A preliminary injunction issued June 15, 2021, means that the court sided with more than a dozen states, including Louisiana, that sued after President Joe Biden directed the administration to not issue new leases for oil and gas drilling in offshore waters and on public lands. The pause was meant to allow officials to conduct an environmental and financial review of leasing practices. The decision by the US District Court for the Western District of Louisiana is a temporary order while the lawsuit is ongoing.
The court found that the current administration likely exceeded its authority by ordering the pause. The administration may be required to follow a schedule of lease sales set by the Obama administration. The states argued they would lose out on payments such as royalties if the sales are not held.
In the ruling, Judge Terry Doughty of the U.S. District Court for the Western District of Louisiana said the states had met the requirements to establish that they would suffer injury from the pause on new oil and gas leases.
“Millions and possibly billions of dollars are at stake,” Doughty wrote. He further stated that the States had a “substantial likelihood of success” with their lawsuit.
The pause, issued in January of 2021, fulfilled a campaign promise by Biden, applied to federal land and water areas, but didn’t affect existing leases. The Interior Department said it would comply with the ruling but did not say when auctions might resume.
The nation’s top oil and gas trade group, the American Petroleum Institute, issued a statement urging the administration “to move expeditiously to follow the court’s order and lift the federal leasing pause.”
The attorneys general of both Louisiana and West Virginia praised the decision. Louisiana Attorney General Jeff Landry called it “a victory not only for the rule of law but also for the thousands of workers who produce affordable energy for Americans.”
The judge’s decision, which applies to onshore and offshore leasing nationwide, will remain in effect pending the final resolution of the case or orders from higher courts, according to a court document.
Additionally, the judge ruled that two existing laws, the Outer Continental Shelf Lands Act and the Mineral Leasing Act, require the Department of Interior to hold periodic lease sales of available land for oil and gas production, which the department has not done since the beginning of this Administration.
Knezek Law stays up to date with oil and gas regulations in order to be able to best serve our clients in the industry. For information on how this will affect your business, contact one of our experienced attorneys.