Gulf of Mexico oil, gas lease sale may be delayed again pending appeal decision

The US Court of Appeals for the Fifth Circuit has indefinitely blocked a lower court’s injunction for oil and gas Lease Sale 261 while the appellate court considers an appeal of the dispute over “11th hour” changes to the Gulf of Mexico offshore sale plan.

The Interior Department’s Bureau of Ocean Energy Management (BOEM) had intended to hold the sale Sept. 27, but it changed the terms of the sale in late August after the Biden administration struck a deal with environmental groups in a court fight over protecting an endangered species, the Rice’s whale. The changes took 6 million acres of highly prospective tracts out of the sale and added shipping restrictions for new leases.

A federal district court issued a preliminary injunction Sept. 21 preventing the late changes on grounds that they likely violated the procedural requirements of the Outer Continental Shelf Lands Act and the Administrative Procedure Act (OGJ Online, Sept. 22, 2023).

The Biden administration, with support from environmental groups, appealed, and the Fifth Circuit delayed the sale to Nov. 8. Then the appellate court Oct. 26 issued an order saying only that the preliminary injunction “is stayed pending the merits panel’s decision on appeal.” That leaves uncertain what BOEM will do—hold the sale Nov. 8 as industry wants, or delay it with the intention of imposing the restrictions for the whales.

Oral arguments at the Fifth Circuit were scheduled for Nov. 13 in New Orleans. How long a panel of judges will take to reach a decision is an open question.

The case is Louisiana v. Deb Haaland. The state of Louisiana joined the American Petroleum Institute and Chevron Corp. in filing the lawsuit. A parallel suit, by Shell Offshore Inc., is consolidated with the lead case.

Frustrated senators

A Senate committee hearing Oct. 26 aired the frustration of some lawmakers with BOEM over not only Lease Sale 261 but the imminent final version of another 5-year program for offshore oil and gas leasing, a plan to offer only three offshore lease sales.

Several senators argued that the Biden administration’s policy of raising higher barriers to US domestic oil and gas production defeats whatever environmental goal the administration might have. It means not less use of fossil fuels but more oil sales from Russia, Iran, and other countries rather than US production, they said. The lawmakers especially noted the suspension of sanctions on Venezuela (OGJ Online, Oct. 19, 2023).

“The path this administration is on makes no sense to me at all,” Sen. Joe Manchin (D-W.Va.), chairman of the committee, said. Similar remarks were made by Sen. John Barrasso (R-Wyo.) and a visibly angry Sen. Lisa Murkowski (R-Alas.), who called for oil and gas employment to be supported domestically rather than overseas.

BOEM Director Elizabeth Klein made it clear in her testimony that “the transition to clean energy is something that this administration is very focused on.”

Sen. Bill Cassidy (R-La.) zeroed in on the decision of BOEM, in consultation with the National Marine Fisheries Service, to remove a large extended area—reaching across the western and central parts of the Gulf of Mexico—from Lease Sale 261 to protect Rice’s whales. The record shows only one confirmed sighting of a Rice’s whale in the central and western parts of the gulf during the 17 years 2003-2019, he said.

Witness Janet Coit, the National Oceanic and Atmospheric Administration assistant administrator for the fisheries service, did not dispute that record. Instead, she insisted acoustic recordings of whale sounds show that Rice’s whales are in the western Gulf of Mexico 12 months of the year. She said Rice’s whales have a distinctive identifiable call.

Coit offered no explanation for why confirmed sightings of Rice’s whales are well established in the eastern gulf but lacking in the western gulf, if in fact the species is in the western gulf every month of the year. The fisheries service appears to be relying on one study of acoustic recordings, despite the contradictory data of sightings.

Editor's Note: This article has been updated to reflect that the appellate court issued an indefinite stay of the lower court's preliminary injunction, and that may delay the lease sale past Nov. 8, but it will not necessarily delay the lease sale.