A federal judge on Thursday invalidated the largest offshore oil and gas lease sale in the nation’s history, ruling that the Biden administration violated federal law by relying on a seriously flawed analysis of the climate change impact of drilling in the Gulf of Mexico.
The decision, by the U.S. District Court for the District of Columbia, threw out 1.7 million acres of oil and gas leases that the Biden administration did not want to sell. Shortly after taking office, President Biden suspended new oil and gas drilling on lands and waters owned by the federal government. But after a Louisiana judge struck down the moratorium last summer, administration officials said they were forced to go through with the sale in November.
The auction was held just four days after Biden pledged ambitious climate action to world leaders at a United Nations climate summit in Glasgow, Scotland. Though the administration offered up to 80 million acres in the Gulf of Mexico for drilling leases, the Interior Department ultimately sold only a fraction of that amount. The sale netted nearly $192 million and ranked as the most profitable offshore auction since March 2019.
Environmental advocacy organizations filed a lawsuit claiming that the sale rested on incorrect assumptions.
In his ruling, Judge Rudolph Contreras concluded that the Interior Department’s Bureau of Ocean Energy Management had based its decision to hold the sale on a flawed environmental analysis that miscalculated the greenhouse gas emissions associated with future oil and gas drilling in the Gulf of Mexico. Completed under the Trump administration, the analysis found that the climate impacts would be worse if the acreage went unsold because foreign oil companies would increase their production, leading to more emissions of planet-warming gases.
The model and the set of assumptions that produced this result were “arbitrary and capricious,” Contreras wrote, reaching the same conclusion as both the U.S. Court of Appeals for the 9th Circuit and the District Court for the District of Alaska in previous cases concerning lease sales based on a similar analysis.
“The Court believes that (the Bureau of Ocean Energy Management’s) error was indeed a serious failing,” Contreras wrote.
The decision means the Biden administration will have the chance to conduct a new environmental analysis to quantify the climate impacts of future oil and gas production, a step climate activists hope will lead to a different outcome.
“We’re confident that once they do the emissions modeling right, given the climate crisis that we’re in, they will reach the decision that leasing doesn’t make sense right now,” said Brettny Hardy, an attorney for the environmental law firm Earthjustice, who worked on the case.
A spokeswoman for the Interior Department declined to comment on the specifics of the case, saying the agency is reviewing the judge’s decision.
Scott Lauermann, a spokesman for the oil and gas industry’s largest trade group, the American Petroleum Institute, called the decision “disappointing.” And Eric Milito, president of the National Ocean Industries Association, which represents offshore oil and gas companies, called on the administration to “defend responsible U.S. offshore production and to take the necessary steps to ensure continued leasing and energy production from the U.S. Gulf of Mexico, for the benefit of all Americans.”
The decision comes at a sensitive time for the Biden administration, which has been criticized by environmental groups for failing to curb fossil fuel production in the United States. At a Thursday briefing, White House press secretary Jen Psaki defended the administration’s climate policies and said that the court ruling striking down the oil and gas moratorium had become a “significant challenge.”
Legal challenges have “made it impossible for us to stop many of these leases,” Psaki said.
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