Federal Court Finds Massive Gulf of Mexico Offshore Oil Sale Illegal, Ruling in Favor of Gulf and Environmental Groups

Yesterday, the D.C. District Court found unlawful a 73-million acre offshore oil and gas lease sale in the Gulf of Mexico held by the Interior Department in March 2023. The court ruled in favor of Gulf-based and environmental groups, which had sued Interior for failing to adequately consider the adverse impacts that Lease Sale 259 would cause to the critically endangered Gulf of Mexico Rice’s whale and on climate change. Plaintiffs also voiced concerns about harms to environmental justice communities from the oil and gas industry and to the Gulf ecosystem, which is home to five of the world’s seven species of sea turtles, from the serious risk posed by oil spills.

The Court ruled that the Interior Department violated the National Environmental Policy Act (“NEPA”) in two key respects. First, it relied on a misleading analysis of the project’s climate impact to implausibly conclude that the sale would result in only minor greenhouse gas emissions. Second, it failed to account for the lease sale’s impact on the critically endangered Rice’s whale, which is only found in the Gulf of Mexico. The Court ordered additional briefing on the question of remedy in light of these serious legal violations.

“Healthy Gulf celebrates the court’s ruling, which holds the Bureau of Ocean Energy Management accountable for failing to fully assess the cumulative impacts of offshore oil and gas lease sale 259.” This includes threats to critically endangered species and increased greenhouse gas emissions,” said Andrew Whitehurst, Water Program Director for Healthy Gulf. “The ruling affirms the need to protect vulnerable Gulf communities, who endure the worst of this unchecked pollution.”

“Today’s ruling is a welcome moment of justice for the Gulf ecosystem and frontline communities who have been burdened by fossil fuel development in the region for decades,” said Earthjustice attorney George Torgun. “The oil industry has been clawing to extend its future, despite the harm that the ongoing development of fossil fuels poses to people, the ecosystems we rely on, and of course the climate. Today, the oil industry lost. Tomorrow, we will continue to fight on behalf of those facing threats to their health and well-being.”

“What a great victory this decision is for Gulf communities and wildlife, who’ve been living in a polluted sacrifice zone for far too long,” said Kristen Monsell, oceans legal director at the Center for Biological Diversity. “Holding this offshore lease sale without properly considering the harm it could cause to animals like Rice’s whales, sea turtles, and the whole Gulf ecosystem is reprehensible. The Gulf has had enough. It’s time to phase out offshore drilling and let the ocean and the climate recover. We’ll keep fighting hard against bad new Gulf drilling projects.”

“We are pleased the court recognized the serious hazards Lease Sale 259 would have inflicted upon Gulf coast communities, as well as the harms it would have caused to Gulf ecosystems and highly imperiled species like the endangered Rice’s whale,” said Devorah Ancel, Senior Attorney with Sierra Club’s Environmental Law Program. “For years, the oil and gas industry has used every trick in the book to extract as much profit from public lands and waters as possible, and coastal communities have paid the price. This ruling holds Big Oil accountable and protects the health of frontline communities.”

“Today’s decision is a significant step forward for Gulf communities and wildlife,” said Hallie Templeton, Legal Director at Friends of the Earth. “If federal officials are going to continue greenlighting offshore drilling, the least they can do is fully analyze its harms. We will keep fighting to put a full stop to this destructive industry, and in the meantime, we will keep a close watch on the government to ensure compliance with all applicable laws and mandates.”

“This decision requires the federal government to take seriously the reality of life in Houston and on the Texas coast, where we increasingly experience disabling climate disasters that make oil and gas development even more dangerous,,” said Kristen Schlemmer, Senior Legal Director at Bayou City Waterkeeper. “We’re heartened by the court’s decision as we continue our fight for a livable future.”

“As the Trump administration embraces a ‘drill, baby, drill’ mentality, now more than ever it’s imperative that the courts continue to uphold the law,” said Julia Forgie, senior attorney at NRDC (Natural Resources Defense Council). “Justice prevailed here, and the Bureau of Ocean Energy Management must fully assess the impacts of this destructive oil and gas lease sale in the Gulf, including harm to critically endangered Rice’s whales. It’s a much-needed win for the environment and for the communities in the Gulf.”

Additional Background

Interior had previously canceled the lease sale, originally scheduled for 2022. However, former Senator Manchin inserted a provision into the Inflation Reduction Act (IRA) that forced Interior to resurrect the sale, along with two similarly canceled sales: Lease Sale 258 in Cook Inlet, Alaska and Lease Sale 261 in the Gulf. Still, the IRA did not exempt the sale from existing laws, like the National Environmental Policy Act, which requires a full environmental assessment of a project’s impacts. Interior also retained full discretion as to how to conduct offshore lease sales, such as restricting the amount of offshore acreage put up for lease, limiting allowable activity on leased acreage, and establishing timetables for drilling activity on a lease.

A separate coalition of groups successfully sued Interior over Lease Sale 258, which a federal court overturned in July. Plaintiffs have filed a similar challenge over Lease Sale 261, which relied on the same flawed review as Lease Sale 259.

While the ruling is a victory for frontline communities in the Gulf and endangered marine life and will support the national climate goals of reducing greenhouse gas emissions by 50%-52% in 2030 and achieving a net-zero emissions economy by 2050, oil and gas companies possess more than 2,300 active leases spanning more than 13 million Gulf acres (though 80% of those leases have yet to be developed). Additionally, the U.S. is already producing more oil than any nation in history and is also the world’s largest producer of gas. And it’son track to keep growing.

The next offshore oil and gas sale, one of three proposed over the next five years, is currently planned for late 2025. Today’s decision means Interior must give greater consideration to impacts on the Gulf ecosystem and global climate before proceeding with that sale — and any future sales.