Biden Administration Halts New Oil And Gas Drilling Permits

The Biden Administration has delayed or stopped work on federal oil and gas leases and permits following a court ruling that struck down the Administration’s “social cost of carbon” metric to account for climate risk when holding lease sales or issuing permits.

Earlier this month, Judge James D. Cain, JR of a Louisiana district court granted a preliminary injunction sought by major fossil fuel-producing states in a lawsuit against the Biden Administration challenging the so-called “social cost of carbon” in rule-making and decision-making regarding lease sales.

As a result of this court ruling, the Administration has stopped or delayed work on leases, grants, permits, and rules so that agencies can assess whether and how they can proceed, the U.S. Justice Department said in a court filing on Saturday. In it, the Administration filed a motion for a stay pending appeal.

“The Court’s injunction not only bars any mandatory obligation imposed by Section 5 of Executive Order 13990 for Defendants to use the Interim Estimates when monetizing the social costs of greenhouse gas emissions in regulatory analysis, but also bars Defendants from exercising their authority to operate independently within the policymaking boundaries set by Congress and to agree with the Working Group’s analysis to the extent the agency deemed appropriate within its statutory authority,” the U.S. Administration said.

The injunction over the “social cost of carbon” interim estimate further complicates the Department of the Interior’s efforts to comply with a separate court ruling. In that ruling by a D.C. court in January 2022, a federal judge threw out the biggest oil and gas lease sale in the Gulf of Mexico on the grounds that the Bureau of Ocean Energy Management broke the environmental law—the National Environmental Policy Act—by failing to properly factor in the emission-related impact of the lease sale.

By Tsvetana Paraskova for Oilprice.com

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