Federal Judge Blocks Gulf of Mexico Drilling Lease Sales over Flawed Impact Analysis

A U.S. federal judge has blocked the sale of oil and gas drilling leases for the Gulf of Mexico after ruling that environmental impact analysis is flawed.

The ruling prohibits the sale of drilling leases across 80 million acres of the Gulf of Mexico.

The judge determine that the environmental review that underpinned the sale was flawed.

In the Jan. 27 ruling (pdf), U.S. District Judge Rudolph Contreras in Washington said that the U.S. Interior Department’s Bureau of Ocean Energy Management (BOEM) failed to accurately assess the impact of the leases on greenhouse gas emissions, which have been linked to climate change.

The ruling vacates BOEM’s Lease Sale 257, which offered around 80 million offshore acres for sale, with around 1.7 million acres sold at auction last November, generating over $190 million in revenue.

The analysis that Contreras objected to found that the climate impact would actually be worse if the leases went unsold because it would lead to a boost in production by foreign oil companies that don’t meet the same high standards as U.S. firms.

Environmental groups sued over the lease sale, challenging the calculations and arguing that “this counterintuitive conclusion is the result of certain erroneous assumptions,” wrote Contreras, calling the assessment an “error” and a “serious failing.”

“By excluding foreign consumption from its emissions analysis, BOEM reached a conclusion that was in direct tension with—if not completely contradictory to—its own finding in the very same report that the No Action Alternative would result in a significant decrease in foreign consumption,” the judge wrote.

“Barreling full-steam ahead with blinders on was simply not a reasonable action for BOEM to have taken here,” he added.

Brettny Hardy, a senior attorney for Earthjustice, one of the groups that challenged the sale, expressed satisfaction with the ruling.

“We are pleased that the court invalidated Interior’s illegal lease sale,” Hardy said in a statement.

“This administration must meet this critical moment and honor the campaign promises President Biden made by stopping offshore leasing once and for all,” Hardy added.

During his election campaign, Democrat President Joe Biden vowed to end federal oil and gas drilling to fight climate change, but efforts to suspend new auctions failed after Gulf Coast states sued.

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The offshore drilling industry expressed opposition to Contreras’ ruling.

“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,” National Ocean Industries Association President Erik Milito said in a statement.

“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,” he added.

Interior Department spokeswoman Melissa Schwartz said in a statement that the agency was reviewing the decision, adding that, “we have documented serious deficiencies in the federal oil and gas program” and that “long overdue” reforms to the program are needed.

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By Nick R. Hamilton

Nick has a broad background in journalism, business, and technology. He covers news on cryptocurrency, traditional assets, and economic markets.

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