API Sues BOEM over Gulf of Mexico Restrictions

The state of Louisiana, Chevron USA Inc., and the American Petroleum Institute (API) have filed a legal challenge regarding the Department of the Interior Bureau of Ocean Energy Management’s (BOEM) Final Notice of Sale for Lease Sale 261 announced last week, complaining about “severe restrictions on oil and natural gas vessel traffic” and “significantly reduced acreage”, the API said in a statement.

According to the filing with the District Court for the Western District of Louisiana dated August 24, the “BOEM changed the rules and dramatically altered the terms of Lease Sale 261” in its Final Notice of Sale and Record of Decision. Specifically, the BOEM imposed a new lease stipulation “containing burdensome operating restrictions across a newly defined and vastly enlarged ‘expanded Rice’s Whale area’ that more than doubled the size of the former Rice’s whale area and extended it across the entire stretch of the Gulf”, the filing said. Furthermore, the BOEM “withdrew from Lease Sale 261 all the acreage falling within this expanded area”, the filing continued.

The filing states that the BOEM’s “last-minute changes are unlawful several times over” because the new stipulation and acreage withdrawal contravene "the letter and spirit of Congress’ command in the Inflation Reduction Act, which explicitly directed BOEM to conduct Lease Sale 261 in accordance with BOEM’s previously adopted Five-Year Plan for oil and gas leasing—not to introduce substantial new conditions and complications, let alone withdraw millions of acres, at the last minute”.

Further, the challenged provisions also “contravene the Outer Continental Shelf Lands Act’s procedural requirements and implementing regulations, which instruct BOEM to provide notice of the terms of the lease sale in the Proposed Notice of Sale, not radically change them in the Final Notice”, the filing alleges.

Also, the challenged provisions “contravene the Administrative Procedure Act, as they are a wholly arbitrary and capricious departure from BOEM’s prior position without adequate explanation for the change, and otherwise exceed BOEM’s statutory and regulatory authority”, according to the the filing.

The plaintiffs are urging the court to “declare that the challenged provisions are unlawful and vacate just those aspects of the Proposed Notice of Sale and Record of Decision, while otherwise leaving the Sale intact to proceed as directed by Congress”. The court should also declare the challenged provisions as unlawful before the sale proceeds and compel the BOEM to complete the sale on September 27 without the said provisions, according to the filing.

“Today we’re taking steps to challenge the Department of the Interior’s unjustified actions to further restrict American energy access in the Gulf of Mexico”, API Senior Vice President and General Counsel Ryan Meyers said in the statement. “Despite Congress’ clear intention in the Inflation Reduction Act, the Biden administration has announced a ‘lease sale in name only’ that removes approximately 6 million acres of the Gulf of Mexico from the sale and adds new and unjustified restrictions on oil and natural gas vessels operating in this area, ignoring all other vessel traffic. Together with the State of Louisiana and Chevron U.S.A. Inc., we intend to use every legal tool at our disposal to challenge these actions.”

“Once again, Joe Biden is unlawfully attempting to kill both Louisiana jobs and affordable energy for all Americans”, Louisiana Attorney-General Jeff Landry said. “We are yet again taking the President to court, where we trust the rule of law will be followed and Biden’s bureaucrats will be defeated.”

Lease Sale 261 will offer approximately 12,395 blocks on approximately 67 million acres on the USA Outer Continental Shelf in the Western, Central, and Eastern Planning Areas in the Gulf of Mexico, according to an earlier BOEM statement.

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