June 21, 2021
There’s a new development in the oil and gas industry. Although U.S. President Biden indefinitely halted any new oil and gas leasing within federal grounds and waterways by executive order, U.S. Judge Terry Doughty of the U.S. District Court for the Western District of Louisiana has sided with fourteen states countering his decision. In the lawsuit filed in Louisiana’s federal court, these states allege the Mineral Leasing Act has been violated.
This Act requires quarterly lease sales, which could not take place with the executive order in place. The decision from the judge remains in effect until the case is resolved or there are orders from a higher court and applies to leasing both on and offshore nationwide.
The judge’s ruling grants a preliminary injunction to Louisiana and the other states suing President Biden and the Interior Department over the freeze on new federal drilling auctions. In the ruling, the judge concluded the states in the petition met all requirements needed to establish they would incur financial damages with ‘millions and possibly billions of dollars at stake if the pause on new oil and gas leases continued. The judge also indicated that the states had a ‘substantial likelihood of success by moving forward with the lawsuit.
The Interior Department indicates it will comply with the ruling but has no set time for auctions to resume. There are differing opinions on both sides, with The Center for Biological Diversity environmental group against the order, while the American Petroleum Institute, known as the top oil and gas trade group in the nation, wants to move quickly to lift the pause.
The Interior Department was set to release a review of the federal oil leasing program in a few days. The report will still be released and should “include initial findings on the state of the federal conventional energy programs, as well as outline next steps and recommendations for the Department and Congress to improve stewardship of public lands and waters, create jobs, and build a just and equitable energy future,” according to a spokesperson of the department.