Preliminary Injunction Issued Preventing Ban on New Federal Oil and Gas Leases

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As reported in the last edition of The Climate Report, Alabama, Alaska, Arkansas, Louisiana, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah, and West Virginia (collectively, "Plaintiff States") filed suit in the Western District of Louisiana to enjoin Executive Order 14008 ("E.O. 14008"), entitled "Tackling the Climate Crisis at Home and Abroad." Section 208 of E.O. 14008 instructed the secretary of the interior to "pause new oil and natural gas leases on public lands or in offshore waters" ("Moratorium") while the administration completes a comprehensive review of the leasing program overall. In accord with E.O. 14008, the Bureau of Ocean Energy Management cancelled Lease Sale 257 in the Gulf of Mexico and halted Lease Sale 258 in Cook Inlet, Alaska. Moreover, the Bureau of Land Management postponed or cancelled planned first and second quarter lease sales for federal lands in numerous states throughout the country. Plaintiff States argued in this suit that the "pause" violated the United States Constitution, the Administrative Procedure Act ("APA"), the Outer Continental Shelf Lands Act ("OCSLA"), and the Mineral Leasing Act ("MLA"). In their subsequent motion for a preliminary injunction, Plaintiff States focused on alleged violations of the APA. 

On June 15, 2021, Judge Doughty of the Western District of Louisiana dealt a serious blow to E.O. 14008 by issuing a nationwide preliminary injunction to prevent the implementation of E.O. 14008's oil and gas leasing Moratorium. With respect to the OCSLA, the court reasoned that because a recent case in the Ninth Circuit found that a president does not have specific authority under the OCSLA to revoke a prior land withdrawal, there is "substantial likelihood" that President Biden, similarly, does not have authority to "pause" the offshore oil and gas leasing program. Additionally, in this recent ruling, Judge Doughty determined that the Biden administration likely violated the APA in a number of instances. The court held that because the OCSLA requires lease sales in accord with a five-year plan, and the MLA mandates quarterly lease sales, then the Moratorium would in effect be an instance of the agencies "amending two Congressional statutes … which they do not have the authority to do." Furthermore, the court found that the Moratorium is likely arbitrary and capricious because E.O. 14008 did not provide a rationale or reasoning for the Moratorium. In a similar vein, because the agencies did not hold a notice and comment period prior to the cancelling of the leases, Judge Doughty held that there was a likely violation of the APA. Finally, the court held there was a likelihood that agency action was unlawfully withheld or unreasonably delayed because the OCSLA and MLA required the lease sales to be held, and the appropriate agencies did not have the authority to contravene those mandates.

Another key aspect of the court granting a preliminary injunction is the likelihood of irreparable harm should the injunction not be granted. The court reasoned that the potential damage claimed by the Plaintiff States regarding "loss of jobs in the oil and gas sector, higher gas prices, losses by local municipalities and governments, as well as damage to Plaintiff States' econom[ies]" in addition to the possibility of reduced funding to Louisiana's coastal recovery and restoration program would be "difficult, if not impossible to recover," especially considering the defendants' sovereign immunity.

Ultimately, in considering the final two aspects for a preliminary injunction, the balance of equities and the public's interest, Judge Doughty concluded that Plaintiff States are favored in these regards because the defendants would "simply be doing what they had already been doing" and "statutorily required to do" under the OCSLA and the MLA. In contrast, on the Plaintiff States' side: "Millions and possibly billions of dollars are at stake. Local government funding, jobs for Plaintiff State workers, and funds for the restoration of Louisiana's Coastline are at stake."

The Interior Department indicated it would adhere to the injunction, but did not specify when auctions might resume. It remains to be seen how the litigation over E.O. 14008 will ultimately be resolved, but the grant of this preliminary injunction is a signal that such a moratorium would have to be handled through legislative action, rather than executive action.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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