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Federal Appeals Court says Trump Gulf Lease Sale was illegal but allows drilling to continue.

A federal appeals court has ruled that former President Donald Trump’s administration unlawfully auctioned off large areas of the Gulf of Mexico to oil companies during two lease sales in 2018. The D.C. Circuit Court of Appeals decided on Tuesday that federal regulators failed to properly consider the environmental impacts of oil production on the lease areas, which cover about 150 million acres in the Gulf. The ruling doesn’t halt oil production in the contested areas, but it does send the lease sales back to the U.S. Interior Department for reconsideration and possible mitigation measures and limits on drilling. It’s unclear how long that process will take, giving the oil companies months or years to continue operating as they have since they acquired their leases. Nonetheless, environmental groups are claiming victory. “The federal government’s been allowing more leasing and more drilling without considering the risks from oil spills or to our climate,” said Kristen Monsell, a litigation director for the Center for Biological Diversity, one of four environmental groups that challenged the auctions. “Now the Interior Department will have to go back to the drawing board and do a more robust analysis of the risks.”

The lawsuit charged that the leases were not fully vetted on environmental requirements.

The groups’ lawsuit asserted that the 2018 sales relied on faulty evaluations that wrongly presumed that federal regulators were adequately enforcing safety and environmental regulations. The lawsuit stressed that inadequate regulation contributed to BP’s Deepwater Horizon oil disaster in 2010 and increases the risk of similar catastrophic spills. In 2020, the D.C. federal court ruled the sales were valid. The groups appealed, resulting in this week’s decision. In the decision, Judge Gregory Katsas, a Trump appointee, wrote that federal regulators had “sidestepped” a government audit that raised concerns about outdated drilling policies and weak enforcement tools. Regulators “offered only unelaborated statements that (federal) enforcement was ‘rigorous,’” he wrote. “In the circumstances here, that was not good enough.” Katsas made clear that the decision shouldn’t immediately force oil companies to give up their leases or halt production. “They have paid millions of dollars to obtain their leases and have acted for some four years in reliance on them – including by investing substantial additional sums and by executing contracts with third parties,” he wrote.

This decision is the second one that concurs that they lease sale did not look at environmental matters.

The decision follows a January ruling by the D.C. District Court that invalidated a large Gulf lease sale because it underestimated its climate impacts. Environmental groups say the twin rulings will force federal regulators to rethink offshore oil and gas regulations, a move that will likely result in new rules limiting the industry in the Gulf. 

Two court cases and the same decision makes the government go back and reevaluate with tougher requirements.

Mixed message from court on Gulf leases
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