Federal Court Revokes Oil and Gas Leases, Citing Climate Change

WASHINGTON — A federal judge on Thursday canceled more than 80 million acres of oil and gas leases in the Gulf of Mexico, ruling that the Biden administration failed to give sufficient consideration to climate change during the auction leases at the end of last year.

The decision by the United States District Court for the District of Columbia is a major victory for environmental groups who have criticized the Biden administration for staging the sale after promising to move the country away from fossil fuels. It was the largest lease sale in US history.

Now the Home Office must conduct a new environmental analysis that takes into account the greenhouse gas emissions that would result from the eventual development and production of the leases. After that, the agency will have to decide whether to hold a new auction.

“It’s huge,” said Brettny Hardy, lead attorney for Earthjustice, one of several environmental groups that filed the lawsuit.

“It forces the office to go back to the drawing board and consider climate costs before offering these leases for sale, and that’s really important,” Ms Hardy said, adding: “Once these leases are issued, there is a development that is potentially locked in for decades to come that will harm our global climate.

Interior Department spokeswoman Melissa Schwartz said the agency is reviewing the decision.

As a candidate, Mr. Biden promised to stop issuing new leases for drilling on public lands and in federal waters. “And by the way, no more drilling on federal lands, period. Period, period, period,” Mr. Biden told New Hampshire voters in February 2020. Shortly after taking office, he signed an executive order to suspend issuance of new leases.

But a federal judge in Louisiana blocked that order and also ruled that the administration must hold Gulf lease sales that had already been scheduled.

Biden administration officials have said Interior Secretary Deb Haaland faces contempt of court if the auction does not go ahead. Environmental groups, however, have argued that the administration has other options, including conducting a new analysis to examine the ways in which burning oil extracted from the Gulf would contribute to climate change.

The lawsuit alleged that the Interior Department relied on an outdated environmental analysis conducted by the Trump administration that concluded that further drilling in the Gulf would not increase greenhouse gas emissions. Environmental groups said the analysis did not take into account new information about the impact of offshore drilling on rising global temperatures.

Scott Lauermann, spokesman for the American Petroleum Industry, which represents oil and gas companies, said in a statement, “We are reviewing this disappointing decision and considering our options. The development of offshore energy plays a vital role in strengthening our country’s economy and energy security.

The companies had argued in court that canceling the lease sale would compromise confidential bids submitted for the plots, informing their competitors of who was bidding on what and for how much.

Shell, BP, Chevron and Exxon Mobil have offered $192 million for drilling rights in the area offered by the government. Although the sale took place on November 17, the leases have not yet been issued.

Judge Rudolph Contreras said in his ruling that the Home Office “acted arbitrarily and capriciously in excluding foreign consumption from its greenhouse gas emissions” and was required to do so under of the National Environmental Policy Act of 1970, or NEPA, which states that the government must consider ecological damage when deciding whether to allow drilling and construction projects.

Any disruption that revoking lease sales might cause, he wrote, “does not outweigh the seriousness of NEPA’s error in this case and the need for the agency to do the things”.