Energy trade associations are decrying a legal decision by a U.S. District Court judge they say could halt oil and gas operations in the Gulf of Mexico (GoM) before the end of the year.
A Maryland judge reversed a 2020 environmental decision serving as the framework for oil and gas activities in the GoM, potentially putting an indefinite pause on offshore operations pending further regulatory review.
Federal Judge Deborah Boardman, an appointee of President Joe Biden, vacated a 2020 Gulf of Mexico Biological Opinion (BiOp) in an opinion filed on Aug. 19 in the U.S. District Court for the District of Maryland. Boardman’s decision cited violations of the Endangered Species Act and the Administrative Procedure Act due to a failure to fully analyze the jeopardy of certain species’ populations and the impact of oil spills.
With the 2020 BiOp vacated, offshore oil and gas activities in the GoM will be shut down on Dec. 20, unless a regulatory or legislative solution comes through to prevent a gap before new rules are created, according to a statement released by the energy trade groups.
“This would include those with past leases at the time the 2020 opinion was issued, regardless of when the lease was awarded, in addition to actions associated with new leases through approximately 2030,” the energy groups said.
Environmental organizations Sierra Club, Center for Biological Diversity, Friends of the Earth and Turtle Island Restoration Network filed the lawsuit nearly four years ago, claiming the National Marine Fisheries Service’s 2020 biological opinion was flawed.
“The court’s ruling requires the National Marine Fisheries Service to fix its flawed analysis of the effects of offshore fossil fuel development on endangered whales, rare turtles and vital Gulf of Mexico ecosystems upon which these species’ survival depends,” Sierra Club Senior Attorney Devorah Ancel said in an Aug. 20 response to the ruling. “Now the agency has a chance to get the biological opinion right and properly evaluate the devastating impact offshore drilling and exploration has.”
The American Petroleum Institute, EnerGeo Alliance, National Ocean Industries Association and Chevron U.S.A. Inc. intervened in the case as defendants representing the oil and gas industry.
U.S. energy trade organizations, including the Energy Workforce & Technology Council, slammed the decision. Energy Workforce President Tim Tarpley called it a “grave threat to America's energy security and economic prosperity.”
Also participating in the Sept. 10 response were the Independent Petroleum Association of America, U.S. Oil and Gas Association, National Ocean Industries Association, Western Energy Alliance and the International Association of Drilling Contractors.
GoM federal offshore accounts for 14% of total U.S. crude oil production and GoM federal offshore natural gas production accounts for 5% of total U.S. dry production, according to the U.S. Energy Information Administration.
Halting production would negatively affect energy prices and national security and increase inflation, Tarpley said.
Jason McFarland, president of the International Association of Drilling Contractors, said the December deadline was “woefully inadequate” for finding a solution. Rushing the process through Congress and the National Marine Fisheries Service to conduct a thorough review would compromise both environmental protections and energy security, he said.
In Boardman’s ruling, she said the mid-December date was an “appropriate balance between the importance of getting this unlawful agency action off the books and the public interest in a predictable, managed transition to a new biological opinion.”
If the National Marine Fisheries Service does not have a new biological opinion by that date, the 2020 BiOp will still be vacated, Boardman said.
The National Oceanic and Atmospheric Administration told Hart Energy it was aware of the court’s ruling.
“We are working with our federal agency partners on our next steps,” Andrea Wasilew, a public affairs officer with the NOAA, said in a Sept. 11 email.