Court Upholds Order To Expand Oil And Gas Lease Sale In The Gulf Of Mexico

The 5th U.S. Circuit Court of Appeals in New Orleans has upheld a lower court’s order that the U.S. Administration should hold an expanded oil and gas lease sale in the Gulf of Mexico as initially intended but gave the Department of the Interior a few more weeks until November 8 to hold the auction.

At the end of August, the federal government reduced the area to be offered in the upcoming Gulf of Mexico oil and gas lease sale by 9% to safeguard the habitat of a rare whale species.

But the American Petroleum Institute (API), U.S. supermajor Chevron, and the state of Louisiana sued the Biden Administration over the reduced area on offer, with API Senior Vice President and General Counsel Ryan Meyers saying the reduced acreage represented “unjustified actions to further restrict American energy access in the Gulf of Mexico.”

Last week, District Judge James Cain ordered the Department of the Interior to expand the area to be offered for oil and gas leasing in the Gulf of Mexico later this month.

Noting that the Bureau of Ocean Energy Management (BOEM) had failed to justify the last-minute reduction of the area, Judge Cain wrote “The process followed here looks more like a weaponization of the Endangered Species Act than the collaborative, reasoned approach prescribed by the applicable laws and regulations.”

BOEM said on Friday it was seeking an emergency stay of the judge’s order to allow time for a more orderly lease sale process, but has taken measures to comply with the court’s?order and include lease blocks that were previously excluded.

On Monday, a panel of the 5th U.S. Circuit Court of Appeals granted partially the Interior Department’s motion to stay by allowing the lease sale to be held by November 8 instead of on September 27. However, the appeals court upheld the lower court’s order that the blocks excluded last month by the Biden Administration – around 6 million acres in total – should be included in the lease sale.

By Tsvetana Paraskova for Oilprice.com

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