{"id":7773,"date":"2022-02-17T14:56:22","date_gmt":"2022-02-17T19:56:22","guid":{"rendered":"http:\/\/blogs.law.columbia.edu\/climatechange\/?p=7773"},"modified":"2022-02-23T15:41:08","modified_gmt":"2022-02-23T20:41:08","slug":"federal-oil-and-gas-leasing-in-the-courts-why-recent-losses-could-actually-be-good-news-for-the-biden-administration","status":"publish","type":"post","link":"https:\/\/blogs.law.columbia.edu\/climatechange\/2022\/02\/17\/federal-oil-and-gas-leasing-in-the-courts-why-recent-losses-could-actually-be-good-news-for-the-biden-administration\/","title":{"rendered":"Federal Oil and Gas Leasing in the Courts: Why Recent Losses Could Actually be Good News for the Biden Administration"},"content":{"rendered":"
<\/div>

By Romany Webb<\/em><\/p>\n

\"\"<\/a>During his campaign for President, Joe Biden promised<\/a> to \u201cuse the full authority of the executive branch to . . . significantly reduce [greenhouse gas] emissions,\u201d including by \u201cbanning new oil and gas permitting on public lands and waters.\u201d Consistent with that promise, one week after taking office, President Biden issued Executive Order 14008<\/a> directing the Secretary of the Interior to \u201cpause new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review.\u201d Over the following weeks, the Department of the Interior (\u201cDOI\u201d) delayed a number of planned lease sales, prompting court challenges from several states and industry. In one of the cases\u2014State of Louisiana v. Biden<\/em><\/a>\u2014a federal court in Louisiana issued a preliminary injection preventing DOI from implementing the pause. The Biden administration has appealed<\/a> the decision but, pending resolution of the appeal, has moved forward with leasing in some areas.<\/p>\n

Last November, DOI\u2019s Bureau of Ocean Energy Management (\u201cBOEM\u201d) held the largest offshore oil and gas lease sale in U.S. history, putting over eighty million acres in the Gulf of Mexico up for sale (in so-called \u201cLease Sale 257\u201d). DOI was, however, again reined in by the courts. In January, in Friends of the Earth v. Haaland<\/em><\/a>, a federal district court invalidated the sale on the ground that BOEM had violated the National Environmental Policy Act (\u201cNEPA\u201d). Several other courts have also recently found problems with DOI\u2019s NEPA review of oil and gas leases. While such court losses are generally viewed as setbacks for the government, they may actually be good news for the Biden administration. In several of the cases, the courts\u2019 reasoning suggests that they make take a more favorable view of future administration moves to stop oil and gas leasing on public lands, at least where those moves are justified as a way of avoiding climate or other environmental harms.<\/p>\n

<\/p>\n

There is little doubt that, if President Biden is to deliver on his campaign promise to end oil and gas leasing on public land, he will have to do it without help from Congress. There have been no significant changes to the laws governing public land leasing since the 1980s. While some in Congress have recently expressed support for limited reforms\u2014e.g., increases<\/a> in the rents and royalties payable under leases\u2014even those proposals have been unsuccessful. The Biden administration will, therefore, be forced to look for ways to end leasing under existing law.<\/p>\n

The law governing oil and gas leasing on public lands differ for onshore versus offshore areas. Onshore, DOI\u2019s Bureau of Land Management (\u201cBLM\u201d) oversees leasing pursuant to the Mineral Leasing Act (\u201cMLA\u201d), which authorizes it to lease public land that is \u201cknown or believed to contain oil or gas.\u201d Under the MLA, BLM must hold quarterly lease sales in \u201ceach State where eligible lands are available.\u201d BLM identifies land that is eligible for leasing in so-called \u201cresource management plans\u201d (\u201cRMPs\u201d). Briefly, RMPs define resource goals for specified tracts of public land, and identify management practices and land uses that are consistent with those goals. Oil and gas leasing can only occur on land that has been designated as suitable therefor in the applicable RMP. Even where land has been so designed, before holding a lease sale, BLM must conduct an environmental review under NEPA, and may also need to complete other reviews or consultations (e.g., under the Endangered Species Act).<\/p>\n

