Litigation Thicket Grows on New Oil and Gas Drilling on Federal Lands and Waters

The complicated and multidistrict litigation surrounding new oil and gas drilling on federal lands and waters continues with the U.S. District Court for the Western District of Louisiana's decision to again invalidate President Joe Biden's "pause." The Aug. 18, 2022, decision comes a day after the U.S. Court of Appeals for the Fifth Circuit (Case No. 21-30505) threw out the district court's first attempt to invalidate Biden's "pause" in new drilling on federal lands and waters.

On Jan. 27, 2021, Biden signed Executive Order 14008: Tackling the Climate Crisis at Home and Abroad, which required that "[t]o the extent consistent with applicable law, the Secretary [of the Interior] shall pause new oil and natural gas leases on public lands or in offshore waters," pending the completion of a review of the country's oil and gas leasing policies. Thereafter, 13 states, led by Louisiana, filed a lawsuit in the District Court for the Western District of Louisiana seeking a nationwide injunction on the enforcement of the pause in new oil and gas leases on federal lands and waters.

The district court granted the state's motion for preliminary injunction on June 15, 2021, and the government defendants appealed to the Fifth Circuit. On Aug. 17, 2022, the Fifth Circuit essentially ruled that the preliminary injunction failed to meet the specificity standards of Federal Rule of Civil Procedure 65(d) because the term "pause" in new leases was not defined by the district court, and it was unclear what federal action was being enjoined. The next day, District Judge Terry Doughty issued a more detailed opinion denouncing the U.S. Department of the Interior's "pause" and, for the second time, invalidating Biden's pause on new drilling on federal lands and waters. At the outset, the district court defined the pause in new drilling as a "stop" in new drilling. After concluding that the Outer Continental Shelf Lands Act (OCSLA), which governs offshore oil and gas leasing, and the Mineral Leasing Act (MLA), which governs onshore oil and gas leasing, effectively mandate the Interior to conduct new leasing, the district court concluded that the pause in new leasing violated the Administrative Procedure Act (APA) and that Biden exceeded his Constitutional powers in halting new leasing on federal lands and waters.

With respect to new offshore drilling leases, this litigation, along with Friends of the Earth et al. v. Haaland (CA 21-2317), which invalidated the last offshore oil and gas lease sale, Lease Sale 257, on the grounds that the Interior's environmental review for the lease sale failed to meet the requirements of the National Environmental Policy Act (NEPA), have been superseded by the Inflation Reduction Act (IRA), which mandates that Lease Sale 257 be reinstated and that three additional previously announced offshore oil and gas leases be held by September 2023. (See previous Holland & Knight alert, "Inflation Reduction Act Advances Stalled Offshore Oil and Gas Lease Sales," Aug. 8, 2022.) However, the lasting importance of the Western District's opinion will be the limitations placed on executive branch actions to prevent new oil and gas lease sales on federal lands and waters under the mandatory leasing provisions of the OCSLA and the MLA.

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