Chevron, API, State of Louisiana challenge Biden’s “unjust” offshore leasing restrictions

WASHINGTON, August 24, 2023 – The American Petroleum Institute (API) joined with the State of Louisiana and Chevron U.S.A. Inc. in filing a challenge to the Department of the Interior (DOI) Bureau of Ocean Management’s (BOEM) Final Notice of Sale for Lease Sale 261. The challenge follows BOEM’s announcement to hold the final offshore lease sale mandated by the Inflation Reduction Act, but with significantly reduced acreage and severe restrictions on oil and natural gas vessel traffic.

“We’re taking steps to challenge the Department of the Interior’s unjustified actions to further restrict American energy access in the Gulf of Mexico,” said API Senior Vice President and General Counsel Ryan Meyers. “Despite Congress’ clear intention in the Inflation Reduction Act, the Biden administration has announced a ‘lease sale in name only’ that removes approximately 6 million acres of the Gulf of Mexico from the sale and adds new and unjustified restrictions on oil and natural gas vessels operating in this area, ignoring all other vessel traffic. Together with the State of Louisiana and Chevron U.S.A. Inc., we intend to use every legal tool at our disposal to challenge these actions.”

For 45 years, the Interior Department has been required to prepare a five-year offshore leasing program that will best meet America’s energy needs for the ensuing five-year period, detailing a schedule for regular oil and natural gas lease sales, including in the Gulf of Mexico.

It has been more than one year since the Department of the Interior allowed the five-year program for federal offshore oil and natural gas leasing to lapse with no immediate replacement.

The U.S. Gulf of Mexico produces some of the lowest carbon intensity barrels in the world. Constrained production in this basin could be replaced by higher carbon intensity barrels from elsewhere in the world.

According to the U.S. EIA, Gulf of Mexico federal offshore oil production accounts for 15% of total U.S. crude oil production and federal offshore natural gas production in the Gulf accounts for 5% of total U.S. dry production.

An agreement announced last month proposed operating “recommendations” that would impose significant burdens on operators and increase emissions from vessels forced to operate at suboptimal speeds or idle outside the restriction areas. 

Adopting the nighttime and low visibility restrictions could cut transit windows to approximately 50%– requiring industry to balance the government’s recommended practices against safely and efficiently servicing ongoing operations.

These restrictions would unfairly single out oil and gas traffic in an area that is one of the most used maritime areas in U.S. waters by a variety of industries. Thousands of vessels pass through this area every day.