In a legal setback for fossil fuel advocates, a federal court has invalidated a large offshore oil and gas lease sale in the Gulf of Mexico, ruling Thursday in favor of environmental groups that sued to block the lease after it was scheduled for auction in 2023.
U.S. District Court Judge Amit Mehta, an Obama appointee in the District of Columbia, found unlawful a 73-million acre offshore oil and gas lease sale, one of the largest in history, that the Interior Department held in March 2023. Oil and gas leases are contracts in which private companies rent tracts of federal land or water from the government usually for the purposes of drilling or extracting raw materials.
The court ruled in favor of groups that had sued the Interior Department, finding that the agency failed to adequately consider the potential harms of climate changing emissions from fossil fuel production arising out of the lease as well as the impact to the nearly- extinct Rice’s whale, which lives exclusively in the Gulf of Mexico. The most recent scientific survey in 2017-18 estimated that only about 50 of the endangered whales are still alive, according to the National Oceanic and Atmospheric Administration.
The judge ordered additional briefing from the parties regarding what remedies the court should impose.
The Interior Department, through the Bureau of Ocean Energy Management under the Biden administration, had previously canceled the lease sale nearly three years ago. However, U.S. Sen. Joe Manchin, a centrist Democrat from West Virginia, inserted a provision into the Inflation Reduction Act that forced the Interior Department to resurrect the sales along with two others that were similarly canceled. Separate litigation remains ongoing to decide the fate of the two other sales, one in the Gulf of Mexico and the other in Alaska’s Arctic National Wildlife Refuge (ANWR).
The next Gulf oil and gas lease is scheduled for auction in 2025, and two others are proposed to take place over the next five years. After leases are sold, it typically takes many years before platforms and other infrastructure are built and drilling begins.
For various reasons, some companies purchase leases and don’t use them at all. Hundreds of oil and gas leases currently sit idle as fuel prices have been relatively stable for several years on the global energy market. The last oil and gas lease auction in ANWR this year drew no bids.
