling on climate. Where they drill, they spill, and oil spills devastate local communities and shut down tourism along our coasts, and climate change associated with offshore drilling continues to harm our environment and contribute to rising sea levels.”

Hoskins added: “Expanded offshore drilling from new lease sales stands in direct contrast to serious action addressing the climate crisis. As a candidate, President Biden committed to ending new offshore drilling and as president, he made bold international commitments to reducing U.S. greenhouse gas emissions. With this ruling, there’s a lot of reason to be hopeful that President Biden can ensure we’re not expanding dirty and dangerous offshore drilling. The future of our climate and our oceans depends on his action.”