Feds to hold first oil-and-gas land lease sale after Biden’s court loss

Louisiana Attorney General Jeff Landry had sued to overturn a federal moratorium in June and won a favorable ruling.
The plunge in U.S. crude oil prices this week reverberated across global financial markets.
The plunge in U.S. crude oil prices this week reverberated across global financial markets.
Getty Images

The Biden administration will hold its first oil-and-gas land lease sale Wednesday morning after Louisiana Attorney General Jeff Landry sued to overturn a federal moratorium in June.

The Bureau of Ocean Energy Management (BOEM), an agency within the U.S. Department of the Interior, will livestream Lease Sale 257 from New Orleans. The sale will include about 15,135 unleased blocks of public land located 3 to 231 miles offshore in the Gulf of Mexico.

The event marks a significant victory for oil-and-gas companies, as well as states opposing the administration’s leasing ban.

President Joe Biden issued an executive order upon taking office that halted new leases for oil and gas drilling and fracking on federal lands and waters for 60 days. Biden then extended the ban for one year.

Landry led a coalition of 13 states in suing the administration, saying the agencies tasked with enforcing the order “rushed to halt long-planned lease sales using an opaque and nonpublic process.”

Landry also claimed the federal land lease system already was “one of the most stringent and detailed regulatory frameworks in the world.”

U.S. District Judge Terry Doughty agreed and temporarily reversed the moratorium while litigation remains in progress. Wednesday’s BOEM sale will occur despite the administration’s appeal of Doughty’s June 15 district court ruling in the Western District of Louisiana.

“This lease sale is an important victory, not only for the 250,000+ oil and gas workers in the state but for every American who is facing high energy costs as a result of our diminished oil and gas supply,” Louisiana Oil & Gas Association President Mike Moncla said in a statement.

“We look forward to working with Attorney General Landry as we continue our opposition to the Biden administration’s failed energy policies that undermine our nation's recovery from the COVID-19 pandemic,” Moncla said.

The moratorium was an intended climate change measure pursuant to the president’s desire to “transition” away from oil.

“The United States and the world face a profound climate crisis. We have a narrow moment to pursue action at home and abroad in order to avoid the most catastrophic impacts of that crisis and to seize the opportunity that tackling climate change presents,” Biden's Jan. 27 executive order read.

The U.S. Department of Justice is appealing the district court ruling, known as Louisiana v. Biden, in the Fifth U.S. Circuit Court of Appeals in New Orleans.

“The appeal of the preliminary injunction is important and necessary,” a statement from the Interior Department said. “Together, federal onshore and offshore oil and gas leasing programs are responsible for significant greenhouse gas emissions and growing climate and community impacts. Yet the current programs fail to adequately incorporate consideration of climate impacts into leasing decisions or reflect the social costs of greenhouse gas emissions including, for example, in royalty rates.”

Gasoline and home heating prices have soared in the interim, leading Biden to call on foreign oil producers, particularly OPEC+ countries, to increase production amid the administration’s restrictions on domestic production.

American Petroleum Institute President and CEO Mike Sommers warned of increased energy costs and inflation if the restrictions continue.

“Gasoline and other energy costs are a key pressure point for household budgets,” Sommers said Oct. 28 during a U.S. House Oversight Committee meeting. “Inadequate energy supplies [could] further strain individual households, erode consumers’ broader purchasing power, and threaten jobs as well as the broader economic recovery, contributing to inflationary pressure. Pain at the pump hurts American consumers.”

Wednesday’s lease sale will be the first of the Biden administration and the eighth offshore sale under the 2017-2022 Outer Continental Shelf (OCS) Oil and Gas Leasing Program.