A Court Ruling Could Clear the Way for Biden to Confront Oil and Gas

Environmentalists are hopeful that a recent federal court ruling signals a turning point in President Joe Biden’s efforts to slash carbon emissions from public lands.

The ruling is the latest plot twist in a saga following one of Biden’s signature campaign promises: to address climate change by ending oil and gas drilling on federal lands and waters. A week after taking office, Biden took a significant step toward fulfilling that pledge with an executive order that pushed pause on new federal oil and gas leases—legal contracts that allow companies to later explore and drill. Advocates were thrilled because roughly one-quarter of the country’s carbon emissions come from fossil fuel activity on federal property.

However, the celebration was short-lived; six months later a federal judge ruled that the leasing moratorium was illegal, siding with oil-producing states that had sued the administration. Arguing that the ruling gave it no choice, Biden’s Department of the Interior in November held the largest lease sale in U.S. history, one the Trump administration had already approved in the Gulf of Mexico.

But on January 27, exactly one year after Biden issued his moratorium, another federal judge threw out those leases. Judge Rudolph Contreras found that Interior, under Trump, violated the National Environmental Policy Act by failing to adequately consider climate change when it went ahead with the sale. While the ruling does not affect the more than 10 million acres of leases already active in the Gulf, experts say it has the potential to not only limit the further spread of infrastructure in the pipeline-laden region, but also force a fuller accounting of greenhouse gas emissions in leasing decisions nationwide, bolstering the Biden administration’s efforts to wean the economy off of oil and gas. 

If the previous court decision tied Biden’s hands when it came to fulfilling his campaign pledge, the new one has freed up the administration to take a tougher stance on new leasing, experts say. “One could argue that the government more or less got what it initially wanted,” says Mark Squillace, a natural resources law expert at the University of Colorado Boulder. “This somewhat plays into the government's hands.”

The now-canceled lease sale happened under Biden’s watch and was approved under Trump’s, but it was already in motion as part of a five-year plan for offshore leasing issued by the Obama administration. Out of the 81 million acres of seafloor offered up for drilling, oil companies purchased rights to develop 1.7 million acres for a total of $192 million. 

Environmental groups were outraged. While federal law requires Interior to hold periodic lease sales, activists argued that the department has discretion to limit where and how much acreage, if any, to offer. Adding to activists’ ire, the sale came as the Biden administration was handing out permits to drill on already-leased tracts at a breakneck pace.

“It really was a spectacular failure of climate leadership,” says Kristen Monsell, ocean programs litigation director with the Center for Biological Diversity, among the groups whose lawsuit led to the new ruling. “But by the decision being vacated by the court, it means that the Biden administration has another opportunity to get it right this time.”

In response to the court decision, more than 300 environmental and community organizations, including Monsell’s group, sent a petition this week urging Interior to stop all exploration and permitting on existing leases in the Gulf of Mexico until it can assess how those projects will impact the climate, coastal communities, and ecosystems.

In the latest ruling, Judge Contreras ordered Interior to draft a new analysis that considers emissions in foreign countries from burning oil produced as a result of the lease sale. The previous Trump-era analysis claimed emissions would ultimately be higher without the sale, using a roundabout argument: that other countries with looser environmental regulations would boost their oil production if the U.S. failed to do so. Contreras determined, as judges have in other cases about the Trump administration’s leasing decisions, that the assumption was incorrect. 

The American Petroleum Institute announced Tuesday that it has filed an appeal against the decision. “Today we’re taking action to preserve American energy leadership and ensure that development in the Gulf of Mexico can continue to play a critical role in meeting the nation’s energy needs, while generating billions in revenue for critical conservation programs,” said Frank Macchiarola, a senior vice president of the group in a press release.

Biden’s Interior Department will now have to determine, based on its new analysis, whether to repeat the lease sale, modify it, or scrap it altogether. Meanwhile, three more sales are planned under the current five-year offshore leasing plan: two in the Gulf and one in Alaska’s Cook Inlet. The new court ruling could lead the administration to take a closer look at the climate impact of those sales and of onshore auctions planned in the first quarter of this year for parcels in Montana and North Dakota. As Monsell sees it, the climate impacts from those sales would be so great that Interior could not reasonably decide to move ahead. 

At the same time it is figuring out what to do about these planned sales, Biden’s government is considering broad leasing reforms after Interior released a report in November recommending changes to the oil and gas program, including charging companies more for drilling on federal property. “Our public lands and waters must be protected for generations to come,” said Melissa Schwartz, an Interior spokesperson, in an emailed statement to Audubon. “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.”

How the administration proceeds will have major implications for birds and other wildlife. Scientists say global warming is the most serious threat to birds, with two-thirds of North American birds at risk of extinction from rising temperatures. Oil and gas development also threatens birds and their habitat directly: It’s one of the main ways Greater Sage-Grouse are losing vital habitat across the West, signaling broader degradation of the sagebrush ecosystem, and it threatens sensitive bird breeding areas in the Arctic. In addition, oil spills offshore can be disastrous for birds along the coast.

While many environmentalists have been frustrated to see Interior approve so many drilling permits, the Biden administration—pursuing a goal of halving U.S. emissions by 2030—has taken steps to rein in the industry. It appealed the ruling that the leasing moratorium was illegal, and after more than a year in office, Biden’s government still has not held any onshore lease sales. Last June, Biden suspended the first-ever leases issued in the Arctic National Wildlife Refuge—which Interior had sold just days before the end of Trump’s term—pending a new environmental review.

Now, activists will be keeping a close eye on the administration’s next moves. The current, Obama-issued five-year offshore leasing plan approaches its end date this June, after which its remaining three sales cannot happen—a deadline that Interior looks increasingly unlikely to meet. The Trump administration issued a draft of its own five-year offshore plan in 2018, but never completed it, and Biden has been quiet about his intentions. 

Last month, more than 80 climate and environmental organizations sent a letter calling on the administration to draft an offshore plan that doesn’t include any lease sales. After all, issuing new leases could lead to decades of new oil production at a time when scientists say burning fossil fuels must stop. The recent legal ruling gives Biden more legal support make sure that doesn’t happen.