Gulf of Mexico Oil Leases Up in the Air Amid Another Court Ruling

A U.S. court of appeals has ruled that President Joe Biden’s pause on oil and gas leases on public land can be reinstated, just days after the passage of a landmark Inflation Reduction Act that calls for hastening fossil fuel production on federal lands.

The 5th Circuit Court of Appeals on Wednesday ruled against an injunction that had stopped the Biden administration’s pause on new oil and gas leasing. The injunction will now be sent back to a lower court for more proceedings. 

The appeals court decision was based on what it called vague language describing the administration’s authority in this case. 

“We cannot reach the merits of the Government’s challenge when we cannot ascertain from the record what conduct—an unwritten agency policy, a written policy outside of the Executive Order, or the Executive Order itself— is enjoined,” the three-judge panel concluded, as reported by The Hill.

In 2021, the ban on new oil and gas leases on federal lands was halted by a federal judge in Louisiana. 

The impact of the appeals court’s Wednesday decision remains unclear, and it is unlikely that new oil and gas leases would be paused in light of orders issued through the Inflation Reduction Act to hold two auctions for oil and gas leases in the Gulf of Mexico within 30 days in an attempt to boost production and bring prices down. 

"There should be no questions about the issuance of leases from Gulf of Mexico Lease Sale 257," National Ocean Industries Association President Erik Milito told FOX Business in a statement. "The legislation is clear and mandatory.”

The U.S. Department of Interior held the Gulf of Mexico lease sale in November 2021, resulting in over $190 million in bids before a federal court halted the sale two months later after accusations that the Biden administration failed to consider the environmental impact. 

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Jumps On Massive Crude Inventory Draw
• WTI Crude Falls To Lowest Level Since January
• Gas-To-Oil Switch May Not Be A Huge Catalyst For EU Crude Demand