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Vista Projects

Biden Fights Bid to Boost Oil Drilling, Climate Goal at Risk

These translations are done via Google Translate
(Bloomberg) President Joe Biden may yet fulfill a campaign promise to slash oil and gas development on federal lands and waters, if an appeals court rejects an effort by 13 states to expand domestic energy production.

The states, led by Louisiana and backed by an armada of industry trade groups, told a three-judge federal panel in New Orleans on Tuesday that Biden had shelved planned sales of drilling rights without the “reasoned explanation” required by law.

“Just a change of administration is not a ‘reasoned’ decision,” Scott St John, Louisiana’s deputy solicitor general, told the court. Officials must “grapple with the findings” prior administrations used to schedule the sales in the first place.

“You can’t come in and say, ‘I’ve changed my mind. The end,’” he said.

Tough on the States

But in their questioning, the judges expressed skepticism that the Biden administration had violated federal leasing statutes.

US Circuit Judge James Graves asked St John if the states weren’t trying to “get ahead of everybody” by pushing for a new five-year leasing program, which is required to auction U.S. coastal waters. St John replied that developing multi-year programs takes extensive planning and that the states had seen no evidence it was underway. The existing five-year offshore leasing program, charted under former president Barack Obama, expires in about seven weeks.

“As a pilot, you’ve got to stay ahead of your airplane,” St John said. “If you’re reacting to where the plane is now, you’ll fly it into the ground.”

Andrew Bernie, a Justice Department attorney, said in defense of Biden’s moratorium that Interior Department officials “have a long history of cancellations and postponements for a variety of reasons.” Every five-year leasing program has included sales that were called off or deferred, he said.

“Under any plausible interpretation, these were temporary postponements of two potential lease sales” offshore and don’t qualify as a “particularly significant revision” that would run afoul of the law, he argued.

At issue is Biden’s January 2021 decision to pause lease sales while Interior Department officials scrutinized the activity’s impact on climate change. The states — energy producers including Texas, Oklahoma and Alaska — are asking the 5th US Circuit Court of Appeals to uphold a lower court’s preliminary order forcing the Biden administration to resume selling the leases. Energy interests say the US can’t afford to curtail the federal development, which collectively provides about a quarter of the nation’s crude oil supply.

In its appeal, the Biden team urged the court to overturn the order.

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Surging Prices

The legal wrangling is unfolding against a backdrop of surging gasoline prices and strained oil supplies, amid high inflation and Russia’s war on Ukraine. The Biden administration is urging energy companies to boost production to help wean European countries off Russian oil and natural gas.

At the same time, Biden remains under pressure to make good on a central campaign pledge to block new drilling permits for public lands and waters. Environmental activists want the president to permanently cancel the auctions.

Read Biden’s executive order on the leasing moratorium here

An appeals court ruling for Biden could be a mixed blessing for the president, who has tried to balance short-term energy needs with long-term climate goals that demand a transition from fossil fuels. New offshore leases can take years to result in production, and the Interior Department isn’t expected to lay out a schedule for selling more of them until June 30. Federal budget documents show the administration doesn’t anticipate offering more oil and gas leases in the Gulf of Mexico until at least October 2023.

The moratorium didn’t directly affect activity on existing leases, with the government continuing to issue drilling permits.

Dual Pressures

In June, the Louisiana-led coalition persuaded US District Judge Terry Doughty, a Trump appointee in that state, to require federal officials to resume drilling auctions while the court challenge plays out. The appeals court panel weighing his order is made up of judges appointed by Obama, Bill Clinton and Ronald Reagan.

Then, after Interior officials resumed selling drilling rights in the Gulf of Mexico in November, environmental groups sued to halt the sales. A Washington-based federal judge in that challenge invalidated the November sale, after finding the government underestimated its climate consequences.

The Interior Department has since cut the available acreage in coming onshore auctions by 80%.

The other states in the case are Alabama, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Utah and West Virginia.

The case is Louisiana v. Biden, 21-30505, 5th US Circuit Court of Appeals (New Orleans).

(Adds context on impact of ruling in third section.)

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