A federal appeals court ruled Monday night that the Biden administration must hold a large sale of offshore oil and gas leases in the Gulf of Mexico without added ecological protections.

The 5th U.S. Circuit Court of Appeals ruled that the Bureau of Ocean Energy Management, a subagency of the Interior Department, must—within 37 days—hold “Lease Sale 261,” a huge offshore oil and gas lease transaction required by the Inflation Reduction Act.


The sale—which has been subject to extensive litigation involving the government, activist organizations, and industry groups—initially was scheduled for September. It was pushed back when the ocean bureau attempted to require added protections for a whale species, Rice’s whale, before the sale.

The sale was delayed again earlier this month when the agency cited the need to wait and see how the appeals court would decide on a September ruling against the government’s position.

“Energy independence scored an important win tonight with the 5th Circuit decision lifting unjustified restrictions on oil and natural gas vessels and restoring acreage for offshore energy development,” Ryan Meyers, senior vice president and general counsel for the American Petroleum Institute, said of the court’s ruling. “The U.S. Gulf of Mexico plays a critical role in maintaining affordable, reliable American energy production, and today’s decision creates greater certainty for the essential energy workforce and the entire Gulf Coast economy.”

The decision affirms an earlier ruling by a subordinate court, which held that the government’s late alterations to the sale were illegal.

Interior’s Bureau of Ocean Energy Management had introduced new restrictions intended to protect the Rice’s whale and sliced 6 million acres from the lease sale area after entering into a settlement agreement with environmentalist groups that had sued the government, alleging an inadequate environmental review process.

It wasn’t clear whether there will be any further litigation related to the lease sale or delays to its timeline.

“The court’s ruling is a necessary and positive response to an unwarranted decision by the Biden administration,” Erik Milito, president of the National Ocean Industries Association, said of the ruling. “The removal of millions of highly prospective acres, along with the imposition of excessive restrictions, resulted from a voluntary agreement with activist groups that sidestepped legal processes, disregarded scientific considerations and neglected public input.”

Offshore oil production in federally controlled Gulf waters accounted for about 15% of total U.S. crude oil output in 2021, according to the U.S. Energy Information Administration.

Because the Gulf of Mexico’s oil is considered less carbon-intensive to produce than oil from most other regions, diminished production in the affected zone could be replaced by more carbon-intensive barrels from elsewhere in the world, according to the American Petroleum Institute.

The involved government agencies and the White House didn’t respond immediately to requests for comment.

Originally published by the Daily Caller News Foundation

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