Federal Court Once Again Tells Activists They Can’t Block American Offshore Energy

On Tuesday, the U.S. Court of Appeals for the Fifth Circuit rejected environmental groups’ appeal to effectively ban Lease Sale 261 and mandated the Bureau of Ocean Energy Management (BOEM) to hold an auction within 37 days. The decision is the latest development in the ongoing dispute over offshore leasing in the Gulf of Mexico, and delivered a blow to activists and BOEM, who have repeatedly attempted to block the offshore lease under the guise of protecting the Rice’s whale.  

Notably, this was not the first federal court decision that rejected attempts to limit Lease Sale 261. In September, after the Department of Interior tried to remove six million acres of development area and impose additional restrictions on oil and gas operations, U.S. District Court Judge James Cain barred the DOI from engaging in a “weaponization of the Endangered Species Act (ESA)” and mandated the agency to continue with the lease sale on September 25, 2023. 

However, intervener activist groups, including the Sierra Club, the Center for Biological Diversity, and Friends of the Earth, appealed Judge Cain’s decision. While the Fifth Circuit did initially permit the sale to be delayed, the Circuit Court’s decision on Tuesday hopefully put the debate to rest.   

DOI and Activists Fail to Tie Energy Production to Impact on Rice’s Whale  

In the Fifth Circuit’s decision, Judge Edith Brown Clement noted that DOI and climate activists have provided no substantial proof that offshore energy production in the Gulf will harm the Rice’s whale. In fact, Judge Clement pointed out that BOEM’s own analysis has stated the contrary:  

“[I]n four separate environmental reviews over the last seven years, BOEM concluded that additional protections for the Rice’s whales are unnecessary outside of their “core” habitat in the eastern Gulf—an area unrelated to Lease Sale 261 that has long been protected from oil-and-gas leasing.” (emphasis added) 

Moreover, Judge Clement also explained that even if the habitat of the Rice’s whale overlapped with Lease Sale 261, which has not been proven to be the case, industry would actually need to bid on a block that overlaps with the habitat to create cause for concern. Even still, given that industry is also subject to further environmental reviews before commencing production, effectively blocking six million acres for a situation that could possibly happen is entirely unnecessary:  

“It is not clear that anyone, let alone a Plaintiff here, will even bid on a block within Lease Sale 261 that overlaps with the Rice’s whale habitat—after all, Lease Sale 259 received bids on only 1–2% of the auctioned blocks. Second, the winning bidder would need to commence oil-and-gas activities in the leased area, which takes time and is subject to additional environmental regulation.” 

Industry Groups Celebrate National Security, Economic Benefits 

In the wake of Judge Clements decision, the American Petroleum Institute pointed out the essential role that offshore drilling plays in ensuring economic prosperity, national security, and environmental stewardship:  

“Energy independence scored an important win tonight with the Fifth Circuit decision lifting unjustified restrictions on oil and natural gas vessels and restoring acreage for offshore energy development. The U.S. Gulf of Mexico plays a critical role in maintaining affordable, reliable American energy production, and today’s decision creates greater certainty for the essential energy workforce and the entire Gulf Coast economy.” 

“The U.S. Gulf of Mexico produces some of the lowest carbon intensity barrels in the world. Constrained production in this basin could be replaced by higher carbon intensity barrels from elsewhere in the world.” 

Bottom line: American offshore energy is not only essential to producing the cleanest barrels of oil possible, but it also makes up more than 20 percent of domestic production, provides the United States with more than 370,000 good-paying jobs, and increases national security. And, given that a wider conflict in the Middle East threatens to throw global oil markets into turmoil, there is simply no more time for activists to stall offshore energy production under the guise of issues that have been comprehensively proven to be nonexistent.  

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