Judge axes $190mn offshore lease

The Biden administration has been ordered not to execute leases for offshore drilling in the Gulf of Mexico which were auctioned off in November.

The government had offered 80 million acres of federal waters, of which 1.7 million acres were sold, netting over $190 million from oil giants like Chevron, Shell, and Exxon Mobil. A federal judge sided with a group of environmentalists, who argued that the auction had been given the green light under a flawed justification.

Rudolph Contreras, a US District Court judge for the District of Columbia, acknowledged that the environmental impact assessment by the Department of the Interior had used outdated computer modeling. The analysis failed to account for foreign consumption in its calculations of the greenhouse emissions that would be generated due to the lease sale, the judge said.

The analysis was done under the Trump administration, and it concluded that the negative impact on the global climate would be worse if the US didn’t drill more in the Gulf of Mexico and instead met its energy needs through imports.

The Biden administration attempted to put a pause on the pending auction, under the provisions of a February 2021 executive order aimed at tackling the climate change crisis. However, in June, a group of red states led by Louisiana challenged the moratorium in court, successfully obtaining an injunction.

The federal government decided to move forward with the auction, even as it acknowledged that doing so would undermine the president’s environmental credentials. During the court proceedings in Louisiana, the administration argued that the judge couldn’t compel it to sell the leases, only to overturn the way the pause was ordered in the first place.

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Unsurprisingly, the environmental group Earthjustice noted that the Biden administration should not have allowed the auction to happen, when it sued it over the decision in late August on behalf of several other eco-organizations. The White House “caved under political pressure and a well-funded Oil and Gas lobby to make this decision,” the group’s senior attorney Brettny Hardy said at the time.

In his ruling on Thursday, Justice Contreras agreed with the group’s argument, ordering the Interior’s Bureau of Ocean Energy Management (BOEM) not to execute the lease agreements and instead to conduct a new environmental impact assessment.

“I think this hopefully marks the end of business as usual when it comes to leasing,” Hardy told CNN after winning the case. “Maybe it creates a sea change in the administration and gets them to start really grappling with these climate issues in a significant, practical way.”

Their opponents from the oil and gas industry, as well as government officials, said they were studying details of the ruling.