Court Permanently Blocks Pause on Oil and Gas Leasing in 13 States

A Louisiana federal judge on Aug. 18 issued a permanent injunction preventing the Biden administration from blocking oil and gas leasing on federal lands in 13 states, a day after the U.S. Court of Appeals for the Fifth Circuit lifted an earlier injunction against the administration’s pause on leasing. Judge Terry Doughty of the Louisiana District Court, who had issued the preliminary injunction in 2021, found that the leasing ban was “beyond the authority of the President of the United States.”  The plaintiffs in the most recent decision are Alabama, Alaska, Arkansas, Georgia, Louisiana, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia. The ruling does not apply to other states.

In June 2021, the Louisiana court blocked the Biden administration from implementing a pause on new drilling leases set forth in an executive order issued in January 2021. The court found that the pause violated requirements under the Outer Continental Shelf Lands Act to offer areas for oil and gas development. In August 2021, the U.S. Interior Department announced that the Department of Justice has appealed the preliminary injunction entered by a district court ruling to the U.S. Court of Appeals for the Fifth Circuit, but the leasing program will continue while the appeal is pending.

Subsequently, in November, the administration issued a report on federal oil and gas leasing practices recommending an overhaul of the program. The report called for significant reforms to ensure fair return to taxpayers, discourage speculation, hold operators responsible for remediation, and create a more inclusive approach that provides adequate opportunity for public engagement and consultation with Tribes.

Legal bystanders observed that the Biden administration was not likely to restore the cessation after Interior issued its analysis of the program’s effects in November 2021 and after committing to leasing requirements under the newly passed Inflation Reduction Act.