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Federal judge revokes 1.7 million acres of oil, gas leases in Gulf of Mexico

Federal judge revokes 1.7 million acres of oil, gas leases in Gulf of Mexico
A federal judge on Thursday canceled 1.7 million acres of oil and gas leases, ruling that the Interior Department did not properly assess the climate change impact of drilling in the Gulf of Mexico. File Photo by A.J. Sisco/UPI | License Photo

Jan. 27 (UPI) -- A federal judge on Thursday revoked the largest offshore oil and gas lease sale in U.S. history, ruling that the Biden administration failed to properly assess the climate change impact of drilling in the Gulf of Mexico.

In its ruling, the U.S. District Court for the District of Columbia canceled the 1.7 million acres of oil and gas leases and ordered the Interior Department to conduct a new environmental analysis accounting for the greenhouse gas emission that would result from the eventual development and production of the leases.

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Following the new assessment, the agency will then be required to decide whether to hold a new auction.

In his ruling, Judge Rudolph Contreras concluded that the Interior Department's Bureau of Ocean Energy Management based its decision to hold the sale on an environmental analysis that miscalculated the greenhouse gas emissions associated with the drilling, finding that the model and set of assumptions produced by the analysis were "arbitrary and capricious."

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Brettny Hardy, a senior attorney for Earthjustice, one of several environmental groups that challenged the sale by arguing that it was based on the outdated analysis carried out by the Trump administration described the ruling as "huge."

"This requires the bureau to go back to the drawing board and actually consider the climate change costs before it offers these leases for sale, and that's really significant," Hardy said. "Once these leases are issued, there's development that's potentially locked in for decades to come that is going to hurt our global climate."

During his 2020 presidential campaign, President Joe Biden pledged to stop issuing new leases for drilling on public lands and in federal waters and shortly after taking office, he signed an executive order to pause the issuing of new leases looking to make good on that promise.

However, following a challenge by Republican attorneys general from 13 states, a federal judge in Louisiana blocked the order and ruled that the administration must hold previously scheduled lease sales in the Gulf.

Biden administration officials had stated that Interior Secretary Deb Haaland could be held in contempt of court if the auction was not held, but in their lawsuit, the environmental groups argued the administration had other options including conducting a new analysis.

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Ultimately on Nov. 17, 80 million acres of leases were auctioned off and while it represented just a fraction of the total offering, Shell, BP, Chevron and Exxon Mobil offered $192 million for the rights to drill on the 1.7 million acres representing the largest gas and oil lease in the nation's history and most lucrative offshore auction since March 2019.

Scott Lauermann, a spokesman for the American Petroleum Institute, which represents the oil and gas companies said in a statment that the group was reviewing the decision and considering its options.

"Offshore energy development plays a critical role in strengthening our nation's economy and energy security" Laurmann said.

Oil industry exectutives on Thursday also said they planned to appeal the court' sruling.

"At a time of geopolitical uncertainty and rapidly rising energy prices, U.S. oil geopolitical uncertainty and rapidly rising energy prices, U.S. oil and gas production is more important than ever to curb inflation and to fortify our national security," said Erik Milito, president of the National Ocean Industries Association, which represents offshore energy companies.

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