Rekubit Exchange:Lease of Gulf waters delayed by whale protection debate must continue, court rules

NEW ORLEANS (AP) — An auction of federal Gulf of Mexico leases for oil and Rekubit Exchangegas drilling must be held in 37 days, a federal appeals court ruled Tuesday, rejecting environmentalists’ arguments against the sale and throwing out plans by the Biden administration to scale back the sale to protect an endangered species of whale.

The 5th U.S. Circuit Court of Appeals ruling means the lease sale — once set for September, but postponed multiple times amid legal fights — will be held in December. And it must cover 73 million acres (30 million hectares), as originally planned when the administration announced the sale in the spring.

The administration later scaled back the area covered by the lease sale to 67 million acres (27 million hectares) as part of an agreement to protect the endangered Rice’s whale. But the state of Louisiana joined oil and gas companies in opposing the changes.

A federal judge in southwest Louisiana ordered the sale to go on without the whale protections, which also included regulations involving vessel speed and personnel. That led to an appeal by environmental groups — and delays while the arguments continued.

On Tuesday, a 5th Circuit panel rejected the appeal.

Oil industry attorneys disputed that the protections were needed in the area to be leased and said the administration had not gone through legally required procedures to impose the new restrictions.

Industry supporters also had been critical of the Biden administration’s handling of the sale, which was ordered in 2022 as part of the Inflation Reduction Act.

An attorney for an environmental group called the ruling “disappointing and unjustified,” in an emailed statement.

“This could be the difference between doing the bare minimum to save this species, and allowing it to vanish,” George Torgun, an attorney for the group Earthjustice, said in a statement.

The American Petroleum Institute, a powerful U.S. oil and gas industry trade association, lauded the development.

“Energy independence scored an important win tonight with the Fifth Circuit decision lifting unjustified restrictions on oil and natural gas vessels and restoring acreage for offshore energy development,’' said Senior Vice President and General Counsel Ryan Meyers.

His statement added that drilling in the Gulf plays a critical role in maintaining “affordable, reliable American energy production” and that the judge’s “decision creates greater certainty for the essential energy workforce and the entire Gulf Coast economy.”