According to the Federal judge: Bureau of Ocean Energy Management broke the environmental law

The Ruling

Brought against the Department of the Interior, the American Petroleum Institute, and the state of Louisiana, District Judge Rudolph Contreras sent the lease sale back to the Interior Department to decide what to do with it.

The Impact

The Gulf of Mexico lease sale, which sought to open up millions of acres in the Gulf, was launched last November despite efforts by the Biden administration to steer the U.S. energy industry towards renewables and away from oil and gas.

The tender brought in $192 million in winning bids for 307 tracts covering 1.7 million acres. The interest around the sale was significant in part due to the low carbon footprint of the crude extracted from these waters, compared to the higher footprint of foreign plays or U.S. onshore wells.

Past Actions

In January 2021 federal offshore lease sales (257) in the Gulf of Mexico were suspended by executive order, effectively creating a leasing moratorium that hearkened back to the drilling moratorium of 2010. But perhaps the most interesting thing about Lease Sale 257 was that it can be considered the first time that an oil producer, namely ExxonMobil in this case, acquired offshore blocks for the purpose of offshore carbon capture and storage (OCCS) activities.

Bottomline

“Barreling full-steam ahead with blinders on was simply not a reasonable action for BOEM to have taken here,″ Judge Contreras said in his opinion. Expectation is, that lease sale should have more consideration to energy transition and Net-zero, perhaps more acreage for offshore CCS than oil $ gas development