Oil groups have reacted to a court ruling to annul the record of decision for Gulf of Mexico Lease Sale 257, which was described in court papers as “the largest offshore oil and gas lease in U.S. history”.
“This ruling is yet another example of the increasing policy and legal uncertainty that is jeopardizing the future of American energy leadership and leading to greater dependence on foreign energy sources that result in higher emissions,” the American Petroleum Institute (API) SVP of policy, economics and regulatory affairs – Frank Macchiarola – told Rigzone.
“While we are disappointed by the court’s ruling to vacate the only federal oil and gas lease sale offered last year, we urge the administration to implement policies that encourage continued leasing and development in the Gulf of Mexico, which is critical for meeting demand for affordable energy while generating billions in government revenue for conservation programs,” Macchiarola added.
“At a time when demand is outpacing supply and energy costs are a top concern for Americans, we should be encouraging the development of our domestic energy resources, not sending signals that disincentivize U.S. production,” the API SVP continued.
Responding to the ruling, the Independent Petroleum Association of America’s (IPAA) EVP Dan Naatz told Rigzone, “IPAA is disappointed with the court’s decision and hopes the Biden Administration will appeal this misguided ruling,”.
“Offshore oil and natural gas production plays an important role in America’s energy picture and is done in a safe manner that protects the environment. At a time when the world needs the United States to continue to be an energy superpower … [this] decision only clouds the energy picture at home and abroad,” Naatz added.
The Louisiana Oil & Gas Association (LOGA) President, Mike Moncla, said, “Judge Contreras’ decision to ‘throw out’ the last lease sale is disappointing for industry, but even a bigger blow to the American consumer”.
“This administration continues to make decisions that increase energy costs on Americans. In just one year in office, President Biden’s energy policies (or lack thereof) have more than doubled oil, natural gas and gasoline prices,” Moncla added in the statement.
“LOGA will continue to fight for actual policy that puts Americans to work while also providing affordable, reliable, and abundant energy to our nation,” Moncla continued.
Also commenting on the court decision, National Ocean Industries Association (NOIA) President Erik Milito said, “at a time of geopolitical uncertainty and rapidly rising energy prices, U.S. oil and gas production is more important than ever to curb inflation and to fortify our national security”.
“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. Uncertainty around the future of the U.S. federal offshore leasing program may only strengthen the geopolitical influence of higher emitting – and adversarial – nations, such as Russia,” Milito added.
“American investment, jobs, and infrastructure development continue to suffer because of the continued expansion of the bounds of the National Environmental Policy Act by the judiciary. It will be incumbent on the Administration to defend responsible U.S. offshore production and to take the necessary steps, including the development of a new U.S. offshore oil and gas leasing program, to ensure continued leasing and energy production from the U.S. Gulf of Mexico, for the benefit of all Americans,” Milito went on to say.
When the Department of the Interior (DOI) was asked to comment on the court ruling, Melissa Schwartz, a communications director at the DOI, told Rigzone, “as the Department has stated previously, to comply with the injunction imposed in the District Court of Louisiana litigation we were compelled to proceed with Lease Sale 257 based on the previous administration’s environmental analysis and its decision to approve the lease sale”.
“We are reviewing the court’s decision concerning deficiencies in that record … Our public lands and waters must be protected for generations to come. We have documented serious deficiencies in the federal oil and gas program,” Schwartz added.
“Especially in the face of the climate crisis, we need to take the time to make significant and long overdue programmatic reforms. Our work will be guided by the law, science and sound policy. That’s why the President called for a pause on leasing in his Executive Order, and why we are appealing the decision enjoining implementation of the pause,” Schwartz went on to say.
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