Released September 27, 2023 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--The U.S. Bureau of Energy Management is postponing a 73-million-acre oil and gas lease sale in the Gulf of Mexico to no later than November 8 as a result of a new court ruling.
"As a result of the United States Court of Appeals for the Fifth Circuit ruling on September 25, 2023, BOEM will not hold Lease Sale 261 on September 27, 2023, as originally planned," the BOEM said on its website, adding, "The order allows time for a more orderly lease sale process."
BOEM said it will include lease blocks that were previously excluded due to concerns regarding potential impacts to the Rice's whale distribution in the Gulf of Mexico. The agency said it would issue a final notice of sale in the coming days.
The announcement came after a federal judge on September 22 overturned the agency's removal of 6 million acres from the lease sale.
The acres in question had been removed by BOEM due to concerns about the endangered Rice's whale, a species that had only been identified in 2021. Before that, the whale had been seen as a subpopulation of Bryde's whale. The Rice's whale population is estimated to be between 30 and 50.
When the lease sale was originally scheduled in March, it included 73 million acres available for lease. Then in August, the Biden administration removed 6 million acres from the sale in response to an August 25 lawsuit filed by Earthjustice on behalf of environmental groups, including Healthy Gulf, Bayou City Waterkeeper, Friends of the Earth, Center for Biological Diversity, Natural Resources Defense Council, and Sierra Club, that were concerned about Rice's whale.
The suit also listed issues regarding the amount of greenhouse gas emissions that would result from burning the oil and gas produced as a result of the lease. The revised order for the sale included 12,395 blocks of the Outer Continental Shelf.
When BOEM announced the removal of the 6 million acres, Shell Plc (NYSE:SHEL) (London, England), Chevron Corporation (NYSE:CVX) (San Ramon, California), the American Petroleum Institute, and the State of Louisiana filed suit in U.S. District Court in Lake Charles, Louisiana, to reverse the order. Those entities said the administration's removal of acreage had violated provisions of the 2022 Inflation Reduction Act that, along with incentivizing clean energy, also offered new Gulf of Mexico acres for drilling.
U.S. District Court Judge James Cain Jr. agreed and granted a preliminary injunction. In his decision, Cain said, "BOEM failed to follow its own procedures by making significant changes to the final notice of sale, thereby depriving both affected states and the public the opportunity for meaningful review and comment. The procedural error is particularly grave here, because of both the compressed timeline and BOEM's inexplicable about-face on the scientific record it had previously developed."
Cain also noted that the State of Louisiana stood to lose as much as $2.2 million if the restrictions were allowed.
In his order, Cain ruled that the lease sale of the full 73 million acres must occur by September 30, which has since been pushed back by more than a month by the appeals court.
After Cain's ruling, Earthjustice and the Biden administration immediately filed an appeal. Earthjustice and others say they are only trying to stop a small part of the sale, that oil companies should be happy with the 67 million acres that are still on the table.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
"As a result of the United States Court of Appeals for the Fifth Circuit ruling on September 25, 2023, BOEM will not hold Lease Sale 261 on September 27, 2023, as originally planned," the BOEM said on its website, adding, "The order allows time for a more orderly lease sale process."
BOEM said it will include lease blocks that were previously excluded due to concerns regarding potential impacts to the Rice's whale distribution in the Gulf of Mexico. The agency said it would issue a final notice of sale in the coming days.
The announcement came after a federal judge on September 22 overturned the agency's removal of 6 million acres from the lease sale.
The acres in question had been removed by BOEM due to concerns about the endangered Rice's whale, a species that had only been identified in 2021. Before that, the whale had been seen as a subpopulation of Bryde's whale. The Rice's whale population is estimated to be between 30 and 50.
When the lease sale was originally scheduled in March, it included 73 million acres available for lease. Then in August, the Biden administration removed 6 million acres from the sale in response to an August 25 lawsuit filed by Earthjustice on behalf of environmental groups, including Healthy Gulf, Bayou City Waterkeeper, Friends of the Earth, Center for Biological Diversity, Natural Resources Defense Council, and Sierra Club, that were concerned about Rice's whale.
The suit also listed issues regarding the amount of greenhouse gas emissions that would result from burning the oil and gas produced as a result of the lease. The revised order for the sale included 12,395 blocks of the Outer Continental Shelf.
When BOEM announced the removal of the 6 million acres, Shell Plc (NYSE:SHEL) (London, England), Chevron Corporation (NYSE:CVX) (San Ramon, California), the American Petroleum Institute, and the State of Louisiana filed suit in U.S. District Court in Lake Charles, Louisiana, to reverse the order. Those entities said the administration's removal of acreage had violated provisions of the 2022 Inflation Reduction Act that, along with incentivizing clean energy, also offered new Gulf of Mexico acres for drilling.
U.S. District Court Judge James Cain Jr. agreed and granted a preliminary injunction. In his decision, Cain said, "BOEM failed to follow its own procedures by making significant changes to the final notice of sale, thereby depriving both affected states and the public the opportunity for meaningful review and comment. The procedural error is particularly grave here, because of both the compressed timeline and BOEM's inexplicable about-face on the scientific record it had previously developed."
Cain also noted that the State of Louisiana stood to lose as much as $2.2 million if the restrictions were allowed.
In his order, Cain ruled that the lease sale of the full 73 million acres must occur by September 30, which has since been pushed back by more than a month by the appeals court.
After Cain's ruling, Earthjustice and the Biden administration immediately filed an appeal. Earthjustice and others say they are only trying to stop a small part of the sale, that oil companies should be happy with the 67 million acres that are still on the table.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