The process for leasing offshore land is equally complex. Offshore leasing is overseen by BOEM under the Outer Continental Shelf Lands Act (\u201cOCSLA\u201d). Under the OCSLA, BOEM must develop \u201can oil and gas lease program,\u201d including a \u201cschedule of proposed lease sales . . . [that BOEM determines] will best meet national energy needs for the five-year period.\u201d BOEM then holds individual lease sales in accordance with the five-year plan. NEPA reviews must be conducted prior to adoption of the five-year plan and again before lease sales are held.<\/p>\n

In January 2017, BOEM adopted<\/a> a five-year leasing plan, under which it proposed to hold ten lease sales in the Gulf of Mexico and one off the coast of Alaska between 2017 and 2022. Seven of the Gulf of Mexico sales were held<\/a> during the Trump administration. In January 2021, just days before President Trump left office, BOEM approved<\/a> an eighth sale (Lease Sale 257). Soon after, President Biden took office and issued Executive Order 14008, calling for a \u201cpause\u201d of new oil and gas leases. BOEM then withdrew<\/a> the approval of Lease Sale 257 \u201cto comply with [the] Executive Order.\u201d BLM also postponed several onshore lease sales, which had been scheduled for March and April 2021.<\/p>\n

Fifteen states and one industry group\u2014the Western Energy Alliance\u2014challenged the leasing pause in federal courts in Louisiana<\/a>, North Dakota<\/a>, and Wyoming<\/a>. In June 2021, in Louisiana v. Biden<\/em>, the U.S. District Court of the Western District of Louisiana issued a nationwide preliminary injunction<\/a>, preventing BOEM and BLM from implementing the pause.<\/p>\n

The court held that the \u201cOCSLA does not grant specific authority to [the] President to pause offshore oil and gas leases.\u201d Thus, according to the court, \u201cthere is a substantial likelihood that President Biden exceeded his powers\u201d when he ordered a pause in Executive Order 14008. The court further held that, by implementing the pause, BOEM violated the OCSLA because that Act requires the sale of offshore leases in accordance with the schedule set in an approved five-year plan and, in the court\u2019s view, BOEM cannot cancel scheduled sales \u201cwithout going through the same procedure by which the five-year plan was developed.\u201d The court similarly held that BLM\u2019s postponement of lease sales violated the MLA because, according to the court, that Act requires BLM \u201cto sell oil and gas leases\u201d and does not give it \u201cauthority to pause lease sales.\u201d<\/p>\n

In reaching these conclusions, the court arguably misconstrued BOEM and BLM\u2019s authority under the OSCLA and MLA, respectively. As the Biden administration has pointed out on appeal<\/a>, the Acts give BOEM and BLM significant discretion to determine when and how to conduct lease sales. For example, under section 18 of the OCSLA<\/a>, BOEM can \u201crevise and reapprove\u201d a five-year leasing plan \u201cat any time.\u201d The section requires \u201csignificant\u201d revisions to be adopted \u201cin the same manner as [the plan was] originally developed,\u201d but leaves it to BOEM to determine what is \u201csignificant.\u201d BOEM has, since the 1980s, taken the view that delaying or even cancelling planned lease sales does not constitute a \u201csignificant\u201d plan revision.<\/p>\n

BLM has similarly broad discretion. Section 17 of the MLA<\/a> provides that public land \u201cmay\u201d\u2014not must\u2014be leased for oil and gas development. While the section does require quarterly lease sales in states \u201cwhere eligible land is available,\u201d again, it is left to BLM to decide when land should be deemed \u201celigible\u201d and made \u201cavailable.\u201d As the Biden administration has noted, the MLA \u201csays nothing about the . . . the amount of land to be leased, and certainly does not mandate the leasing of any particular parcel.\u201d On the contrary, as the Supreme Court has held<\/a>, the MLA gives BLM \u201cdiscretion to refuse to issue any lease . . . on any given tract of land.\u201d<\/p>\n

All of this suggests that the Biden administration could stand a good chance in its appeal of the preliminary injunction. Perhaps more importantly, it also suggest that the Biden administration has authority to go beyond merely pausing lease sales to stopping them.<\/p>\n

