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Louisiana judge blocks Biden administration’s oil and gas leasing pause

The judge ruled that a pause on new leasing on federal lands harms oil-producing states.

Louisiana Attorney General Jeff Landry is a plaintiff in a lawsuit that led a federal judge in Louisiana on June 15 to block the Biden administration's suspension of new oil and gas leases on federal land and water. (AP Photo/Manuel Balce Ceneta, File)

A federal judge in Louisiana on Tuesday issued a preliminary injunction to block the Biden administration’s policy of pausing the sale of new oil and gas leases on federal land while reviewing how to reform the program.

The ruling by U.S. District Judge Terry A. Doughty, a Trump appointee, was a blow to the Biden administration because reforming the oil leasing program is a key part of its fight against climate change and to try to get more for taxpayers from fossil-fuel development on public lands. The president and his aides had moved swiftly to curb oil and gas development in the past six month, rescinding a permit for the Keystone XL pipeline and suspending drilling leases in Alaska’s Arctic National Wildlife Refuge.

Doughty said that the administration cannot stop leasing without congressional approval and that the fossil fuel-producing states that sued to challenge the Interior Department’s policy have “demonstrated a substantial threat of irreparable injury.”

Biden directed the Interior Department to suspend its leasing program during his first week in office. Interior Department officials had said the leasing hiatus would allow them to conduct a comprehensive review of how the leasing program works and to identify improvements. One of the key issues is whether to increase royalty rates for drilling onshore; those rates have been the same for a century. An interim report on the program is expected this summer.

“Although there is certainly nothing wrong with performing a comprehensive review, there is a problem in ignoring acts of Congress while the review is being completed,” Doughty wrote in his ruling.

Interior Secretary Deb Haaland has called the federal oil and gas program “fundamentally broken” and said that “taxpayers deserve to make the most out of their public lands.” Interior officials have stressed that the review is temporary and that the policy did not affect existing leases.

But the policy was soon challenged in court by several states — including Texas, Utah, West Virginia, Montana and Louisiana — that rely on oil-and-gas royalties.

In response to Doughty’s ruling, Interior Department spokeswoman Melissa Schwartz said in a statement: “We are reviewing the judge’s opinion and will comply with the decision.”

“The Interior Department continues to work on an interim report that will include initial findings on the state of the federal conventional energy programs, as well as outline next steps and recommendations for the Department and Congress to improve stewardship of public lands and waters, create jobs, and build a just and equitable energy future,” Schwartz added.

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Attorney General Patrick Morrisey of West Virginia, one of the states that sued the Biden administration, described the ruling as “the first of many major victories against the Biden administration.”

“For our country’s sake, we must prevail over the Biden Administration’s radical, anti-fossil fuel, China First energy policies,” Morrisey said in a statement.

Oil industry groups called on the Biden administration to restart leases immediately.

“As we emerge from the pandemic and move forward with economic growth, it is more important than ever that we seize the opportunity to produce oil and gas here in the U.S. to help avert potential inflationary risks and proactively ensure affordable energy for all walks of life, especially low-income communities,” National Ocean Industries Association President Erik Milito, whose members include offshore drilling companies, said Tuesday.

Fossil fuels extracted from public lands and waters account for about a quarter of the country’s greenhouse gas emissions. But the program also generated nearly $8.1 billion for federal, state, local and tribal governments last year, according to the Interior Department’s Office of Natural Resources Revenue.

“Millions and possibly billions of dollars are at stake,” Doughty wrote in his ruling. “Local government funding, jobs for Plaintiff State workers, and funds for the restoration of Louisiana’s Coastline are at stake.”

Environmental groups promised to fight the decision and said the Biden administration has the authority to pause the leasing program. .

“The judge’s order turns a blind eye to runaway climate pollution that’s devastating our planet,” Randi Spivak, public lands program director at the Center for Biological Diversity, said in a statement. “We’ll keep fighting against the fossil-fuel industry and the politicians that are bought by them.”