Biden Admin Likely To Restart Oil And Gas Leases After Federal Court Ruling
Oil wells.
David McNew via Getty Images

The Biden administration is likely to resume new oil and gas drilling leases on federal lands after winning a temporary victory in federal court.

Bloomberg News reported Friday that the Department of the Interior would resume its plans for new oil and gas drilling after a three-judge panel on the Fifth Circuit Court of Appeals issued a stay on a lower court ruling that blocked the administration from using a higher “social cost of carbon” in its environmental analyses.

“With this ruling, the Department continues its planning for responsible oil and gas development on America’s public lands and waters,” Interior Department spokeswoman Melissa Schwartz said in a statement emailed to Bloomberg. “Calculating the social cost of greenhouse gas emissions provides important information that has been part of the foundation of the work the Interior Department has undertaken over the past year.”

The Washington Post reported on the decision Wednesday:

The ruling by the U.S. Court of Appeals for the 5th Circuit stayed an order issued last month by a U.S. District Court judge in Louisiana that prevented agencies from considering the harm climate change causes, known as the “social cost of carbon.” This figure is used across the federal government in rulemaking, from issuing new drilling permits to assessing the growing potential for damage such as crop losses and flood risks.

The decision means that, at least until there’s a ruling on the case’s merits, the Biden administration can continue to consider the economic cost of climate change as it writes new rules, and strengthen existing ones, that could inch the country closer to Biden’s goal of cutting emissions in half by the end of the decade compared with 2005 levels.

A number of energy-producing states and industry groups sued the Biden administration in February over its adjustments to the “social cost of carbon” in its environmental analyses, specifically those that relate to fossil fuel production. According to The Washington Post, Biden dramatically increased the estimated “social cost of carbon” to $51 per ton of carbon dioxide released into the air from between $1 and $7 estimated by the Trump administration. The states and industry groups argued in their lawsuit that the new estimates would cost “hundreds of billions or trillions of dollars” and “may be the most significant regulatory encroachment upon individual liberty and state sovereignty in American history,” Bloomberg reported.

Federal District Judge James J. Cain issued a preliminary injunction blocking the Biden administration from using the higher estimate. Instead of using the lower estimate, the administration responded by shutting down all new oil and gas leases while it appealed the decision. The decision impacted a number of oil and gas leases, including a huge oil lease of some 170,000 acres in Wyoming, as the Post reported.

The Biden administration has repeatedly claimed that its energy policies are not to blame for skyrocketing energy costs for U.S. consumers, arguing that the U.S. has 9,000 unused drilling permits for oil and gas, but industry experts have noted that such a claim lacks context. However, Biden shut down the Keystone XL pipeline on his first day in office, and the administration has previously recommended much stricter regulations for new leases apart from the “social cost of carbon.” Congressional leaders from both parties have criticized Biden for not doing enough to stimulate domestic energy, especially in the wake of the Russian invasion of Ukraine.

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