Federal Court issues permanent injunction on federal oil and gas leasing ‘pause’

Federal Court issues permanent injunction on federal oil and gas leasing ‘pause’
Federal Court issues permanent injunction on federal oil and gas leasing ‘pause’

On August 18, 2022, a federal court in Louisiana permanently ordered President Biden and other government officials and agencies to halt the sale of onshore and offshore oil and gas leases. The order comes just a day after the Fifth Circuit overturned the court’s preliminary injunction on the so-called “pause.”

The court order stems from a challenge to an Executive Order that President Biden signed on January 27, 2021. Executive Order 14008, titled “Tackling the Climate Crisis at Home and Abroad” (“Executive Order”), has directed the Secretary of the Department of the Interior to “suspend” new oil and gas leases on public lands or in offshore waters pending the completion of a comprehensive review of federal oil and gas licensing and lease practices gas. More specifically, article 208 of the decree provides, in its relevant part:

Natural oil and gas development on public lands and in offshore waters. To the extent consistent with applicable law, the Secretary of the Interior shall pause new oil and natural gas leases on public lands or in offshore waters pending the completion of the comprehensive review and re-examination of federal oil and gas licensing and leasing practices in light of the extensive stewardship responsibilities of the Secretary of the Interior on public lands and in offshore waters, including potential climate and other impacts associated with oil and gas activities on public lands or in offshore waters.

The Bureau of Ocean Management and the Department of the Interior treated the “pause” as an order to stop. Thirteen states challenged the executive order in a lawsuit filed March 24, 2021 in the United States District Court for the Western District of Louisiana. The requesting states included Louisiana, Alabama, Alaska, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia.

At issue in the lawsuit was whether President Biden had the authority to order a “pause” on oil and gas activities in light of statutory orders under the Outer Continental Shelf Lands Act (“ OCSLA”) and the Mineral Lease Act (“MLA”). ). The OCSLA and the 2017-2022 Five-Year Oil and Gas Leasing Program govern offshore oil and gas leases, and the MLA governs onshore leases of federally-held energy lands. After the executive order was signed, the Bureau of Ocean Management issued a notice of cancellation of a prior lease sale, and the Bureau of Land Management halted and postponed oil and gas lease sales. This led to the court issuing a preliminary injunction on June 15, 2021 restraining the suspension of the rental in June 2021, which was overturned by the United States Court of Appeals for the Fifth Circuit on August 17, 2022. The Fifth Circuit canceled the injunction because it was not specific enough.

On August 18, 2022, the District Court issued a permanent injunction against the government defendants directing them to implement a halt to new oil and gas leases on public lands and in offshore waters, referred to as a “pause” in the executive order. executive. The injunction does not apply to lease sales canceled after March 24, 2021 or to lease sales in states other than the requesting states. In issuing the permanent injunction, the court held that President Biden did not have the power to strike down a law by executive order, stating that “[e]Even the President cannot make significant changes to OCSLA and/or MLA that Congress has not delegated. The court also found that the executive order violated the OCSLA and the MLA, and that the government defendants violated the Administrative Procedure Act.

Key to the court’s decision to ban the “pause” was the economic impact of the executive order. In issuing the injunction, the court found that the plaintiff states’ claims were substantial, noting that “[m]millions and maybe billions of dollars are at stake” and “[l]local government funding, jobs for workers in the plaintiff states, and funds for Louisiana’s coastal restoration are at stake.” The court also found that the public interest would be served by the injunction to light” of a period of high oil and gas prices, the depletion of the Strategic Petroleum Reserve, and the search for other nations to meet the oil and gas needs of the United States”. . This leaves a number of issues to be judged, including whether an executive order can override a law.

The decision comes just eleven days after the Inflation Reduction Act was signed into law, which expands oil and gas lease sales off the coast of Alaska and the Gulf of Mexico.

The full court decision in State of Louisiana et al. against Joseph R. Biden et al.Case No. 2:21-CV-00778, 2022 WL 3570933 (WD La. 18 Aug 2022) can be found here.

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