Federal judge orders Biden administration to expand Gulf of Mexico oil auction

Jennifer A. Dlouhy, Bloomberg September 22, 2023

(Bloomberg) – The Biden administration has been ordered by a federal judge to expand its sale of Gulf of Mexico oil leases later this month.

The Louisiana-based judge concluded that the Interior Department probably moved wrongly at “the eleventh hour” to yank roughly 6 million acres off the auction block.

At issue is the department’s decision last month to shrink the territory up for grabs in the Sept. 27 sale and impose traffic limits on vessels in a bid to safeguard the habitat of one of the world’s most endangered whales.

The Interior Department’s Bureau of Ocean Energy Management “failed to justify its pivot,” U.S. District Judge James Cain wrote in a 30-page ruling late Thursday. “The process followed here looks more like a weaponization of the Endangered Species Act than the collaborative, reasoned approach prescribed by the applicable laws and regulations,” he said.

Cain ordered the department to conduct the sale including the previously withdrawn acreage by Sept. 30, a deadline imposed under last year’s climate law.

Louisiana win. The decision is a win for Louisiana, which argued it stood to lose as much as $2.2 million in royalties. Oil industry challengers to the administration’s plan included the American Petroleum Institute, Chevron USA Inc., and Shell Offshore Inc. Chevron had emphasized vessel delays would boost the time and money needed to complete projects in the area.

Ryan Meyers, a Senior Vice President of the American Petroleum Institute, praised the ruling, saying it “hit the brakes on the Biden administration’s ill-conceived effort to restrict American development of reliable, lower-carbon energy in the Gulf of Mexico.”

Environmental group Earthjustice said it’s considering options for appeal. An Interior Department spokeswoman declined to comment.



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