Big Oil and Environmentalists Sue the Government Over Offshore Drilling Plans

The U.S. oil industry and climate activists on Monday filed lawsuits against the federal government challenging its lease sale plans for the Gulf of Mexico.

While Big Oil is attacking the government for curbing the acreage to be made available to drillers, environmentalists are challenging the very existence of those plans.

"Demand for affordable, reliable energy is only growing, yet this administration has used every tool at its disposal to restrict access to vast energy resources in federal waters," said Ryan Meyers, General Counsel for the American Petroleum Institute, which filed the first suit, as quoted by Reuters.

In the other corner are climate activists from Earthjustice filed a suit on behalf of eight environmentalist organizations claiming the lease sale plans have not taken the impact of oil and gas drilling on local coastal communities into adequate consideration.

The Biden administration released its new five-year plan for offshore leases in October, causing outrage in the oil industry because of intentions to hold only three lease sales over the whole period. This would be the lowest number of lease sales over any five-year period since these plans began to be published, back in 1980.

The federal government also tried to stop a lease sale scheduled under the previous five-year plan that was to take place late in 2023. Despite its efforts, the lease sale was conducted, after the oil industry sued the Interior Department and won.

The lease sale attracted $382 million in high bids, which made it the biggest lease sale for the past eight years.

"In issuing a five-year programme with the fewest lease sales in history, the administration is limiting access in a region responsible for generating among the lowest carbon-intensive barrels in the world, putting American consumers at greater risk of relying on foreign sources for our future energy needs,” the API’s Meyers said as quoted by the FT.

On the other hand, “The oil and gas industry is already sitting on 9mn acres of undeveloped leases. They certainly are not entitled to more,” Earthjustice attorney Brettny Hardy told the publication.

By Irina Slav for Oilprice.com

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