Federal court rejects proposed Gulf of Mexico lease sale

A federal court has rejected a plan to lease millions of acres in the Gulf of Mexico for offshore oil drilling, saying the Biden administration did not adequately take into account the lease sale's effect on greenhouse gas emissions, violating a bedrock environmental law.

The proposed lease sale is headed for the Interior Department, according to the decision by U.S. District Judge Rudolph Contreras in Washington. The judge said it was up to Interior to decide whether or not to proceed with the sale after a revised review, scrap it or take other steps.

Environmental groups said the ruling gave President Joe Biden a chance to follow through on his campaign to stop offshore leasing in federal waters. The decision was made on the one-year anniversary of a federal leasing moratorium ordered by Biden as part of his efforts to combat climate change.

Brettny Hardy, a senior attorney for Earthjustice, said that the court invalidated Interior's illegal lease sale.

Hardy said that this administration must meet this critical moment and honor the campaign promises President Biden made by stopping offshore leasing once and for all. We can't continue to invest in the fossil fuel industry in the peril of our communities and warming planet. The agency is reviewing the decision, according to a spokeswoman for Interior Secretary Deb Haaland.

In November, Shell, Shell RDS.A, BP BP, Chevron CVX and ExxonMobil XOM offered a combined $192 million for drilling rights on federal oil and gas reserves in the Gulf of Mexico.

The Interior Department auction came after attorneys general from Republican states led by Louisiana challenged a suspension on sales that Biden imposed when he took office.

There were more than 2,700 square miles of bids on 308 tracts. Since Gulf-wide bidding resumed in 2017, it was the largest acreage and second-highest bid total.

Biden tried to cajole other world leaders into bolstering efforts against global warming, including at the UN climate talks in Scotland in early November. Biden has taken a number of actions on climate change, but he has faced resistance in Congress and a $2 trillion social and environmental spending package is stalled. The Build Back Better plan contains $550 billion in spending and tax credits that are aimed at promoting clean energy.

Contreras said Interior did not consider the greenhouse gas emissions that would result from the lease sale and was in violation of the National Environmental Policy Act, a bedrock environmental law.

He said that barreling full-steam ahead with blinders was simply not a reasonable action for BOEM to have taken here, referring to Interior's Bureau of Ocean Energy Management.

Under former President Donald Trump and affirmed under Biden, environmental checks of the lease auction resulted in fewer emissions and burning more oil and gas from the Gulf.

Similar claims in two other cases, in Alaska, were rejected by federal courts after challenges from environmentalists.

Federal officials have changed their emissions modeling methods but they said it was too late to use that approach for the November auction.

The National Ocean Industries Association, which represents the offshore industry, slammed the ruling and said that U.S. oil and gas production was crucial to curbing inflation and strengthening national security.

The U.S. offshore region is vital to American energy security, and continued leases are essential in keeping energy flowing from this strategic national asset, said Erik Milito, the group's president. He said there was no certainty about the future of the U.S. federal offshore leasing program, which would benefit Russia and other adversaries.

The administration has proposed another round of oil and gas sales in Wyoming, Colorado, Montana and other states. The Interior Department officials continued, despite the fact that burning the fuels could lead to billions of dollars in potential future climate damage.

The U.S. greenhouse gas emissions from burning and extracting fossil fuels from public lands and waters account for about a quarter of U.S. carbon dioxide emissions, according to the U.S. Geological Survey.