June 13, 2024

Sep. 25—The American Petroleum Institute, the Texas Independent Producers & Royalty Owners Association and two major oil companies have successfully opposed the Biden administration’s late-in-the-day revocation of a substantial part of a 73-million-acre lease sale of oil drilling rights in the Gulf of Mexico.

Saying it wanted to protect the Rice’s Whale at the behest of the U.S. Bureau of Ocean Energy Management, the U.S. Interior Department had reneged on its long-advertised offer of off-shore drilling by withdrawing six million acres from Lease Sale 261.

But U.S. District Judge James Cain of New Orleans issued a preliminary injunction last Thursday saying it was too late in the game for the government to back out. Judge Cain also said the government hadn’t proved that drilling would endanger the whale.

Now seeking a permanent injunction, the Chevron Corp., Shell Offshore Inc., API and the State of Louisiana, backed by TIPRO, applauded the ruling.

API Senior Vice President and General Counsel Ryan Meyers said from Washington, D.C., that he was “pleased that the court hit the brakes on the Biden administration’s ill-conceived effort to restrict the American development of reliable, lower carbon energy in the Gulf of Mexico.

“This decision will allow Lease Sale 261 to move forward as directed by Congress in the Inflation Reduction Act, removing the unjustified restrictions on vessel traffic imposed by the Department of the Interior and restoring more than six million acres to the sale,” Meyers said. “This is an important step toward greater certainty for American energy workers, a more robust Gulf Coast economy and a stronger future for U.S. energy security.”

TIPRO President Ed Longanecker said Monday that the Texas oil and gas industry “is committed to responsible and sustainable energy production and transportation, working on a daily basis to help meet rising demand both at home and around the world.

“The decision to proceed with Lease Sale 261 as originally planned demonstrates the importance of sustained oil and gas production for both our economy and national energy security,” Longanecker said from Austin. “In the first half of 2023 the U.S. led the world in LNG exports, averaging 11.6 billion cubic feet per day and helping to meet the demand of our allies and trade partners abroad.

“This is only expected to increase in the coming months and our Texas ports play a significant role in this effort as the second largest port area in the U.S.,” he said. “The Ports of Texas support over $449.6 billion in economic activity and transport 616.2 million tons of cargo including energy, petrochemicals and agriculture products, making the Texas Gulf Coast responsible for feeding and fueling the world.

“Additionally these ports directly employ nearly 129,000 people and support 1.7 million additional jobs.”

Longanecker said the protection and preservation of the Rice’s Whale “is important to us and oil and gas operators work diligently to limit the impact of operations on surrounding habitats and ecosystems.

“Through the use of innovative technologies our industry is leveraging data analytics, automation and artificial intelligence to drive more efficient and environmentally responsible operations,” he said.

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