Industry group challenges oil and gas lease moratorium in federal court

PROMO Energy - Oil Pump Rig - iStock - Karina Movsesyan
Published Thursday, January 28, 2021
by Derek Draplin | The Center Square

(The Center Square) - An industry group representing energy companies across the west on Wednesday filed a complaint in federal court challenging President Joe Biden's executive order that halts new oil and gas leases on federal land.

The Denver-based Western Energy Alliance's complaint, filed in the U.S. District Court for the District of Wyoming, alleges the president's order violates federal law.

"Because the suspension is both arbitrary and capricious and contrary to law, the Court should find the suspension invalid and set aside the challenged government action," the petition reads. 

Biden signed the order earlier Wednesday as part of sweeping executive actions seeking to tackle climate change and prioritize green energy. The executive order does not affect existing leases on federal land and doesn't apply to tribal land.

"We're going to review and reset the oil and gas leasing program," Biden said Wednesday at the White House.

Kathleen Sgamma, president of the Alliance, which represents 200 oil and gas companies, said in a statement that "the law is clear."

"Presidents don't have authority to ban leasing on public lands," she said. "All Americans own the oil and natural gas beneath public lands, and Congress has directed them to be responsibly developed on their behalf. Drying up new leasing puts future development as well as existing projects at risk.

"Biden's ban is an overreach meant to satisfy the environmental left, but it would seriously harm the livelihoods of tens of thousands of westerners and put at risk millions more as state services become unfunded," Sgamma added.

Wyoming had over 8.9 million acres under lease in fiscal year 2019, the most acreage in the country. Wyoming and its local governments received $1.67 billion from the oil and gas industry in 2019, according to the Wyoming Energy Authority. 

The Alliance cited a Wyoming Energy Authority report commissioned by the Wyoming Legislature that estimates a federal lease moratorium, if extended, would be a $639.7 billion hit to gross domestic product (GDP) in Wyoming, New Mexico, Colorado, Utah, Montana, North Dakota, California, and Alaska by 2040. 

The executive order also threatens $8.8 billion in conservation funding each year, since both the Great American Outdoors Act and the Land and Water Conservation Fund draw revenue from federal oil and gas leases and drilling, the Alliance said. may earn an affiliate commission if you purchase products or services through links in an article. Prices, when displayed, are accurate at the time of publication but may change over time. Commissions do not influence editorial independence.

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