A judge on Tuesday cleared the way for the resumption of the sale of oil and gas leases on US public lands, issued an injunction against the Biden administration’s suspension of new projects and dealt a blow to the president’s efforts to wean the country away from fossil fuels.
A Louisiana court has ruled in favor of 13 broadly pro-fossil-fuel states including Texas, Alaska and Oklahoma, and granted a preliminary injunction against The White House has stopped new leases. The decision allows for the rental to appeal while the court hears more arguments in the case.
“Omission of any rationale for the cancellation of rental sales, and in effecting the moratorium, leads to this court ruling that the plaintiff states also have a high probability of success with respect to the merits of this claim,” Judge Terry Doughty said.
Judgment was big setback For Joe Biden, who ordered new leases for fossil fuel development in public land and waters to be suspended in January while a review of the licensing process was underway.
The suspension – which did not affect existing drilling permits – fulfilled an electoral pledge and represented the president’s most significant move against the energy sector yet. campaigned “Switching on Oil”.
The Home Office said it would comply with Tuesday’s decision but would continue to work on the review, which it said would outline next steps and recommendations.
The ministry declined to comment on when the rent auctions will resume.
The comment did not affect activity in private lands, which make up most of the oil and gas production in the United States. Instead, it has been applied exclusively to land and water held by the federal government, which account for about 22 percent of US oil production.
But the judge found that a halt could do significant damage to states where production depends on public lands: “Millions and possibly billions of dollars are at stake,” Doughty wrote. Plaintiffs have an interest in relying on proceeds from onshore and offshore oil and gas lease sales.
The oil industry welcomed the decision. “The halt to federal leasing is bad for our country’s national security, environmental progress and economic recovery,” said Kevin O’Canlin, vice president of exploration and production policy at the American Petroleum Institute, Washington’s powerful lobby group, Kevin O’Canlin. “We are pleased to see the court’s ruling that natural gas and oil leases on federal lands and waters should be appealed.”
The National Oceanic Industries Association, which represents offshore drilling workers in the Gulf of Mexico, also welcomed the decision, which it said “simply confirms legal requirements” for the Department of the Interior to schedule offshore oil and gas sales.
But Tuesday’s ruling is unlikely to be the last word on the matter. The initial injunction will remain in effect until the final decision of the case or appeal to a higher court.
“Victory may be short-lived,” wrote analysts at ClearView Energy Partners, a Washington consultancy. “Not only do we expect the Interior to appeal the ruling, but we also believe that the Biden administration may look to stop the lease via other mechanisms.”
Twice Weekly Bulletin
Energy is the indispensable business of the world and the source of energy is its newsletter. Every Tuesday and Thursday, straight to your inbox, Source Energy brings you essential news, forward-thinking analysis and inner intelligence. Register here.