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![handle is hein.crs/govefxt0001 and id is 1 raw text is: August23, 2021
Offshore Oil and Gas: Biden Administration's Pause on New
Leasing
On January 27, 2021, President Joe Biden is sued Executive
Order (E.O.) 14008, directing multiple administrative
actions to address climate change. Section 208 of the order
directed the Secretary ofthe Interior to pause new oil and
naturalgas leases on public lands orin offshore waters
pending completion of a comprehensive review and
reconsideration of Federal oil and gas permitting and
leasing practices, ... to the extent that such actions are
consistent with applicable law. The E.O. stated that the
review must evaluate potential climate and other impacts
as sociated with oil and gas leasing, as well as whether to
adjust royalties paid to the federalgovernment from
onshore and offshore oil and gas production to account for
climate costs.
As implemented by the Department of the Interior (DOI),
the leasing pause has consis ted of a halt on sales of new
onshore and offshore oil and gas leases for an undefined
period, during which exploration and development of
existing leases are allowed to continue. Some stakeholders
have asserted that thep ause could have significantlong -
term impacts for oil and gas investment, production, and
revenues, while others have asserted thatit would have few
impacts given that activities on existing leases are
continuing.
Status of Leasing Pause and Review
On June 15, 2021, in response to a lawsuit filed by multiple
state attorneys general, the U.S. District Court for the
Western Dis trictof Louis ian ais s ued a preliminary
injunction (-F. Supp. 3d-, 2021 W L 2446010 [W.D. La.
June 15, 2021]) prohibiting DOI from implementing the
leasing pause with respect to both onshore and offshore
lease sales thatthe agency had temporarily halted. The
court found, among other things, that DOIhad acted in an
arbitrary and capricious manner, in violation ofthe
Administrative Procedure Act (5 U.S.C. § §551 et seq.), by
halting the lease sales solely on the basis ofthe E.O.
On August 16,2021, DOI is sued a press release announcing
an appealof the preliminary injunction and announced that
the department would proceed with leasing consistent with
the district court's injunction during the appeal. DOI did
not give specifics as to whenp aused lease sales might
proceed. DOI statedthatit would conduct suchleasingin a
manner that takes into account theprogram's many
deficiencies.
Although DOIis enjoined fromeffectuating the leasing
pause directed by the E.O., it has initiated thepolicy review
also mandated by the order. With regard to the review, the
court decision stated that there is certainly nothingwrong
with performing a comprehensive review, although there
is a problemin ignoring acts of Congress while the review
is being completed. On March 25, 2021, the department
held an online forumto gather oral feedback to informthe
review. DOI also solicited written feedback, and
departmentalofficials stated in May that they hadreceived
more than 100,000 written comments. DOI announced th at
an interimreport is due to be completed in summer2021.
On August 16, 2021, DOI announced thatit was continuing
to review the program, including preparing areport.
Offshore Lease Sales Affected by the
Pause
Pursuant to the E.O., DOI's Bureau of Ocean Energy
Management (BOEM) postponed two lease sales previously
scheduledunder the agency's five-year oil and gas leasing
programfor 2017-2022. BOEM indefinitely paused Lase
Sale 257 in the Gulf of Mexico, scheduled for March 17,
2021, in response to the order. Lease Sale 258 in Alaska's
CookInlet, also slated for2021 underthe five-year
program, had been in the early stages of planning and was
paused indefinitely. Also, BOEM has made no
announcements and initiated no planning regarding Lease
Sale 259, a secondleasesale planned for the Gulf of
Mexico later in 2021.
How the E.O.'s required review ultimately may affect any
paused lease sales is unknown. Forexample, the review
might or might not lead to changes in lease terms such as
rental and royalty rates for these sales going forward.
BOEM has discretion to regulate lease terms under the
Outer Continental Shelf Lands Act (OCSLA, 43 U.S.C.
§ § 1331-1356b) and other authorities. BOEM also has, in
the past, cancelled some lease sales that were scheduled in
five-year programs basedon environmentalreviews of
those prospective sales under the National Environmental
Policy Act (NEPA, 42 U.S.C. § §4321 et seq.).
N ew Five-Year Leasng Program
BOEM's current five-year offshore oil and gas leasing
programends in June 2022. Typically, preparation of a new
programtakes two to three years. During the Trump
Administration, BOEM released a draft of a new five-year
programand soughtpublic comment. The Biden
Administration could continue to work fromthis draft
programor could begin anewprocess.
It is unclear how the E.O. may affect BOEM's work on the
next five-year program. Although theE.O. calls for a pause
on new oil and gas leases, BOEM is required by the
OCSLA to prepare a five-year program. One possibility is
that BOEM could undertake some aspects ofthe E.O.'s
required review in the context of the economic and
environmental as sessments conducted for the five-year](ViewImageLocal?handle=hein.crs/govefxt0001&div=1&collection=&method=preview&ext=.png&size=3)