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API, Louisiana, Chevron filing challenges BOEM’s ‘lease sale in name only’

API joined with the State of Louisiana and Chevron in filing a challenge to the Department of the Interior (DOI) Bureau of Ocean Management’s (BOEM) Final Notice of Sale for Lease Sale 261. The challenge follows BOEM’s recent announcement to hold the final offshore lease sale mandated by the Inflation Reduction Act, but with significantly reduced acreage and severe restrictions on oil and natural gas vessel traffic.

“Today we’re taking steps to challenge the Department of the Interior’s unjustified actions to further restrict American energy access in the Gulf of Mexico,” said API Senior Vice President and General Counsel Ryan Meyers. “Despite Congress’ clear intention in the Inflation Reduction Act, the Biden administration has announced a ‘lease sale in name only’ that removes approximately 6 million acres of the Gulf of Mexico from the sale and adds new and unjustified restrictions on oil and natural gas vessels operating in this area, ignoring all other vessel traffic. Together with the State of Louisiana and Chevron USA Inc, we intend to use every legal tool at our disposal to challenge these actions.”

Background on the Five-Year Program for Federal Offshore Leasing:

  • For 45 years, the DOI has been required to prepare a five-year offshore leasing program that will best meet America’s energy needs for the ensuing five-year period, detailing a schedule for regular oil and natural gas lease sales, including in the Gulf of Mexico.
  • It has been more than one year since the DOI allowed the five-year program for federal offshore oil and natural gas leasing to lapse with no immediate replacement.
  • The US Gulf of Mexico produces some of the lowest carbon intensity barrels in the world. Constrained production in this basin could be replaced by higher carbon intensity barrels from elsewhere in the world.
  • According to the US EIA, Gulf of Mexico federal offshore oil production accounts for 15% of total US crude oil production and federal offshore natural gas production in the Gulf accounts for 5% of total US dry production.
  • Over 47% of total US petroleum refining capacity is located along the Gulf coast, as well as 51% of total US natural gas processing plant capacity.
  • An agreement announced last month proposed operating “recommendations” that would impose significant burdens on operators and increase emissions from vessels forced to operate at sub-optimal speeds or idle outside the restriction areas.
  • Adopting the nighttime and low-visibility restrictions could cut transit windows to approximately 50%, requiring industry to balance the government’s recommended practices against safely and efficiently servicing ongoing operations.
  • These restrictions would unfairly single out oil and gas traffic in an area that is one of the most used maritime areas in US waters by a variety of industries. Thousands of vessels pass through this area every day.

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