End the Federal Leasing Pause – Permanently
Posted August 17, 2021
The American Petroleum Institute (API) and 11 other energy industry trade groups filed a lawsuit on Monday in the U.S. District Court for the Western District of Louisiana challenging the U.S. Department of the Interior’s (DOI’s) indefinite pause on oil and natural gas leasing on federal lands and waters.
Following the lawsuit’s filing, DOI said it would resume oil and gas lease sales, even as it appeals a separate court ruling that said its pause on such sales likely violated federal law. Policymakers across the political spectrum agree that President Biden must end the indefinite federal leasing pause once and for all. Only then can America unleash its resource potential and safeguard our decades-long progress toward energy leadership and geopolitical security.
- To put the pause in perspective: energy produced on federal lands and waters accounts for nearly 12% of U.S. natural gas production and nearly one-quarter of U.S. oil production.
- Domestic resource development supports widespread access to affordable, reliable fuels, and this activity generated over $37 billion in royalties, rents and bonus payments to government for the past 5 years.
With the indefinite pause on federal oil and gas leasing, the department failed to satisfy procedural requirements and ignored congressional mandates for holding lease sales. The law is clear: the department must hold lease sales and provide a justification for significant policy changes. They have yet to meet these requirements in the eight months since instituting a federal leasing pause, which continues to create uncertainty for U.S. natural gas and oil producers. As our industry takes action to preserve our legal rights, we will continue working with the Biden administration on policies that support a lower-carbon future while providing access to the affordable, reliable energy our economy needs to recover.
API was joined by the following organizations as co-plaintiffs in the lawsuit:
- American Exploration & Production Council
- Independent Petroleum Association of America
- International Association of Drilling Contractors
- International Association of Geophysical Contractors
- National Ocean Industries Association
- Montana Petroleum Association
- North Dakota Petroleum Council
- Petroleum Alliance of Oklahoma
- Southeast Oil and Gas Association
- Utah Petroleum Association
- Western States Petroleum Association
Federal leasing laws, including the Mineral Leasing Act (MLA) and the Outer Continental Shelf Lands Act (OCLSA), prohibit an indefinite pause on lease sales onshore and offshore. The department’s move to altogether stop holding leases sales is inconsistent with Congress’ intent and circumvents congressional mandates through administrative action. Among other requirements, the MLA requires quarterly onshore lease sales, and the OCSLA directs the expeditious development of resources offshore. The indefinite leasing pause is inconsistent with both statutes.
Under the Administrative Procedure Act, an executive agency is required to provide a record of support and explanation for a change in policy. An agency must also provide an opportunity for public comment when it implements new rules. DOI neglected to meet these requirements.
It is time to end this federal leasing pause for good.
About The Author
Lem Smith is API’s vice president for Federal Relations. Lem joined API in February 2020 as vice president for Upstream Policy & Industry Operations. He previously served as a principal at Squire Patton Boggs, an international law and public-policy firm, where he advised private and public sector clients on federal and multi-state policy matters and provided counsel on communications strategies, campaign affairs and crises management. Previously, Lem was director, U.S. Government & Regulatory Affairs at Encana, and responsible for all aspects of U.S. government relations and regulatory policy matters at the state and federal levels. Prior to that, Lem was director of Government Relations for Kerr-McGee Corporation. Lem began his career on Capitol Hill, working for U.S. Senate Majority Leader Trent Lott, U.S. Rep. Roger Wicker (Mississippi) and the late U.S. Rep. Charlie Norwood (Georgia), where he negotiated key member priorities within the 2005 Energy Policy Act (EPAct). Lem is a graduate of the University of Mississippi.