Stay informed with free updates
Simply sign up to the Oil & Gas industry myFT Digest — delivered directly to your inbox.
The US oil and gas industry is suing the Biden administration over its decision to severely restrict offshore drilling amid a growing industry backlash against its climate and energy policies.
But in a sign of the political tightrope policymakers must walk when
rulemaking in the US climate and energy sector, climate campaigners also sued the government over the same policy.
The lawsuit from the American Petroleum Institute, a lobby group, accused the US government of using “every tool at its disposal” to restrict access to resources in federal waters. It said it needed to act to prevent consumers from having to rely on foreign supplies and safeguard their energy security.
In September the US interior department unveiled plans to hold just three offshore lease sales in the Gulf of Mexico from 2025 to 2029 in a blow to producers’ ambitions in the oil-rich region. The record-low number of planned sales in nearly a half century of federal offshore leasing was a fraction of those in an original proposal for 47 made under former president Donald Trump.
The decision was slammed by the industry, which lobbied hard to gain greater access to the Gulf of Mexico. But it was also criticised by environmental campaigners, who called it a “missed opportunity” to minimise future drilling.
Federal waters of the Gulf account for about nearly 2mn barrels a day of crude oil production, or about 15 per cent of total US production that has recently been hitting records.
“In issuing a five-year programme with the fewest lease sales in history, the administration is limiting access in a region responsible for generating among the lowest carbon-intensive barrels in the world, putting American consumers at greater risk of relying on foreign sources for our future energy needs,” said Ryan Meyers, API’s general counsel.
API filed its petition to the US Court of Appeals for the District of Columbia Circuit. Alleging it was “arbitrary, capricious and not in accordance with the law”, the lawsuit asked the court to review the administration’s decision under the Outer Continental Shelf Lands Act. The interior department declined to comment.
Separately, environmental groups argued in their own legal action that the Biden administration failed to adequately consider the public health impacts on frontline communities by approving lease sales.
Earthjustice, an environmental group, said it is concerned the lease sale programme would jeopardise the health of already overburdened communities.
“The oil and gas industry is already sitting on 9mn acres of undeveloped leases. They certainly are not entitled to more,” said Brettny Hardy, an Earthjustice attorney.
The cases come amid an increasingly bitter conflict between the industry and the Biden administration over the latter’s recent pause on approvals for new terminals for liquefied natural gas exports, as it reviews considerations such as greenhouse gas emissions and domestic energy costs.
The administrative actions on offshore drilling and LNG come ahead of this year’s election, where President Joe Biden is appealing to climate-conscious voters in order to block Trump, his most likely challenger, from gaining office and tearing up his climate policies.
If elected, Trump has pledged to undo the pause on LNG approvals in his first week back in office.
Climate Capital
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here
