Court Rules Two 2018 Oil Leases in Gulf of Mexico Unlawful

The U.S. Court of Appeals for the District of Columbia on Aug. 30 ruled two oil leases – lease sales 250 and 251 – conducted by the Interior Department during the Trump administration in the Gulf of Mexico were unlawful. In 2020, a federal district court declared that the sales were valid, and environmental groups swiftly appealed the ruling to the D.C. Circuit Court of Appeals, which led to the most recent decision.

The ruling found the department in 2018 leased more than 150 million acres for oil exploration, without appropriately analysing the risk under the National Environmental Policy Act, or NEPA. Moreover, the department refused to take into consideration potential future regulatory changes and denied considering potential shortcomings in environmental enforcement, according to the ruling.

The lease sales, 250 and 251, were among 11 proposed by the department in its 2017-2022 five year plan. Before the sales, the department prepared three environmental impact statements, or EISs. Firstly, it issued a programmatic EIS tackling the environmental impacts of the five-year plan. Second, it issued a tighter multisale EIS addressing the effects of leasing in the Gulf. Third, it issued a supplemental EIS specific to the two lease sales at issue.

After the sales, three environmental parties alleged that the supplemental EIS did not conform with NEPA. The environmental groups sued the department and the Bureau of Ocean Energy Management, or BOEM, the constituent agency within the department that had arranged the EISs. They claimed that the bureau failed to evaluate a true no action option because it had assumed that energy expansion would occur at some point, even if lease sales 250 or 251 did not.

They also argued that the bureau had irrationally thought two rules for safeguarding the environment would continue in effect, despite the likelihood of future alterations. Finally, they argued the bureau had assumed all such rules would be efficiently administered, despite a report indicating otherwise. Plaintiffs include Earthjustice, the Sierra Club, and Center for Biological Diversity.

In its April 2020 decision, the U.S. District Court for the District of Columbia upheld the bureau’s “no action” analysis finding that the agency reasonably assumed that development was inevitable. The most recent ruling by the Appeals Court found that the Interior Department adequately considered the option of not leasing, reasonably declined to consider potential future regulatory changes, but unreasonably refused to examine possible deficiencies in environmental enforcement and remanded without vacatur to address the shortcoming.

Earthjustice called the ruling a victory following the January 2022 decision by the D.C. District Court that invalidated lease sale 257, holding the department accountable for underestimating the climate impacts prior to making a decision to conduct the largest oil and gas lease sale in U.S. history.