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Oil companies sue U.S. over Gulf auction changes meant to protect whale

Published 08/24/2023, 10:48 PM
Updated 08/25/2023, 05:16 AM
© Reuters. FILE PHOTO: Unused oil rigs sit in the Gulf of Mexico near Port Fourchon, Louisiana August 11, 2010.  REUTERS/Lee Celano/File Photo

(Reuters) - An oil and gas industry trade group, the state of Louisiana and Chevron (NYSE:CVX) on Thursday sued the Biden administration over its decision to withdraw acreage from an upcoming oil and gas lease sale in the Gulf of Mexico to protect an endangered whale.

The suit is the latest dispute between the oil and gas industry and the administration of President Joe Biden over leasing federal lands and waters for energy development.

Biden paused federal drilling auctions shortly after taking office in 2021 as part of his climate change agenda, but the year-old Inflation Reduction Act requires that the government hold the Gulf of Mexico lease sale planned for next month.

The lawsuit, filed in federal court for the Western District of Louisiana, comes after the Interior Department's Bureau of Ocean Energy Management on Wednesday finalized plans to conduct the lease sale. The final sale notice included new restrictions on development meant to protect the endangered Rice's whale.

"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," American Petroleum Institute Senior Vice President and General Counsel Ryan Meyers said in a statement.

The Interior Department did not immediately respond to a request for comment.

The new lease stipulations removed more than 6 million acres (2.4 million hectares) originally intended to be offered at the auction and require vessel operators maintain a vigilant watch for the whales and abide by speed restrictions in the whale's habitat.

API argued that the changes were unjustified and unlawful.

© Reuters. FILE PHOTO: Unused oil rigs sit in the Gulf of Mexico near Port Fourchon, Louisiana August 11, 2010.  REUTERS/Lee Celano/File Photo

The changes stem from an agreement earlier this month between federal agencies and environmental groups that sued in 2020 alleging the government did not provide adequate safeguards for the whales. That lawsuit is now paused.

Lease Sale 261 will be held on Sept. 27 and will offer approximately 12,395 blocks on approximately 67 million acres (27 million hectares) on the U.S. Outer Continental Shelf in the Western, Central, and Eastern Planning Areas in the Gulf of Mexico.

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