On Tuesday, a federal judge blocked an order from the Biden administration that suspended new oil and gas leases on federal lands and waters. The move dealt a blow to the president’s plan to shift the nation away from fossil fuels and cleared the way for oil and gas leases to resume on U.S. public lands.
Ruling by U.S. Federal Judge Terry Doughty of Louisiana
According to the preliminary injunction issued by U.S. Judge Terry Doughty of Louisiana, without approval from Congress, Biden did not have the authority to pause the leases in January when he signed Executive Order 14008, entitled “Tackling the Climate Crisis at Home and Abroad.” The Louisiana judge ordered that plans proceed for lease sales that were delayed for the Gulf of Mexico and Alaska waters “and all eligible onshore properties.” Doughty remarked:
“The omission of any rational explanation in canceling the lease sales, and in enacting the pause, results in this court ruling that plaintiff states also have a substantial likelihood of success on the merits of this claim.”
Biden’s suspension—which fulfilled an election pledge after he campaigned on a “transition away from oil”—did not affect activity on private land, which makes up the bulk of U.S. oil and gas output. Instead, it referred specifically to federally held lands and waters, which account for roughly 22 percent of U.S. oil production. The ruling, which applies nationwide, allows for the leasing process to resume while the court hears additional arguments in the case. Doughty noted the pause could do substantial harm to states where production depends on public lands, writing:
“Millions and possibly billions of dollars are at stake. Plaintiff states have a reliance interest in the proceeds derived from offshore and on land oil and gas lease sales”.
Immediately following the president’s ban in January, the industry was quick to take legal action. Western Energy Alliance filed a lawsuit just days after the ban, alleging Biden exceeded presidential authority and constituted a violation of the Mineral Leasing Act, National Environmental Policy Act, and the Federal Lands Policy and Management Act, which requires the Interior Secretary to hold quarterly lease sales.
Thirteen states, led by Louisiana Attorney General Jeff Landry, also sued the Biden administration because of the ban. It was on this suit that Doughty ruled, noting that the plaintiff states stood to suffer damages in the form of missed income from lease bids and bonuses from oil and gas companies. At the time, Landry—who said the moratorium has already driven up prices and endangered energy jobs—accused the Biden administration of “effectively banning oil and gas activity that supports businesses, employees our workers and, also, as importantly, funds our coastal restoration projects.”
Bit of a disconnect between WSJ editorial and business section today pic.twitter.com/xaSSLwv3Fa
— Kevin O'Scannlain (@kevin_oscan) February 17, 2021
The oil and gas industry—which in 2020 recognized the U.S. as one of the world’s top producers—welcomed Judge Doughty’s decision. Kevin O’Scannlain, vice-president of upstream policy at the American Petroleum Institute, a powerful Big Oil D.C. lobby group, said:
“Now is the time for the administration to put an end to this ‘import more oil’ policy that threatens American jobs and deprives state and local communities of much-needed revenue. The federal leasing pause is harmful to our nation’s national security, environmental progress, and economic recovery.”
Lawyers for the administration argued in briefs that, “No existing lease has been canceled as a result of any of the actions challenged here, and development activity from exploration through drilling and production has continued at similar levels as the preceding four years.” Still, the administration said it would comply with the ruling but will continue with its review of the oil and gas lease process.
Biden Administration’s Push Towards Offshore Wind
In line with the goals of the Paris Climate Agreement, Biden’s stated mission is to transition the U.S. energy system towards lower carbon as part of efforts to tackle climate change and reduce emissions economy-wide. The president has designated offshore wind as a critical component of his plans to decarbonize the nation’s power system, declaring it will create thousands of new jobs. Up to $3 billion in federal loans are being made available by the U.S. Department of Energy (DOE) to support project development. At the same time, the U.S. Department of Interior (DOI) has been ordered to advance the regulatory review process for multiple new offshore wind ventures.
On Jun. 11, 2021, the Biden administration announced plans to develop 30 gigawatts (GW) of offshore wind by 2030. The first competitive offshore wind lease sale for the administration, the creation of an 800,000-acre “New Wind Energy Area” off the U.S. Atlantic coast—along the New York Bight zone situated between Long Island and New Jersey—is designated for new leasing opportunities, the earliest of which could take place later this year.
Despite Biden’s push for offshore wind, permit issues, grid integration, tax credit issues, environmental concerns, and public opposition to wind turbines remain. And, according to the NY Times, the chances of slipping the president’s climate action provisions into an infrastructure bill are dwindling. Nonetheless, as indicated in the “New Wind Energy Area,” the Biden administration is pressing ahead with other avenues to expand his climate change agenda.
“Vineyard Wind,” a project in Martha’s Vineyard that was delayed several times by the Trump administration, is now scheduled to close financing this year and connect to the grid by 2023. Left out of the conversation are concerns from the fishing industry, which were a critical factor in the project’s delay. In May, President Trump issued a statement reinforcing his opposition to the Vineyard project. He said:
“Congratulations to Martha’s Vineyard in Massachusetts for the privilege they will have in looking at massive windmills that have been approved by the Biden Administration and are being built, in China, of course, as part of an extraordinarily large wind farm. Wind is an incredibly expensive form of energy that kills birds, affects the sea, ruins the landscape, and creates disasters for navigation.”