Court Cancels Biden Administration's 'Carbon Bomb' Oil Lease Sale

A federal judge ruled that the Biden administration did not properly account for climate effects when it auctioned off millions of acres in the Gulf of Mexico.
The auction had offered more than 80 million acres in the Gulf of Mexico, and companies ended up bidding more than $191 million for rights to drill across more than 1.7 million acres.
The auction had offered more than 80 million acres in the Gulf of Mexico, and companies ended up bidding more than $191 million for rights to drill across more than 1.7 million acres.
Mary Altaffer/Associated Press

A federal judge on Thursday vacated dozens of oil and gas leases that fossil fuel companies secured late last year in the Gulf of Mexico, concluding that the Biden administration failed to properly account for climate effects when it held its massive offshore auction.

The ruling is a major win for environmental groups that sued to block what many described as a ticking “carbon bomb.”

Judge Rudolph Contreras, of the U.S. District Court for the District of Columbia, sided with plaintiffs in the case, who argued that the Department of the Interior relied on a faulty analysis that underestimated the planet-warming greenhouse gases and associated environmental effects from future drilling and development of the leases.

Interior “acted arbitrarily and capriciously in excluding foreign consumption from their greenhouse gas emissions calculation,” Contreras wrote.

The offshore sale — the largest in U.S. history — offered up more than 80 million acres of the Gulf at auction. Companies ultimately bid more than $191 million for rights to drill across more than 1.7 million offshore acres — an area larger than the state of Delaware.

“We are pleased that the court invalidated Interior’s illegal lease sale,” Brettny Hardy, a senior attorney at Earthjustice, which represented several environmental organizations in the lawsuit, said in a statement. “We simply cannot continue to make investments in the fossil fuel industry to the peril of our communities and increasingly warming planet.”

Hardy added it is time for the administration to follow through on President Joe Biden’s campaign promises to ban new federal fossil-fuel leasing. “We can no longer afford to do anything less,” she said.

The Biden administration has argued it had no choice but to move forward with the offshore sale after a Trump-appointed federal judge in Louisiana struck down Biden’s executive order in January 2021 temporarily pausing new oil and gas leases across federal lands and waters.

But environmental lawyers insisted that the administration had options for scaling back, delaying or halting it, including requesting that an appeals court stay — or suspend — the injunction.

Melissa Schwartz, a spokesperson for the Interior Department, reiterated that the administration’s hands were tied.

“To comply with the injunction imposed in the District Court of Louisiana litigation, we were compelled to proceed with Lease Sale 257 based on the previous administration’s environmental analysis and its decision to approve the lease sale,” she said via email. “We are reviewing the Court’s decision concerning deficiencies in that record.

“Our public lands and waters must be protected for generations to come,” she added. “We have documented serious deficiencies in the federal oil and gas program. Especially in the face of the climate crisis, we need to take the time to make significant and long overdue programmatic reforms. Our work will be guided by the law, science and sound policy.”

The American Petroleum Institute, the nation’s largest oil and gas lobby and an intervening defendant in the case, called the judge’s decision “disappointing” and said it is considering its options.

“Offshore energy development plays a critical role in strengthening our nation’s economy and energy security,” API spokesperson Scott Lauermann said via email.

The now-revoked lease sale dwarfed the Trump administration’s final Gulf auction in 2020, when 518,000 acres went for $121 million, and threatened to lock in decades of future drilling and greenhouse gas emissions. By Interior’s own estimates, it was expected to lead to the production of an additional 1.1 billion barrels of oil and 4.4 trillion cubic feet of natural gas over several decades.

“Today’s decision is a victorious outcome not only for the Gulf’s communities, wildlife, and ecosystem, but also for the warming planet,” Hallie Templeton, legal director at Friends of the Earth, said in a statement.

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