API files preliminary injunction in offshore Lease Sale 261 challenge

WASHINGTON, August 29, 2023 – The American Petroleum Institute (API) issued the following statement from Senior Vice President and General Counsel Ryan Meyers on API’s motion for preliminary injunction filed in the U.S. District Court Western District of Louisiana seeking immediate action from the court ahead of the planned Lease Sale 261:

“Congress’ directive is clear in the Inflation Reduction Act that the Department of the Interior must hold offshore Lease Sale 261 in the Gulf of Mexico in order to help meet the energy needs of the American people. However, the Biden administration has instead pursued illegal roadblocks, removing more than 6 million acres from this lease sale and imposing new and unjustified restrictions that target American energy workers. These actions place U.S. energy security in a more vulnerable position, put American jobs at risk, and jeopardize the strength of the Gulf Coast economy. Today, we are seeking swift action by the United States legal system to require the Interior Department to fulfill its obligations to the American people.”

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. 

These restrictions were also included in the Final Notice of Sale for Lease Sale 261 – the final offshore lease sale outlined in the Inflation Reduction Act.

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.

Last week, API joined with the State of Louisiana and Chevron U.S.A Inc. in challenging the Final Notice of Sale for Lease Sale 261.