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Vol. 26, No.25 Week of June 20, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

Red state win on leasing

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Federal judge rules in favor of 13-state lawsuit to resume O&G leasing

Kay Cashman

Petroleum News

Judge Terry Doughty of the U.S. District Court for the Western District of Louisiana issued a preliminary injunction June 15 that blocks the Biden administration's moratorium on new federal oil and gas leasing.

Doughty ruled that “millions and possibly billions” of dollars are at stake and that the 13 state governments challenging the pause in leasing are likely to succeed in their suit. The judge also said President Joe Biden doesn’t have the legal right to stop leasing federal lands for oil and gas exploration and production without approval from Congress.

Biden issued the executive order to shutdown federal leasing on his first day in office.

The 13 state governments that were part of the lawsuit, which was filed in March, include Alaska, Louisiana, Alabama, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah, and West Virginia.

The lawsuit was led by Louisiana Republican Attorney General Jeff Landry.

“This is a victory not only for the rule of law, but also for the thousands of workers who produce affordable energy for Americans,” Landry said in a statement following the ruling.

“This is excellent news for Alaska. As we have seen in less than five months, the threat of federal overreach on major economic projects within Alaska is very real. It is stunning that a federal judge has to tell the President of the United States to stop trying to illegally shut down environmentally sound oil and gas development and good paying jobs for Americans and Alaskans - which support the indigenous tribes and residents of Alaska’s North Slope - while the President works to promote carbon emitting Russian gas production overseas. Alaska is consistently a top producer of oil and gas in the U.S. and we are proud of our state’s responsible development and transportation of oil to meet American demand,” Alaska Gov. Mike Dunleavy said June 15.

“AOGA is pleased at the Western Louisiana District Court’s decision to hold the Biden administration to the letter of the law, which requires the administration to carry out federal lease sales under multiple statutes,” said Patrick Bergt, Alaska Oil and Gas Association regulatory and legal affairs manager.

Oil production, AOGA said, serves as Alaska’s economic engine, accounting for one-fourth of all jobs in the state and providing more than $2 billion in annual revenue to state and local governments.

Resume on and offshore

The judge’s order directs the Department of the Interior to resume lease sales for oil and gas production on federal lands, on and offshore.

In his order, Doughty criticized the Biden administration for failing to explain the pause when it was issued and not receiving public feedback in advance. Both actions are required by the Administrative Procedures Act.

Additionally, the judge ruled that two existing laws - the Outer Continental Shelf Lands Act and the Mineral Leasing Act - require the Interior Department to hold periodic lease sales of available land for oil and gas production, which the department has not done since Biden took office.

The American Petroleum Institute was pleased with the court’s ruling.

“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, all while likely increasing emissions and the risks of climate change,” API said.

Interior responds

Doughty's ruling requires the Interior Department to immediately restart its leasing program, even as the agency continues its review of the effects of drilling.

Interior Department communications director, Melissa Schwartz, responded to the injunction in a statement, saying, “we are reviewing the judge’s opinion and will comply with the decision,” though she did not specify any plans to appeal the injunction.

“The Interior Department continues to work on an interim report that will include initial findings on the state of the federal conventional energy programs, as well as outline next steps and recommendations for the Department and Congress to improve stewardship of public lands and waters, create jobs, and build a just and equitable energy future,” she added.

Bloomberg reported that Doughty refused in May to allow environmental groups to intervene in the case, saying that the Natural Resources Defense Council, Healthy Gulf and other groups had not shown federal government lawyers would not adequately represent their interests.

A similar challenge by oil and gas industry groups to the leasing pause is pending in Wyoming, Bloomberg said.



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