Federal District Judge Holds Up Public Lands Oil and Gas Leasing Pause

Oil Rigs

A Louisiana federal judge blocked the Biden administration’s effort to impose a lull on public land and offshore oil and gas leasing. Whether the June 15 decree will actually result in the issuance of any new leases not favored by the Department of Interior is unclear.

The order came in a March 24 lawsuit filed by 14 states in the aftermath of President Joe Biden’s Jan. 27 executive order that the Department of Interior must “pause new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices in light of the Secretary of the Interior’s broad stewardship responsibilities over the 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.”

Arguing that federal law does not permit the president any discretion to cease the disbursement of leases, the states persuaded U.S. District Judge Terry Doughty, an appointee of former President Donald Trump, to issue a nationwide preliminary injunction.

At the heart of the case are claims that the Administrative Procedure Act, the law that governs agency rulemaking, required Biden to seek public comment before issuing his executive order or Secretary of the Interior Deb Haaland to do so before carrying it out. The Department of Justice argued that neither action is “final,” a prerequisite to judicial review under the APA, and that, in any case, the Department of Interior has discretion not to lease offshore and public lands that judges cannot second-guess. 

Doughty rejected both arguments. He pointed to a slew of cases that he said indicated a final decision had been made and then distinguished between a decision not to lease based on “an environmental issue” and “stopping or pausing a lease sale with no such issues and only as a result of” Biden’s order.  

“The fact that a statute grants broad discretion to an agency does not render the agency’s decisions completely unreviewable unless the statutory scheme, taken together with other relevant materials, provides absolutely no guidance to how that discretion is to be exercised,” Doughty wrote. “That is not the case here. Both MLA and OCSLA set forth requirements to hold lease sales of eligible land and sets forth how it is to be conducted.” Doughty was referring to the Mineral Leasing Act, a 1920s statute governing mineral extraction on public lands, and the Outer Continental Shelf Lands Act, a 1950s law that regulates oil and gas extraction off the nation’s coasts. Republican state attorneys general, led by Louisiana’s Jeff Landry, argued that neither law allowed Biden or Haaland a choice to initiate a lapse in leases.

Drew Caputo, the vice president of litigation for lands, wildlife and oceans at Earthjustice, was blunt in his criticism of Doughty’s order. “This ruling is legally wrong,” Caputo said. “The law does not require the government to run our public lands and waters for the sole benefit of the oil and gas industry.”  Liz Trotter, a spokesperson for Earthjustice, clarified that Doughty failed to address the language of the MLA. Instead, he “appears to have wrongly assumed that all public lands are eligible and available,” she said. “Nor did he grapple with the extensive case law—including [Supreme Court] precedent—that [the Department of Interior] essentially has unfettered discretion not to lease lands.” 

According to Trotter, Doughty seems to have misunderstood the APA. “Like so much of the order, Judge Doughty’s holding on the APA’s applicability to presidential action is unclear,” she said. “In parts, he acknowledges that executive orders are not subject to the APA, but elsewhere he seems to suggest that the APA is the proper vehicle for review. To me, it indicates a general lack of understanding of the APA.” Karen Sokol, a professor at Loyola University Law School in New Orleans, harshly summed up these criticisms. “It is, I think, very, very poorly reasoned,” she said.

Sokol took specific issue with how Doughty weighed the plaintiffs’ claims that the oil and gas leasing pause would hurt them against the government’s argument that the pause advances the public interest, explaining that such balancing is needed before an injunction can be issued. If the government proceeds with leasing, she said, “it’s pretty consequential.” “It’s very hard to undo them, so the nature of this order is such that it’s not easy to rewind if the plaintiffs lose,” Sokol said, referring to leases. “And they very well could.” As a result, Sokol continued, the plaintiffs faced a “heavy” burden to get the injunction. 

“It’s heavily skewed in favor of the plaintiffs and the harm they allege they would suffer,” Sokol said. But in actuality, Sokol said, even an immediate resumption of leasing will not cause any short-term growth in revenues to the 14 states that sued Biden over the pause, a point that Doughty highlighted as justification for his injunction order. Resumption of leasing would have, she argued, “very little consequence” for the plaintiffs. 

By contrast, Sokol argued, the government “detailed quite convincingly in its case” the harm the public would suffer if leasing continues. “These are public lands,” she said. “These are held in trust by the government for the public and it issued this pause in order to make a full assessment of the leasing program and assure that it properly accounted for the costs and damages incurred by the climate emergency the government has a responsibility to address.” “The opinion itself doesn’t weigh them equally,” she said. “It spends a lot more time on the opinions of the states’ experts,” who are, according to Sokol, “funded by industry.” 

She pointed to growing consensus, including a recent International Energy Association report, that the U.S. needs to move immediately to stop additional oil and gas extraction if the warming of the Earth by growing accumulation of greenhouse gases in the atmosphere is to be arrested and said Doughty’s ruling reflects an unwarranted hostility to that transition. “What the industry has made clear is that it and its political backers are going to do everything they can to fight meaningful climate policy,” she said. “They’re essentially drawing a line in the sand” because of the symbolic importance of even a temporary hold on additional public land oil and gas leasing. 

No immediate change in the number of oil and gas leases either offshore or on public lands is expected to follow Doughty’s ruling. “Federal agencies will need to determine which lands should be made available for leasing, to complete the legally required studies to determine what lease provisions are needed to protect other values associated with the leased lands, and to then schedule and complete the lease sales,” said John Ruple, a research professor and the Wallace Stegner Center for Land, Resources and the Environment fellow at the University of Utah S.J. Quinney College of Law, in an email. “That will take time.”

Ruple also pointed out that Doughty’s decision will not affect all oil and gas leasing on the continental shelf or the public lands. “The pause also did not impact the over 13 million acres of federal land and over 9 million acres of offshore territory that are leased but undeveloped, or the roughly 7,700 federal permits to drill that have already been issued but that remain unused,” he said. 

The 13 other states that sued Biden in the case are Alabama, Alaska, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia.

Another lawsuit that challenged Biden’s mandate to interrupt fossil fuel exploration and extraction leasing on public lands is pending in the U.S. District Court in Cheyenne. No decision in that case has been announced by the court.

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