Biden plans September restart of oil leases, per court ruling

WASHINGTON (Bloomberg) --The Biden administration moved Tuesday to resume selling oil and gas drilling rights in the Gulf of Mexico and throughout the western U.S., after a judge ruled the president’s leasing pause was unlawful.

The Interior Department said it planned to issue a formal notice in September to reschedule a Gulf lease auction and would take steps toward selling onshore tracts. The plan, announced in an emailed statement, marks the first public step to restart leasing since President Joe Biden ordered the halt on Jan. 27 and a federal district judge ruled against the moratorium in June.

The announcements came on the same day the Justice Department was required to explain to the court how it was complying with the ruling, or risk being held in contempt. Oil industry allies have accused the administration of defying the June 15 order and dragging its feet in rescheduling auctions.

The decision is a blow to environmental activists who have pressed Biden to permanently block oil and gas leasing on federal lands and waters, having argued a warming world can’t afford to burn the fossil fuels they contain. But Interior’s announcement didn’t assuage oil industry allies who accused the agency of slow-walking sales.

Biden ordered the moratorium in January to allow the Interior Department to conduct a “comprehensive review” of its leasing program, including its effect on climate change. Now, the department is embarking on a formal analysis of oil, gas and coal leasing programs, while the administration appeals U.S. District Court Judge Terry Doughty’s injunction.

The agency says the analysis is critical to address what changes “may be necessary to meet the president’s targets of cutting greenhouse gas emissions in half by 2030 and achieving net zero greenhouse gas emissions by 2050.”

The lease sales set to be rescheduled include an auction of tracts in the Gulf of Mexico that was originally planned for March. It was one of three remaining Gulf auctions slated to occur this year and next under a leasing program originally designed by the Obama administration.

Interior’s Bureau of Ocean Energy Management also will seek public comment on an environmental review of an auction of tracts in Alaska’s Cook Inlet.

And the Bureau of Land Management will outline potential parcels for sale in the western U.S. by the end of August, the Interior Department said. After a public comment and review period, the bureau would then conduct environmental reviews of those potential tracts for sale and announce auctions later this year.

Still, the announcements fall short of what oil industry advocates have said are needed to comply with federal law. The publication of onshore sale notices in December sets the stage for auctions in January of February. But the U.S. Mineral Leasing Act requires quarterly sales, said Kathleen Sgamma, president of the Western Energy Alliance.

“Announcing yet more analysis of lease parcels without scheduling the actual sales this year complies with neither the letter of the law nor the spirit of the judge’s order overturning the leasing ban,” Sgamma said in an emailed statement.

Additional environmental analysis amounts to “stalling tactics,” Sgamma said. “The environmental analysis was already completed for parcels that were ready to go to auction at the beginning of the year before the unlawful leasing ban was announced,” so “there is no need to redo that analysis.”

In a legal filing Tuesday, the administration argued that the Interior Department was complying with the judge’s decision and had already “expended significant agency resources, including many hundreds of employee-hours, preparing to hold oil and gas lease sales.”

The Bureau of Ocean Energy Management “has devoted significant effort” in preparing a formal new record of decision on the Gulf lease sale, including “preparing possible new lease stipulations, evaluating potential sale areas” and revising other documents, the Justice Department told the court.

That suggests future lease sales may be much smaller than anticipated earlier this year under plans previously advanced by the Trump administration.