Court: Gulf of Mexico Oil and Gas Leases Invalidated for Flawed Environmental Review

Last Thursday, District Judge Rudolph Contreras ruled that the federal government’s decision to offer 80 million acres in the Gulf of Mexico for oil and gas leasing was not backed by the rigorous environmental review required by federal law. The District of Columbia case, brought by Friends of the Earth, Healthy Gulf, Sierra Club, and Center for Biological Diversity last year, contended that the Bureau of Ocean Energy Management’s (BOEM) analysis, finalized in the closing days of the Trump Administration, failed to take into account the greenhouse gas emissions that would result from the lease sale.

The 68-page opinion explained the case’s relatively complex history, dating back to the transition from the Trump to the Biden administration. Shortly after Biden assumed the presidency, his administration rescinded the decision to hold “Lease Sale 257” in accordance with an executive order pausing new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration.

Louisiana, along with a coalition of other states, filed suit challenging the decision to cancel the lease sale. The district court agreed to preliminarily enjoin the rescission, prompting the environmental groups to file the present action contesting the underlying approval as a violation of the National Environmental Policy Act (NEPA) and the Administrative Procedure Act (APA).

Subsequently, and in the instant suit, Louisiana and the American Petroleum Institute sought and were granted leave to intervene as defendants. All of the parties agreed to an expedited briefing schedule for summary judgment to resolve the purely legal issues after Lease Sale 257 took place, but before the leases were issued. 

Last week’s opinion considered the four cross-motions for summary judgment and partly granted and partly denied each of them. In relevant part, the court adjudged BOEM’s error in its greenhouse gas emissions analysis to be serious. “By excluding foreign consumption from its emissions analysis, BOEM reached a conclusion that was in direct tension with— if not completely contradictory to—its own finding in the very same report that the No Action Alternative would result in a significant decrease in foreign consumption,” the opinion said. 

Over objections by the intervenors, the court found that vacatur would not be overly disruptive and was instead warranted given the timing of decision: after the sale occurred but before the leases were issued. Judge Contreras thus remanded to the agency, affording it “an opportunity to remedy its NEPA error.” The decision specified that the court would neither prescribe a timeframe for starting over with its NEPA analysis nor dictate what conclusion it must reach.

The plaintiffs are represented by Earthjustice, the federal and state actors by their own counsel, and the American Petroleum Institute by Jones Walker LLP.