Judge promises quick decision on oil and gas lease sale

U.S. District Judge James D. Cain, Jr. promised a quick decision in Thursday’s case challenging the Biden administration’s recent decision to limit oil and gas development in the Gulf off the coast of Louisiana,

Cain told Luther L. Hajeck, who represented the interest of the Department of the Interior, that he’d probably come to a decision before Hajeck, traveling back to his home in Denver, got off his plane. (No decision was available by press time.)

The State of Louisiana, the American Petroleum Institute and Chevron U.S.A. Inc. filed the complaint against the U.S. Department of the Interior, Bureau of Ocean Energy Management (BOEM). At the end of August, BOEM announced that it would reduce the amount of acreage oil and gas developers could bid on in the final Inflation Reduction Act-mandated oil and gas lease sale scheduled for Sept. 27.

Available acreage would be reduced from 73 million to 67 million, which not only added uncertainty to the bidding process for companies, but would also impact oil and gas revenues to go to the State’s coffers.

Judge Cain repeatedly brought up the logic of the vessel restriction stipulation not used in other lease sales. This stipulation would only restrict the travel of oil and gas service and supply vessels for companies who acquire new leases. Speeds would be greatly reduced, and there would be no night travel. The stipulation would not impact any other industry vessels, not cruise lines, fishing vessels, international ships, not even oil and gas industry supply and service boats who previously acquired their leases in this same area.

The Associated Press reported that the changes to the lease sale is part of an agreement the Biden administration reached in July with environmentalists in efforts to settle a whale protection lawsuit filed in federal court in Maryland.

Cate Stetson, the attorney who spoke on the behalf of the three plaintiffs, called the last-minute changes “unlawful and arbitrary.” Stetson said previous Lease Sales 247, 256 and 257 took place with the same standard stipulations, what she called a “drumbeat of consistency” until now.

The Inflation Reduction Act passed in 2022 required that previously announced offshore lease sales in the the Gulf of Mexico and Alaska be held during the next two years.

The Biden administration also recently canceled seven controversial oil gas leases in an Alaskan wildlife refuge issued at the end of the Trump administration, and has proposed a rule to protect about 13 million acres in another part of the state, known as the National Petroleum Reserve.

Lease Sale 261 stipulations on vessel travel have not been applied to wind lease sales, according to a report from the Institute for Energy Research.

A final critical habitat determination of the Gulf whale has not been reached and could take up to five years, according to Stetson.

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