Federal oil lease sales delayed as Interior Dept navigates court decisions By Reuters

© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, appearing to run out of space to contain a historic supply glut that has hammered prices, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford/File Photo

By Valerie Volcovici

WASHINGTON (Reuters) – Upcoming federal oil and gas lease sales will be delayed as the Interior Department figures out how to weigh the climate impact of those sales without using a key tool for measuring those risks, according to a court filing issued on Saturday evening.

The length of the delay was not specified, but it stems from a Feb. 11 decision by a Louisiana federal district court judge that blocked the Biden administration from using the “social cost of carbon” – an interim estimate of $50 per ton of greenhouse gases emitted – to factor the risks of climate change into federal decision-making for permitting, investment and regulatory issues.

That decision has complicated the Interior Department’s efforts to comply with a separate court decision by a D.C. federal district court judge in January which invalidated the results of an oil and gas lease sale in the Gulf of Mexico because the department failed to properly account for the auction’s climate change impact.

“Certain activities associated with its [Interior’s] fossil fuel leasing and permitting programs are impacted by the February 11, 2022, injunction in Louisiana v. Biden,” the Department of Justice filing said.

It said the Interior Department had been using the social cost of carbon to factor in the risk of climate change in some of the rules around new lease sales and that “delays are expected in permitting and leasing for the oil and gas programs. 

The administration had been planning onshore lease sales in several states this quarter.

The Biden administration had been considering raising the royalty rate to 18.75% from 12.5% that drilling companies must pay on oil and gas leases, according to a draft notice posted last month.

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by : Reuters

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