A single ruling by a judge appointed by President Joe Biden could halt oil and gas drilling in the Gulf of Mexico in December.
Judge Deborah Boardman of the U.S. District Court for the District of Maryland, a Biden appointee, Double-sided In August, the administration filed a lawsuit against environmental groups seeking to overturn a key National Marine Fisheries Service (NMFS) environmental review (known as a biological opinion) that was the basis for offshore Gulf of Mexico drilling. Unless the federal government updates the biological opinion by December 20 and there is intervention from a higher court or Congress, the ruling could force a halt to offshore oil and gas drilling, leaving developers to decide whether to continue drilling at their own risk or halt operations until a new review is issued, several energy industry experts and stakeholders said.
“For a single judge to revoke a permit for such good reason puts at risk all other permits issued for good reason in areas where this and other endangered or threatened species live,” David Blackmon, who worked in the oil and gas industry for 40 years and now writes and consults on energy issues, told the Daily Caller News Foundation. “Operators will now have to consider whether they are willing to risk investing millions of dollars of capital in projects that will have their permits revoked at the whim of a judge sympathetic to the radical climate lobby.” (Related: Biden approves natural gas exports, but this may just be a “political tactic” to help VP)
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“Absurd judicial decisions like this one destroy the ability of companies and investors to have confidence in the proper and consistent application of laws and regulations, and threaten to undermine billions of dollars of investment in the United States,” Blackmon added. “Unfortunately, destroying this long-standing U.S. advantage in attracting capital has been a consistent feature of this Administration and the activist judges it supports.”
The Gulf of Mexico is one of the largest oil and gas producing regions in the United States, with the region providing approximately 15% of U.S. crude oil production and 5% of total dry natural gas production. According to If the Gulf of Mexico were a country, it would be one of the 12 largest oil producers in the world, according to the Energy Information Administration. Bloomberg News.
Notably, oil produced in the Gulf of Mexico is less carbon intensive than oil produced in other regions. May 2023 analysis A study commissioned by the National Ocean Industries Association (NOIA) found that oil extracted off the coast of the Gulf of Mexico is 46% less carbon intensive than the global average excluding the United States and Canada.
The central biological opinion, which could be disruptive to the industry, was issued in 2020 and assessed how oil and gas operations might affect protected species living in the region, according to Bloomberg. Regulators typically use biological opinions as a comprehensive analysis rather than evaluating them on a case-by-case basis.
As long as developers follow the biological opinion, federal regulators have approved the “take,” meaning developers are legally allowed to harm or harass a certain number of specific species, industry officials working to resolve the impasse told DCNF. Without a valid biological opinion to limit liability from these take, the Aug. 29 report said, companies “must decide whether to continue operating at their own risk or cease operations until the situation is resolved.” Note Published by major law firm Holland & Knight.
Without a solid biological opinion, regulators responsible for approving development in the Gulf of Mexico would likely have to weigh in on hundreds of different decisions each year, potentially overwhelming them with a mountain of paperwork, industry sources told DCNF. According to Bloomberg, such an outcome could not only disrupt vessels supplying offshore drilling platforms, the operation of existing wells, and future offshore oil and gas development, but it could also cause problems for offshore green energy development. (Related article: Biden Administration finalizes smallest offshore oil and gas leasing schedule in U.S. history as gas prices remain high)
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According to Bloomberg, NMFS has begun the process of compiling a new biological opinion, but it may not be completed until next spring at the earliest.
The agency is “aware of the court's decision.” Sierra Club et al. v. National Marine Fisheries Serviceand [it is] Working together [its] Federal Agency Partners [their] “Next steps,” a spokesperson for the National Oceanic and Atmospheric Administration (NOAA), of which NMFS is a subordinate agency, told DCNF.
Environmental groups suing the government over its biological opinions include the Sierra Club and the Center for Biological Diversity. According to According to Reuters, some industry players, including NOIA and the American Petroleum Institute (API), have intervened in the lawsuit on behalf of the government.
API President and CEO Mike Sommers said on Friday letter He expressed concern to Commerce Secretary Gina Raimondo about the unfolding legal situation in the Gulf of Mexico.
“Without a resolution, this ruling will create a significant bureaucratic bottleneck for the federal government and potentially shut down all oil and natural gas operations in the Gulf of Mexico,” Somers wrote, adding that “this ruling could halt or significantly slow all operations in the U.S. Gulf of Mexico, putting a vital source of energy and economic security at risk.”
Additionally, industry groups and affected businesses have been lobbying to avert the worst-case scenario, and stakeholders are also reaching out to lawmakers' offices seeking a legislative solution, Bloomberg reported, as well as considering legal strategies as a remedy if no immediate solution can be found.
“There should be a high level of concern about the potential disruption of U.S. energy supplies from the Gulf of Mexico,” NOIA President Erik Milito said in a statement to the DCNF. “As things stand, the court order on the Gulf of Mexico energy sector biological opinion could disrupt continued energy development in the region. Such a disruption would likely cause substantial economic and national security harm to our nation… Given the vital importance of the Gulf of Mexico, we are optimistic that calm will prevail and that a long-awaited resolution to this issue will be found, whether through judicial proceedings, regulatory efforts, or congressional action.”
The White House, the Bureau of Ocean Energy Management and the Department of the Interior did not respond to requests for comment. The Department of Justice declined to comment.
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