Biden Administration Takes Action Restricting Gas, Oil Development After Settlement with Eco Groups

The Biden administration issued new restrictions on gas and oil companies operating in the Gulf of Mexico to protect certain species of whales after it settled last month with an environmental group coalition. 

On Monday, the Bureau of Ocean Energy Management (BOEM), which manages energy development in federal waters, published a Notice to Lessees and Operators (NTL) highlighting expanded protections for the Rice’s whale. These species are listed under the Endangered Species Act. The BOEM was set to issue the NTL last week but delayed it until Monday. 

“This decision by the Biden Administration does an end-around legal requirements and the public process, imposing unwarranted restrictions on U.S. energy production at a time of continued inflation with prices rising at the pump for consumers,” said Erik Milito, National Ocean Industries Association president. 

“The NTL, coupled with the broader Stipulated Stay Agreement, poses a barrier to America’s energy production capabilities within a region that not only sustains hundreds of thousands of high-paying jobs but also yields some of the world’s least carbon-intensive barrels,” continued Milito. “Despite lacking ample scientific evidence to support such extensive bans on operations, the agreement targets the domestic offshore oil and gas industry.”

Milito added that the administration’s agreement with environmental groups ignores the “best science,” which threatens America’s energy independence and contravenes congressional intent under the Inflation Reduction Act. 

Under the NTL issued on Monday, BOEM created a broad new protection zone stretching across the Gulf of Mexico with various new conditions for industry operators. Among the recommendations, BOEM said visual observers that are specially trained should be aboard all vessels traveling through the area, including that all ships, regardless of size, should travel no faster than 10 knots. Vessels should only traverse the area during the daytime. 

The recommendations will be introduced as stipulations to Lease Sale 261 and the upcoming offshore gas and oil lease auction. And BOEM removed an estimated 11 million acres of possible oil-rich lease blocks from that lease sale under its Monday actions. 

“The federal government is moving forward to expand these protections to other ocean users and industries through the proposed designation of critical habitat for the Rice’s whale that will establish a restricted pathway through the entirety of the Gulf of Mexico, imposing disruptions to the full Gulf Coast economy — home to numerous strategic national ports — and reverberating throughout the whole U.S. economy,” said Milito. 

“Among other things, making areas off-limits, imposing speed restrictions, and limiting transit at night and times of low visibility will impact the ability of the offshore energy industry to explore, construct, and develop energy projects in the Gulf of Mexico,” added Milito. “The proposed restrictions would potentially eliminate or hamper safely established and efficient activities in the Gulf of Mexico.”

Federal stay agreement was filed in late July, agreeing to several conditions requested by four eco groups

In a federal stipulated stay agreement filed late in July, the National Marine Fisheries Service (NMFS) agreed to several conditions requested by four eco groups led by the Sierra Club. In response, the groups temporarily decided to pause litigation in the related case. The case dates back almost three years when, in October 2020, the environmental coalition sued the NMFS for not correctly assessing the oil industry’s impacts on threatened and endangered marine wildlife in the Gulf of Mexico. 

They pursued the lawsuit following the NMFS coordinated a multiagency consultation that studies the effects all federally regulated gas and oil activities would have on species listed under the Endangered Species Act over the next 50 years in the Gulf of Mexico. In the original complaint, the groups argued that the NMFS’ biological opinion resulting from its consultation must be based on the most accurate science. 

“Today’s notice from the Bureau of Ocean Energy Management is yet another example of the Biden administration working to restrict American energy, which could lead to higher energy costs and weaken U.S. security,” said the American Petroleum Institute (API) vice president of upstream policy, Holly Hopkins, on Monday. 

“The recommended actions are not justified by existing data nor operational experience, would impose significant burdens on the men and women currently working in the region, and unfairly single out oil and gas traffic in an area that is one of the most used maritime areas in U.S. waters,” continued Hopkins.

According to API, the NTL only targets gas and oil traffic while refraining from restricting vessel traffic related to other industries.