US puts Gulf of Mexico oil & gas lease sale on ice following court order

The U.S. Bureau of Ocean Energy Management (BOEM) has postponed the next offshore oil and gas lease sale for acreage in the Gulf of Mexico (GOM) to comply with a court order. A revised final notice of sale is expected to be issued in the coming days.

After BOEM’s final notice to hold Lease Sale 261 for acreage in the Gulf of Mexico in September 2023, the American Petroleum Institute (API) filed a motion for preliminary injunction in the U.S. District Court Western District of Louisiana, seeking immediate action from the court ahead of the planned lease sale as more than 6 million acres were removed from it.

The Interior Department announced in August 2023 that the offshore oil and gas sale would include 67.3 million acres of the Gulf of Mexico for auction and determined that the sale would exclude about 6 million acres of important habitat for the Rice’s whale, attaching a stipulation that restricts vessel speeds and transit to protect the whale from deadly vessel strikes.

This came as a result of a recent interim agreement that Earthjustice, Sierra Club, Center for Biological Diversity, Friends of the Earth, Turtle Island Restoration Network, and the federal government reached in the U.S. District Court in Maryland.

Responding to the injunction request from the American Petroleum Institute, Chevron, Shell, and Louisiana, the court found that the Interior Department had not provided adequate notice of the provisions for additional protections for the Rice’s whale. The district court also found that Interior had failed to justify the need for these measures.

Following a court order from September 21, 2023, the United States decided to seek an emergency stay of the order to allow time for a more orderly lease sale process. In the case such relief was not granted, Lease Sale 261 was expected to be conducted on September 27, 2023.

In addition, environmental groups also appealed the court order granting a preliminary injunction request by the American Petroleum Institute, Chevron, Shell, and the State of Louisiana to remove protections for the Rice’s whale included in Lease Sale 261. This was done to seek an emergency stay of the order.

Kristen Monsell, oceans legal director at the Center for Biological Diversity, commented: “The oil and gas industry’s greed is astounding, and I’m heartbroken that oil executives won’t make even minor accommodations to protect a whale from going extinct.

“The federal government is offering oil and gas companies more than 67 million additional acres of public waters for drilling, and it’s still not enough to satisfy Big Oil. The Gulf doesn’t belong to the industry. It belongs to the people and wildlife living there, and it’s time to start saying no to harmful drilling activities.”

The Bureau of Ocean Energy Management has now confirmed that Lease Sale 261 will not be held on September 27, 2023, as originally planned, thanks to the United States Court of Appeals for the Fifth Circuit’s ruling on September 25, 2023.

In accordance with the court’s order, BOEM will include lease blocks that were previously excluded due to concerns regarding potential impacts to the Rice’s whale distribution in the Gulf of Mexico. Additionally, portions of a related stipulation meant to address potential impacts to Rice’s whale will be removed from the lease terms for the leases that may be issued as a result of this lease sale.

While a new date for Lease Sale 261 has not been set yet, BOEM plans to hold it no later than November 8, 2023, to comply with the Appeals Court ruling.