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Federal Gulf of Mexico Oil and Gas Lease Sale Delayed Amid Whale Protections Dispute

A federal appeals court has delayed a sale of federal Gulf of Mexico oil and gas leases that had been scheduled for November 8. The delay comes as a result of ongoing court arguments surrounding protections for the endangered Rice’s whale species.

The Biden administration initially announced the lease sale in March and scheduled it for September 27. However, in August, the administration reduced the available lease area from 73 million acres to 67 million acres as part of a plan to protect the endangered whale. The changes also introduced new speed limits and requirements for personnel on industry vessels in certain areas designated for leases.

Oil and gas companies challenged these changes, leading to a federal judge in Lake Charles issuing an order to dismiss the adjustments. In response, the administration appealed to the 5th U.S. Circuit Court of Appeals in New Orleans. The appeals court had initially set the sale for November 8 while the appeal process continued. However, on Thursday, the court issued an order delaying the sale until after the case is argued on November 13.

The Bureau of Ocean Energy Management (BOEM) had introduced the reduced lease area and new rules as part of an agreement with environmental groups to settle a lawsuit aimed at protecting the Rice’s whale.

Several entities, including Chevron, Shell Offshore, the American Petroleum Institute, and the state of Louisiana, filed lawsuits to reverse the acreage reduction and to oppose the inclusion of whale protection measures in the lease sale provisions. They argued that the administration’s actions violated provisions of the 2022 Inflation Reduction Act, which offered incentives for clean energy and created new drilling opportunities in the Gulf.

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Critics of the administration’s policies voiced their concerns at a Senate hearing. Senators John Barrasso and Joe Manchin expressed discontent with the administration’s pace in implementing the required lease sales under the Inflation Reduction Act. Manchin accused the administration of “capitulating” in its settlement with environmentalists, while Barrasso claimed that the administration is working to restrict future offshore lease sales.

The administration faces challenges as it balances the interests of the energy industry and environmental protection. Its recent five-year plan includes three proposed lease sales in the Gulf of Mexico, the minimum required to continue expanding offshore wind development under the 2022 climate bill.

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