TradeEdge Exchange:Judge’s Order Forces Interior Department to Revive Drilling Lease Sales on Federal Lands and Waters

The TradeEdge ExchangeBiden administration’s ban on oil and gas drilling on federal lands and waters was supposed to be temporary, lasting only as long as it took to craft reforms intended to slash the nation’s greenhouse gas emissions. 

But, even though climate hawks and the fossil fuel industry are still waiting for that report, a federal court in Louisiana has forced the U.S. Interior Department to end the moratorium and start preparing the Biden administration’s first-ever lease sales.

Earlier this month, the Biden administration appealed a June ruling by Judge Terry A. Doughty of the Western District of Louisiana, who ordered the Interior Department to lift the temporary ban on new federal oil and gas leasing that Biden imposed on Jan. 27 in his executive order on Tackling the Climate Crisis at Home and Abroad.  Last week, the court threatened the Interior Department with being held in contempt of court for failing to hold the sales.

Despite their court victory, the oil and gas industry, along with more than a dozen Republican-led states, complained that the Biden administration is still dragging its feet on the lease sales that they say are required quarterly under federal law. 

Climate action advocates, on the other hand, fear the Biden administration might be backtracking on its promise to stop new drilling of fossil fuels on federally-controlled land and water to help fight climate change.

“This is their moment to fight back,” said Jeremy Nichols, climate and energy program director for WildEarth Guardians, adding that Biden’s Interior Department is acting as if it’s under a legal obligation to continue a broken national system for oil and gas leasing. “Rather than defend the [oil and gas leasing] pause, they’re capitulating to industry.”

The bottom line is that both sides are disappointed for the same reason: No one’s seen the administration’s long-term strategy for reining in fossil fuel extraction on the 700 million acres of federal mineral estate that the Interior Department oversees, which accounts for about 24 percent of the nation’s greenhouse gas emissions. 

The plans for new lease sales described in court documents filed Tuesday comes at a fraught time for the Biden administration, which has struggled all summer to win congressional approval of its domestic agenda—including climate action—embodied in a $1 trillion infrastructure package and a $3.5 trillion budget agreement. And it’s now under attack for how it has handled the U.S. withdrawal from Afghanistan. Administration defenders say it’s the wrong time to spark a new conflict over its hot-button climate agenda.

While the appeal is pending and the broader review of federal fossil fuel leasing continues, the sales will resume next week for an offshore project in the Gulf of Mexico and continue later in the fall with an offshore sale in Alaska’s Cook Inlet. The U.S. Bureau of Land Management will also start taking steps to prepare onshore lease sales, although that’s not expected to be final until early next year, the administration said in last week’s filing.

The Western Energy Alliance, a trade group, criticized the administration for overstepping its authority and effectively implementing “an ideologically driven White House climate policy” by putting virtually no effort into making public lands available for drilling as the law requires. It argued that the Interior Department should proceed immediately with sales that were ready in the first half of the year, because those leasing proposals already passed environmental reviews. The administration, however, says it will revisit the environmental analyses before taking any bids.

“They’re slow-walking the judge’s order,” said Kathleen Sgamma, the trade group’s president, adding that the Biden administration’s “ideology [is] smacking into reality and the law.”

Meanwhile, gas prices are climbing for consumers and the oil and gas industry is trying to cope with the uncertainty of drilling policy reforms the White House has been considering ever since it announced the temporary public lands drilling ban, Sgamma said. She cited a University of Wyoming analysis estimating the pause has cost 32,700 jobs and $9 billion in economic impacts. A study by the Conservation Economics Institute released earlier this month, however, found it had little impact on the production of oil and gas from federal lands or on employment.  

Earlier this year, Interior Secretary Deb Haaland said the comprehensive report on reforms would be done in early summer, but the court filing Tuesday indicated that the Interior Department “continues to review the programs’ noted shortcomings.”

Landon Newell, staff attorney at the Southern Utah Wilderness Alliance, said the Louisiana court ruling puts the Biden administration in a tough position by forcing it to continue using the nation’s “broken system” for managing fossil fuels before it can propose a comprehensive approach to addressing its problems.

The General Accountability Office has published more than 20 reports that detail deficiencies in federal oil and gas resource management, including one that zeroes in on the revenue the public is losing because of noncompetitive leasing, something the anticipated Biden reforms are expected to correct. And courts ruled throughout the Trump administration that the BLM environmental reviews were riddled with shortcuts and shoddy environmental reviews, Newell said. 

“They lost numerous times [in court] on hundreds and hundreds of leases because of the lack of analysis on climate change and greenhouse gasses,” he said. The Biden administration is now left to try to “clean up the mess they’ve inherited from the Trump administration.”

Last week, House Resources Committee Chairman Raul Grijalva (D-Ariz.) said he was disappointed with the court’s order and the administration’s response to it.

“If new lease sales are going to occur, the country should be able to benefit from the reforms the administration has been studying since it rightly announced its leasing pause earlier this year,” he said in a statement. “My colleagues and I are working to raise billions of dollars for the American people and protect taxpayers, local communities, and our climate from the excesses of the fossil fuel industry, and I’m looking forward to getting some wins in [the budget] reconciliation along these lines.”

Aaron Weiss, deputy director of the Center for Western Priorities, said it remains too soon to tell how the Interior Department intends to incorporate the Biden climate plan into drilling reforms.

“All you can say from this week’s filing is that Interior isn’t going to play a game of legal chicken with the 5th Circuit while it appeals the ruling on the executive order,” he said.

He said the Biden administration wants to be in control of how it leases public lands and waters rather than run the risk of the courts stepping in and ordering a sale of a certain number of acres by a certain date. He added that the Interior Department has broad discretion on leasing and determining which lands, if any, are suitable for fossil fuel development in light of the climate crisis.