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A federal judge canceled major oil and gas leases over climate change

The ruling revokes leases sold in the Gulf of Mexico in the largest oil and gas lease sale in U.S. history. It says the Interior Department failed to consider the greenhouse gases it would produce.

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A man fishes near docked oil drilling platforms in 2020 in Port Aransas, Texas. A federal judge has revoked oil and gas leases sold in the Gulf of Mexico in November, saying the Interior Department did not take into account its impact on climate change.
A man fishes near docked oil drilling platforms in 2020 in Port Aransas, Texas. A federal judge has revoked oil and gas leases sold in the Gulf of Mexico in November, saying the Interior Department did not take into account its impact on climate change. Eric Gay | AP

Late last year, just days after pledging to cut fossil fuels at international climate talks in Glasgow, Scotland, the Biden administration held the largest oil and gas lease sale in U.S. history.

On Thursday, a federal judge invalidated that sale in the Gulf of Mexico, saying the administration didn't adequately consider the costs to the world's climate.

The administration used an analysis conducted under former President Donald Trump that environmental groups alleged was critically flawed.

The decision represents a major win for a coalition of environmental groups that challenged the controversial sale, calling it a "huge climate bomb."

Eighty million acres — an area twice the size of Florida — were put up for auction in November.

Climate groups urged the Biden administration to stop the sale, but the Interior Department said it was compelled to move forward after a different federal judge struck down the administration's temporary moratorium on new oil and gas lease sales. Oil and gas companies only ended up bidding on 1.7 million acres in the Gulf of Mexico.

Those leases will be vacated by the U.S. District Court of the District of Columbia's decision, and the Interior Department will have to conduct a new environmental analysis if it decides to hold another sale.

"We are pleased that the court invalidated Interior's illegal lease sale," said Earthjustice's senior attorney, Brettny Hardy. "We simply cannot continue to make investments in the fossil fuel industry to the peril of our communities and increasingly warming planet."

The development and consumption of fossil fuels is the largest driver of climate change. The world has already warmed by more than 1 degree Celsius since preindustrial times, worsening wildfires, hurricanes and heat waves, and disrupting the natural world.

Roughly a quarter of the country's total greenhouse gas emissions come from fossil fuels extracted from public lands.

The Biden administration has promised to review the country's oil and gas leasing program to better account for its contribution to climate change.

Shortly after taking office, it temporarily blocked all new oil and gas leasing on public lands while it conducted its review, but the moratorium was struck down after being challenged by more than a dozen Republican-led states.

Scheduled lease sales resumed after that decision, including the massive sale in the Gulf, which elicited nearly $200 million in bids.

The climate impact analysis used by the Biden administration was actually conducted under Trump. It argued that not leasing the acreage would result in more greenhouse gas emissions because it would increase fossil fuel production abroad.

U.S. District Judge Rudolph Contreras wrote that the Interior Department acted "arbitrarily and capriciously in excluding foreign consumption from their greenhouse gas emissions," adding that the "error was indeed a serious failing."

"The U.S. offshore region is vital to American energy security and continued leases are essential in keeping energy flowing from this strategic national asset," said Erik Milito, president of the National Ocean Industries Association, in a statement.

The Biden administration could choose to do a new analysis and put the section of the Gulf of Mexico up in another lease sale. Environmental groups would be waiting.

"The fight is not over," said Hallie Templeton, legal director at Friends of the Earth. "We will continue to hold the Biden administration accountable for making unlawful decisions that contradict its pledge to take swift, urgent action on 'code red' climate and environmental justice priorities."

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Transcript :

STEVE INSKEEP, HOST:

Wow. A federal judge said yesterday that the largest sale of oil and gas leases in U.S. history was illegal. The lease sale was held in the Gulf of Mexico last November. It was the first under the Biden administration. And now the court ruling says the U.S. failed to account for the eventual climate impacts of drilling all that oil. Nathan Rott of NPR's climate team is covering this story. Hey. Good morning.

NATHAN ROTT, BYLINE: Hey. Good morning, Steve.

INSKEEP: It's interesting that climate came up here. President Biden, of course, wants to aim for a carbon-free future, although he's said that fossil fuels, of course, are being used for the moment. Why did they hold this big sale in the first place?

ROTT: Well, I mean, that's the question that a lot of environmental and climate groups were asking when it happened. You know, remember, this lease sale occurred just days after the international climate summit in Glasgow, where Biden said the U.S. was back at the climate table. And it pledged to reduce the country's outsized contribution to climate change. The Interior Department administration argued that it had to proceed with this sale because of a different federal judge's decision last summer. Right after taking office, Biden had put a temporary moratorium on new oil and gas leases on public lands. But more than a dozen Republican-led states sued and won, putting this lease sale back on the books in November.

INSKEEP: Oh, interesting. So the administration lost a case from somebody on the other side of the climate debate, effectively. And so they went ahead with the sale. But I'm still trying to figure out why this would be a matter of law. It seems like a matter of policy whether you want to have a carbon-free future. So why would a federal judge now say the lease sale was illegal?

ROTT: So environmental groups sued right after this lease sale was finished, basically arguing that the environmental analysis that the Biden administration was relying on for this sale, an analysis that was conducted under former President Donald Trump, was flawed. Basically, the analysis argued that not leasing the acreage in the Gulf would lead to more greenhouse gas emissions because it would cause more fossil fuel development in foreign countries. The federal judge in D.C. said that that decision was arbitrary and capricious last night because it didn't consider the down-the-road impacts of the fossil fuels pulled from the Gulf.

INSKEEP: Oh, this is really interesting, Nate, because this is something that oil industry supporters have been saying a lot. We do oil and gas better, more efficiently, more cleanly than other places. And so we are the ones who should do it, and it's better for the environment if we drill for oil.

ROTT: Exactly.

INSKEEP: OK. But in any case, the judge was skeptical of that. So what happens now?

ROTT: Well, so right now, the Department of Interior could decide if they want to go ahead, and they want to hold another lease sale down the road. If they wanted to do that, they're going to have to redo the math. And environmental groups are pretty sure that that won't work out.

INSKEEP: Well, how is the oil and gas industry responding to all of this?

ROTT: They're not happy. You know, they say that the Gulf of Mexico is a strategic national asset. It's important to the U.S. desires to be, you know, energy independent. That's their words. They're pressing the administration to continue leasing. And there are some onshore lease sales planned for the first quarter of this year in North Dakota and Montana.

INSKEEP: OK, that's interesting. But let's just review here. The administration didn't want to do this lease sale, got sued, had to do the lease sale, then got stopped in another lawsuit. Could this, in the end, actually help the administration meet its goal of reducing carbon emissions?

ROTT: You know, it'll have an impact, for sure. Roughly a quarter of the country's total greenhouse gas emissions come from fossil fuels developed on public lands. But, you know, it's just a small sliver compared to the entire emissions. And if we're aiming to be carbon neutral by 2050, we still have a very long way to go.

INSKEEP: NPR's Nathan Rott, thanks for the insights. Really appreciate it.

ROTT: Yeah, thank you.

(SOUNDBITE OF GODTET'S "CACTUS DANCE") Transcript provided by NPR, Copyright NPR.

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