A number of scholars (including this author) have argued that BLM could, in compliance with the MLA, avoid making lease sales if it designated land as ineligible for leasing (see, for example, the articles here<\/a>, here<\/a>, and here<\/a>). Of course, BLM would have to provide a reasoned explanation for any designations, lest it be found to have acted in an arbitrary and capricious manner in violation of the Administrative Procedure Act. The courts would, almost certainly, be called upon to judge the adequacy of BLM\u2019s explanation. The decision in Louisiana v. Biden<\/em>, as well other recent cases, suggest that the courts may accept an explanation that is tied to the climate and other environmental harms resulting from leasing.<\/p>\n

Notably, in Louisiana v. Biden<\/em>, the court made clear that it was focused on the legality of BOEM and BLM\u2019s decision to \u201cstop[] or paus[e] lease sale . . . only as a result of Executive Order 14008.\u201d The court emphasized that there is a \u201chuge difference\u201d between that and a decision to \u201cstop or pause a lease sale because the land has become ineligible for a reason such as an environmental issue.\u201d The court suggested, albeit in obiter dicta<\/em>, that BLM and BOEM had authority to do the latter.<\/p>\n

Other courts have similarly held that environmental considerations might justify stopping lease sales. This was most recently recognized by the U.S. District Court for D.C. in Friends of the Earth v. Haaland<\/em>. That case focused on the adequacy of the environmental review conducted by BOEM prior to Lease Sale 257. The court held<\/a> that the review was inadequate because BOEM had arbitrarily declined to consider the impact of changes in foreign oil consumption when comparing the downstream greenhouse gas emissions associated with the lease sale versus a \u201cno action\u201d alternative. The court expressly rejected claims that BOEM \u201cdid not need to consider . . . emissions at [the time of leasing] because it lacks authority under OSCLA to withhold leasing\u201d on climate or other environmental groups (internal citations omitted). The court noted that agencies are not required to \u201cgather or consider environmental information\u201d if they have \u201cno statutory authority to act on that information.\u201d Importantly, however, the court concluded that \u201cBOEM had the ability to cancel Lease Sale 257 on the ground that it would be too harmful to the environment.\u201d<\/p>\n

The relevance of environmental factors to BOEM\u2019s leasing decisions is reflected in multiple sections of the OCSLA. Most notably, section 20 of the OCSLA<\/a> directs BOEM to \u201cconsider available relevant environmental information in making decisions.\u201d Section 20 also makes clear that offshore oil and gas leasing must be balanced \u201cwith protection of the human, marine, and coastal environments,\u201d and section 25<\/a> authorizes BOEM to require changes to lease operations where doing so \u201cwill lead to greater . . . environmental protection.\u201d<\/p>\n

Environmental factors are likewise relevant to BLM\u2019s management of onshore leasing. The Federal Land Policy and Management Act requires BLM to manage public land \u201cin a manner that will protect the quality of scientific, scenic, historical, ecological, environmental, air and atmospheric, water resource, and archeological values.\u201d Consistent with that requirement, when overseeing the use of public land, including for oil and gas leasing, BLM must \u201ctake[] into account the long term needs of future generations\u201d and avoid \u201cimpairment of the . . . environment.\u201d Thus, like BOEM, BLM could refuse to lease public land \u201con the ground that it would be too harmful to the environment.\u201d Whether the bureaus will exercise that authority to impose broader restrictions on leasing remains to be seen.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Romany Webb During his campaign for President, Joe Biden promised to \u201cuse the full authority of the executive branch to . . . significantly reduce [greenhouse gas] emissions,\u201d including by \u201cbanning new oil and gas permitting on public lands and waters.\u201d Consistent with that promise, one week after taking office, President Biden issued Executive […]<\/p>\n","protected":false},"author":2327,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5680],"tags":[68622,68621,9431,9449],"class_list":{"0":"post-7773","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-clean-energy","7":"tag-blm","8":"tag-federal-leasing","9":"tag-nepa","10":"tag-oil-and-gas","11":"czr-hentry"},"yoast_head":"\nFederal Oil and Gas Leasing in the Courts: Why Recent Losses Could Actually be Good News for the Biden Administration - Climate Law Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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