Offshore Wind Hailed as US Court Vacates Gulf of Mexico Oil & Gas Lease Sale Decision

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The District Court in Washington, D.C., has vacated the Department of Interior’s (DOI) decision to hold an offshore oil and gas lease sale following a lawsuit filed by four environmental groups, which argued that the environmental analysis that the administration relied on to hold the sale was “fatally flawed” and that this lease sale could preclude planned activities to conduct offshore wind lease sales in the Gulf of Mexico.

“Now, the Gulf can be seen as a viable field for offshore wind energy that will power our future”, said Cynthia Sarthou, executive director of Healthy Gulf, one of the four plaintiffs, following the court’s decision on 27 January.

The news comes only several days after the US Bureau of Ocean Energy Management (BOEM), which was one of the defendants in this case, announced that it was preparing a draft environmental assessment (EA) for offshore wind activities in federal waters of the Gulf of Mexico, where the agency is looking to narrow the identified wider area before advancing any Wind Energy Areas (WEAs) for leasing.

The lawsuit against the decision to hold the offshore oil lease sale was filed by Earthjustice on behalf of Sierra Club, Healthy Gulf, Center for Biological Diversity and Friends of the Earth in August 2021, after a Notice of the Lease Sale 257 was issued, offering 80 million acres for oil and gas leasing.

The groups argued that the DOI, BOEM and other ‘federal defendants’ in this case violated the National Environmental Policy Act (NEPA) and the Administrative Procedure Act (APA), and noted that the lease sale could impact offshore wind energy leasing in the Gulf of Mexico.

Citing BOEM’s Request for Interest (RFI) for offshore wind development in the Gulf issued in June 2021, as well as the agency’s active promotion of offshore wind projects, the plaintiffs said selling lease parcels for oil and gas development was incompatible with leasing for wind energy. “Even after oil and gas companies end production, abandoned wells on lease areas create conflicts for the future development of offshore wind or other infrastructure”, they stated in the lawsuit

The Environmental Impact Statements (EIS) BOEM relied on, and which were issued earlier, did not address whether new oil and gas leasing would preclude the ability to construct offshore wind facilities in federal Gulf waters, according to the groups. “These new circumstances were not considered in the Bureau’s previous EISs. The Bureau failed to analyze this significant new information about the effects of additional leasing on the potential for wind energy development before it decided to hold Lease Sale 257″, they added.

Namely, for this lease sale, BOEM published a Determination of NEPA Adequacy in September 2020 that concluded that the analysis in the Program Environmental Impact Statement (EIS), Multisale EIS, and 2018 Supplemental EIS which were issued for the two previous lease sales were sufficient to comply with NEPA and proceed with Lease Sale 257.

The reasoning is in line with a method known as “tiering” in Multisale EIS for multi-step agency programmes such as oil and gas leasing. However, BOEM’s Multisale EIS stated that the agency would supplement its NEPA analysis on a regular basis and that it expected to issue a Supplemental EIS once a calendar year, which the D.C. court pointed out in its decision.

Lease Sale 257 was the eighth offshore sale held under the 2017-2022 National OCS Oil and Gas Leasing Program, for which the Bureau of Ocean Energy Management issued its first Record of Decision in January 2021, during the final days of the Trump administration.

However, just a few days later, President Biden issued an executive order to pause new oil and natural gas leases on public lands or in offshore waters. The order also directed the Department of the Interior to identify steps that can be taken to double offshore wind energy production by 2030. BOEM’s Record of Decision to hold Lease Sale 257 was then rescinded in accordance with that executive order.

Louisiana, along with a coalition of states, challenged that rescission in the court of Western District of Louisiana, which then preliminarily enjoined the Department of the Interior from implementing the pause in new federal oil and gas leasing. While the government’s appeal was pending, it was decided that the federal onshore and offshore oil and gas leasing programme would continue as required by the district court.

BOEM moved forward with Lease Sale 257, issuing another Determination of NEPA Adequacy in August 2021, stating that a supplemental EIS was not required for the sale, and then published a new Record of Decision on 31 August 2021, immediately after which Earthjustice filed the lawsuit.

The challenged lease sale was held on 17 November 2021, when BOEM informed that the Gulf of Mexico Lease Sale 257 generated almost USD 192 million in high bids, according to our sister site Offshore Energy.

During the legal action, the State of Louisiana and the American Petroleum Institute (API) requested and were granted leave to intervene as defendants, alongside the DOI, BOEM et. al. Chevron, which was the apparent high bidder on 34 tracts in that sale, also filed a motion to intervene, but the court denied the oil and gas company’s motion, allowing it leave to file an amicus brief in the case, according to the decision document.

“The court decision holds Interior accountable for grossly underestimating the climate impacts and risks to Gulf communities before deciding to hold the largest oil and gas lease sale in U.S. history. This ruling ensures that waters and coasts will be protected from additional harmful drilling and eventual spills in the Gulf, where the fossil fuel industry is already sitting on 8 million acres of leases on public waters”, Earthjustice stated in a press release.

Cynthia Sarthou, executive director of Healthy Gulf, said: “Today, we can look forward to the day when we stop selling off our public waters for pennies on the dollar when a just transition to a clean energy future is critical to our very survival. Now, the Gulf can be seen as a viable field for offshore wind energy that will power our future”.

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