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A decision by the U.S. Court of Appeals for the Fifth Circuit on November 14 requires the Bureau of Ocean Energy Management (BOEM) to hold Gulf of Mexico Lease Sale 261 before the end of the year, the American Petroleum Institute (API) highlighted in a statement posted on its website.
It also “removes the unjustified restrictions on oil and gas vessels and restores the previously removed acreage,” the API pointed out in in the statement.
The decision follows a challenge filed by the API, the State of Louisiana, and Chevron U.S.A. Inc. to the Department of the Interior (DOI) BOEM’s Final Notice of Sale for Lease Sale 261, “which significantly reduced acreage and included severe restrictions on oil and natural gas vessel traffic,” the API outlined in the statement.
“Energy independence scored an important win … with the Fifth Circuit decision lifting unjustified restrictions on oil and natural gas vessels and restoring acreage for offshore energy development,” Senior Vice President and General Counsel Ryan Meyers said in the statement published on the API’s site.
“The U.S. Gulf of Mexico plays a critical role in maintaining affordable, reliable American energy production, and … [this] decision creates greater certainty for the essential energy workforce and the entire Gulf Coast economy,” he added.
Lease Sale 261 is the final offshore lease sale mandated by the Inflation Reduction Act and is likely to be the only offshore sale scheduled to take place until 2025, the API noted in the statement, adding that in September, the Biden administration issued a proposed final five-year program for federal offshore leasing that included three offshore lease sales over the next five years, “the lowest number of lease sales in the history of the program”.
In a statement sent to Rigzone commenting on the U.S. Court of Appeals for the Fifth Circuit ruling on lease sale 261, National Ocean Industries Association (NOIA) President Erik Milito said, “the court’s ruling is a necessary and positive response to an unwarranted decision by the Biden administration”.
“The removal of millions of highly prospective acres, along with the imposition of excessive restrictions, resulted from a voluntary agreement with activist groups that sidestepped legal processes, disregarded scientific considerations, and neglected public input,” he added.
“The escalating geopolitical tensions and instability in various oil-producing regions emphasize the critical role of the U.S. Gulf of Mexico. To fortify our national security stance, it is essential to champion strength and support U.S. oil and gas production,” he continued.
“Fully leveraging America’s energy production capabilities, especially our offshore resources, is imperative to address some of our nation’s most pressing challenges,” Milito went on to state.
Rigzone contacted BOEM and the DOI for comment on the U.S. Court of Appeals for the Fifth Circuit ruling on lease sale 261 and for comment on the API and NOIA’s statements. While the DOI declined to comment, BOEM has not yet responded to Rigzone at the time of writing.
In a statement posted on its website on November 2, BOEM announced that it was postponing Gulf of Mexico Lease Sale 261, “as a result of the order issued by the United States Court of Appeals for the Fifth Circuit on October 26, 2023, in Louisiana v. Haaland (Case No. 23-30666)”.
“Until the court rules, BOEM cannot be certain of which areas or stipulations may be included in the sale notice,” BOEM noted in the statement, adding that potential bidders in Lease Sale 261 should not submit bids until BOEM provides additional instruction.
“BOEM will hold any bids already received and will hold the sale after it receives further direction from the Court of Appeals,” the organization said in the statement.
Lease Sale 261 was originally scheduled for September 27, then scheduled for November 8, in response to judicial orders, BOEM highlighted in the statement.
To contact the author, email andreas.exarheas@rigzone.com
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