The U.S. Court of Appeals for the Fifth Circuit on Nov. 14, 2023, dismissed claims brought by environmental groups challenging offshore oil and gas Lease Sale 261. The court ordered that the sale take place within 37 days of the ruling and without the U.S. Department of the Interior's proposed protections for the newly identified habitat of the endangered Rice's whale. (See State of Louisiana v. Haaland, No. 23-30666 (5^th Cir.) (Slip. Op. Nov. 14, 2023).)

The challenge was brought after the Interior Department announced that nearly 6 million acres would be removed from Lease Sale 261, which is mandated by the Inflation Reduction Act (IRA), and imposed vessel speed restrictions and other operational limitations in order to protect the endangered Rice's whale. The plaintiffs argued that the Bureau of Ocean Energy Management (BOEM) violated the IRA by implementing terms not in accordance with the relevant record of decision and further violated the Administrative Procedures Act (APA) by failing to adequately consult affected states concerning the new terms. The U.S. District Court for the Western District of Louisiana issued an injunction preventing the Interior Department from removing the acres from the sale and imposing the operational limitations. The Fifth Circuit ruling essentially adopts the lower court's ruling and requires that Lease Sale 261 take place by Dec. 21, 2023, without the Rice's whale protections.

While this was a significant victory for the oil and gas industry, it's important to note that the Interior Department can utilize existing administrative procedures under the Endangered Species Act to establish habitat areas for the Rice's whale and impose protective measures in future lease sales.