After federal appeals court ruling, Gulf lease sales scheduled for Dec. 20

After the 5th Circuit U.S. Court of Appeals' order last week, the Bureau of Ocean Energy Management (BOEM) announced that it scheduled Lease Sale 261 in the Outer Continental Shelf in the Gulf of Mexico for Dec. 20.

In September, a federal judge ruled the Biden administration must go through with offshore lease sales in the Gulf of Mexico by Sept. 27 as originally planned and under original conditions. The Fifth Circuit concurred but amended the ruling, pushing back the lease sale date to Nov. 8.

Last week, the appellate court ruled that the Biden administration must hold the lease sale within 37 days of its ruling on Wednesday. It also ordered BOEM to include 6 million acres in the Gulf that it had previously removed from the sale. Earlier this year, BOEM reached a settlement with environmental groups opposing the sale to purportedly protect an endangered whale species.

BOEM announced, “Pursuant to direction from the Court,” it will “include lease blocks that were previously excluded due to concerns regarding potential impacts to the Rice’s whale population in the Gulf of Mexico. BOEM will also remove portions of a related stipulation meant to address those potential impacts from the lease terms for any leases that may result from Lease Sale 261.”

Environmental groups opposing offshore drilling allege the industry would cause an endangered whale species to go extinct because it only lives in the northern part of the Gulf of Mexico. In 2019, NOAA Fisheries designated the Gulf of Mexico Bryde’s whale as an endangered subspecies under the Endangered Species Act. In 2021, it expanded the designation to include Rice’s whale, which is also protected under the Marine Mammal Protection Act.

The state of Louisiana, American Petroleum Institute and petroleum companies, Chevron and Shell, sued, arguing BOEM’s policies violated federal law.

Louisiana Attorney General Jeff Landry said the rulings were “a major win not only for the rule of law, but also for Louisiana jobs and affordable energy. At a time when working families are being squeezed by unaffordable Bidenomics, I am glad to deliver yet another victory defeating overreaching bureaucrats. … Congress is clear: lease sales must take place; so we are grateful the Judge cut through the noise and upheld the law.”

BOEM issued A Final Notice of Sale for public inspection Friday, Nov. 17, 2023. It will be published in the Federal Register on Monday, Nov. 20, 2023, it said.

The opening of bids will be livestreamed at 9 am CDT on Dec. 20. All terms and conditions of the lease sale are listed online.

The Fifth Circuit’s decision also came after the U.S. Department of Interior issued in September a five-year plan to impose even greater restrictions on federal offshore oil and gas leasing.

LOGA President Mike Moncla said that while the Inflation Reduction Act “promised us anywhere from zero to eleven offshore lease sales,” the Department of the Interior was “only committing to three for the next five years. This will curtail discoveries for years to come.”

“Every other administration prior to this one had Five-Year Plans that enabled uninterrupted leasing activities,” he said. “This action will negatively impact Louisiana jobs and diminish GOMESA funds that are rebuilding our coast. The Gulf of Mexico provides 15% of our nation’s oil. These attempts to slow, or halt offshore production hurts all Americans at the pump and makes us more dependent on foreign oil.”

“As predictable as” the department’s plan is, Moncla said it was “still disappointing to see that the Biden administration’s war on the oil and gas industry rages on” at a time when “worldwide demand for oil and gas is at record levels and our products will continue to be necessary for decades to come.”

The U.S. oil and natural gas industry, led by the Gulf states of Texas and Louisiana, set records in petroleum exports and were the top exporters of liquified natural gas (LNG) in the first half of 2023. This is after the U.S. became the world’s largest LNG exporter in the first half of 2022, led by the two Gulf states, the EIA previously reported.