The American Petroleum Institute, Chevron U.S.A. and the state of Louisiana are asking a federal court to allow an upcoming sale of oil and gas leases in the Gulf of Mexico to go forward without new restrictions put in place last week by the Biden administration while their legal challenges to the changes plays out.

In papers filed Tuesday, the plaintiffs say an injunction is warranted as their efforts to set aside the administration's cutting the amount of acreage available for leasing and overturning new speed and operating restrictions on vessels involved in oil and gas drilling operations in areas of the Gulf are likely to be successful.

"Plaintiffs...face real and irreparable harm if the challenged provisions remain effective when bids must be submitted, as they will irrevocably affect the bids placed at the upcoming sale, altering the outcome in ways that cannot be undone while permanently depriving the State of Louisiana of potential revenue," according to the request filed with the U.S. District Court for Western Louisiana.

Last week, the administration announced it was reducing the size of the land available for leasing in the Sept. 27 sale from 73.4 million acres to 67 million acres as part of a settlement with environmental groups that had filed suit seeking additional protections for the endangered Rice's whale.

The settlement also puts new speed and operating restrictions on vessels involved in oil and gas drilling operations as new provisions in the lease sale.

API, Chevron and Louisiana sued after the changes were announced, saying they were an arbitrary and unlawful last-minute disruption of a process that included years of planning.

While the Biden administration had earlier paused lease sales in the Gulf, provisions of the Inflation Reduction Act required new sales to move forward.

API officials have accused the administration of using the settlement agreement to thwart Congress' mandate that the sales continue.

Tuesday's filing says the new rules "contravene the Inflation Reduction Act, which explicitly directed (the Bureau of Ocean Energy Management) to conduct Lease Sale 261 in accordance with BOEM's previously adopted Five-Year Plan for oil and gas leasing--not to introduce substantial new conditions and complications, let alone withdraw millions of acres, at the last minute."

As energy interests push to have the sale move forward as originally planned, environmental groups have filed suit seeking to block the Sept. 27 auction, claiming the administration's environmental review of the plan didn't adequately consider the impact of oil and gas extracted from the leases on climate change.


This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.


--Reporting by Steve Cronin, scronin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com


(END) Dow Jones Newswires

08-29-23 1658ET