Court Blocks Biden Administration "Pause" of Oil & Gas Development on Federal Lands

The Biden Administration suffers a significant setback in its efforts to curb fossil fuel development.

A federal judge in Louisiana issued a preliminary injunction today against the Biden Administration's "pause" on new oil and gas leasing on federal lands and in offshore waters.  The court's opinion concluded that the adoption of such a "pause" is likely unlawful, at least in the quick manner used. This is the first major legal setback for the Biden Administration's efforts to curtail fossil fuel development and reduce greenhouse gas emissions. And unless Congress enacts supportive legislation, it will not be the last.

On January 27, President Biden issued an Executive Order on Tackling the Climate Crisis at Home and Abroad directing federal agencies to take measures to reduce greenhouse gas emissions. Among other things, this EO directed the Interior Secretary to pause new oil and gas development on federal lands pending a broader review of federal oil and gas leasing. In March, several states sued to challenge this "pause" on leasing, claiming the Biden Administration failed to comply with the Administrative Procedure Act.

One question in the case was whether there was a "pause" at all. Although the Interior Department has not taken any express action to implement this order, the court found that "no new oil and gas leases on federal lands have taken place" since Biden's January E.O., and multiple planned lease sales have been postponed. On this basis, the court concluded that the Biden Administration has, in fact, paused new oil and gas leasing.

On the legal merits, the court concluded that the Biden Administration acted contrary to the applicable federal statutes, and failed to comply with the APA. From the court's opinion:

The Pause is in violation of both OCSLA [Outer Continental Shelf Lands Act]  and of MLA [Mineral Leasing Act]. As previously discussed, both statutes require the Agency Defendants to sell oil and gas leases. OCSLA has a Five-Year Plan in effect, in which requires eligible leases to be sold. As noted in the previously discussed opinions of the Office of the Solicitor, the Agency Defendants have no authority to make significant revisions in OCSLA Five-Year Plan without going through the procedure mandated by Congress. MLA requires the DOI to hold lease sales, where eligible lands are available at lease quarterly.

By pausing the leasing, the agencies are in effect amending two Congressional statutes, OCSLA and MLA, which they do not have the authority to do. Neither OCSLA nor MLA gives the Agency Defendants authority to pause lease sales. Those statutes require that they continue to sell eligible oil and gas leases in accordance with the statutes. Therefore, the Plaintiff States have a substantial likelihood of success on the merits of this claim. . . .

On the question of APA compliance, the court added:

Neither Executive Order 14008, nor the cancellation of sale of Lease Sale 257, offers any explanation for the Pause (other than to perform a comprehensive review). It also gives no explanation for the postponement of Lease Sale 257, other than reliance on Executive Order 14008. A command in an Executive Order does not exempt an agency from the APA's reasoned decisionmaking requirement. . . .  A decision supported by no reasoning whatsoever in the record cannot be saved merely because it involves an Executive Order. . . .

The court further concluded that the "pause" was not a mere policy statement, but rather a rule subject to the APA's notice-and-comment requirements and that the Interior Department had unlawfully withheld some lease sales in violation of applicable law.

This decision underscores the difficulty of trying to reorient federal environmental policy without congressional cooperation. Agency rulemaking takes time and effort. As Donald Trump discovered early and often in his administration, federal regulatory agencies cannot turn on a dime just because the President says so. Agencies remain bound by legislative mandates and their own preexisting regulations, unless and until such requirements are changed--and changing agency policy can be a laborious, time and resource intensive process--and one that can be checked in the federal courts.