Oil groups sue Biden administration over leasing pause

Eleven industry trade groups including the Montana Petroleum Association and the American Petroleum Institute filed a lawsuit this week challenging the Biden administration's moratorium on oil and natural gas leasing on federal lands.

"Congress has mandated quarterly mineral lease sales, but the Department of Interior has failed to abide by that mandate," MPA Executive Director Alan Olson said in an Aug. 16 press release about the challenge. "Potential federal leases tied up in this debacle can have the effect of stifling private and state mineral development as well. It is unfortunate that we must take this action to force the federal government to follow the law."

In the release, API Senior Vice President Paul Afonso said that eight months into the pause, which was implemented via President Joe Biden's executive order in January, the Interior Department has failed to satisfy procedural requirements and ignored congressional mandates to hold lease sales.

"As our industry takes action to preserve our legal rights, we will continue working with the Biden administration on policies that support a lower-carbon future while providing access to the affordable, reliable energy our economy needs to recover," Afonso said.

On Aug. 17, the Western Energy Alliance, an industry group that's not party to the lawsuit, distributed a press release condemning the administration for failing to meet a deadline established by the Mineral Leasing Act to hold onshore oil and natural gas lease sales during the current fiscal year.

The group said the failure is evidence that Biden doesn't plan to comply with Western District of Louisiana Judge Terry Doughty's June preliminary injunction against the leasing pause. The group also criticizes the administration for failing to provide detail about its promised review of the federal leasing program.

"We call on the administration to declare a truce with American producers and promise to back off plans to regulate us off federal lands and out of business," WEA President Kathleen Sgamma said in the release.

Montana was a party to the lawsuit that led to Doughty's decision. On March 24, Attorney General Austin Knudsen joined 10 other states in challenging the leasing ban. Doughty granted the states' request for an injunction on June 15.

An Aug. 16 release from the Interior Department said the agency has appealed Doughty's order to the U.S. 5th Circuit Court of Appeals, and that federal onshore and offshore oil and gas leasing will "continue" as required by the Louisiana district court while the appeal is pending.

The Interior Department didn't immediately respond to an email seeking clarification about whether or to what degree its leasing program has been operational since the order was issued. The statement cites the leasing program's contribution to greenhouse gas emissions amid growing climate and community impacts in its decision to appeal Doughty's ruling.

Fossil fuels extracted from public lands and waters account for about one-quarter of the country's greenhouse gas emissions, according to the Interior Department's Office of Natural Resources Revenue. The agency said its position is consistent with its goal of cutting greenhouse gas emissions in half by 2030 and achieving net zero emissions by 2050.

It also said past operations of the leasing program "did not adequately reflect the breadth of the Interior secretary's stewardship responsibilities, including conserving wildlife habitat, protecting historic and cultural resources, ensuring that public lands are available for multiple uses, protecting marine, coastal, and human environments, meeting trust responsibilities to American Indian and Alaska Native tribes, and providing a fair return to taxpayers."

In 2020, the leasing program generated more than $8 billion for federal, state and local governments, according to the Office of Natural Resources Revenue. A study released last December by the University of Wyoming's School of Energy Resources forecast that the moratorium, if enacted, would result in investment losses of $56 million in Montana between 2021 and 2025.