Court Ends Challenge to Faulty Gulf Lease Sale 257

Today, the D.C. Circuit Court of Appeals dismissed a lawsuit against the Interior Department that was brought by environmental groups challenging Gulf of Mexico Lease Sale 257 — the largest offshore lease sale in U.S. history.  

In January 2022, the D.C. District Court vacated the massive offshore lease sale, ruling that it violated the National Environmental Policy Act (NEPA). During the petroleum industry’s appeal of that ruling, Congress passed the Inflation Reduction Act (IRA). The IRA includes language requiring Interior to issue leases to the bidders from Lease Sale 257. However, nothing in the law excused the lease sale from compliance with federal laws — like NEPA.

Today’s decision means the oil and gas industry will keep the leases it bid on during the lease sale and will have the ability to proceed with oil development on those leases for decades. 

“We’re disappointed by today’s order because Gulf Lease Sale 257 violated the National Environmental Policy Act and should never have happened in the first place,” said Earthjustice attorney Steve Mashuda. “This massive industry handout will take a significant toll on Gulf communities and ecosystems and make addressing the climate crisis increasingly challenging. In light of this, it’s even more important for the Biden administration to limit the climate impacts of the Interior Department’s offshore oil and gas leasing program.”  

In addition to Lease Sale 257, the IRA also required Interior to offer three other lease sales in Alaska and the Gulf that it previously declined to hold. Lease Sale 258, in Alaska’s Cook Inlet, was held in December but received only one bid. Earthjustice is challenging that sale. Earthjustice is also challenging Lease Sale 259, in the Gulf of Mexico, which was held in March. Lease Sale 261, also in the Gulf, will be held by September of this year. 

Despite the IRA’s requirements, Interior retains full discretion as to how to conduct these sales, including the amount of offshore acreage put up for lease, protections for wildlife, timetables for drilling activity, and more. 

So far, the Biden administration has not taken steps to limit oil-and-gas drilling and has rejected alternatives that would result in much smaller climate, ecological, and environmental justice impacts. Continuing to green-light new onshore and offshore oil-and-as development on federal lands and waters in this manner will make it progressively more difficult for the U.S. to meet its own established climate targets. 

Against this backdrop, the Biden administration in September will release its final Outer Continental Shelf Oil and Gas Leasing Program after proposing to hold up to 11 new offshore oil and gas leases over the next five years. The Biden administration should use this opportunity to align its management of public lands and waters with the need to address the climate crisis and should leave the oil in the ground.