API Statement on Fifth Circuit Decision on Lease Sale 261

WASHINGTON, November 14, 2023 – The American Petroleum Institute (API) today released the following statement from Senior Vice President and General Counsel Ryan Meyers in response to the preliminary injunction upheld by the U.S. Court of Appeals for the Fifth Circuit.

“Energy independence scored an important win tonight with the Fifth Circuit decision lifting unjustified restrictions on oil and natural gas vessels and restoring acreage for offshore energy development. The U.S. Gulf of Mexico plays a critical role in maintaining affordable, reliable American energy production, and today’s decision creates greater certainty for the essential energy workforce and the entire Gulf Coast economy.” 

This decision follows a challenge filed by API, the State of Louisiana and Chevron U.S.A. Inc. to the Department of the Interior (DOI) Bureau of Ocean Management’s (BOEM) Final Notice of Sale for Lease Sale 261, which significantly reduced acreage and included severe restrictions on oil and natural gas vessel traffic. Today’s decision requires BOEM to hold Lease Sale 261 within 37 days, removes the unjustified restrictions on oil and gas vessels and restores the previously removed acreage. 

Lease Sale 261 is the final offshore lease sale mandated by the Inflation Reduction Act and is likely to be the only offshore sale scheduled to take place until 2025. In September, the Biden administration issued a proposed final 5-year program for federal offshore leasing that included 3 offshore lease sales over the next 5 years, the lowest number of lease sales in the history of the program.

According to the U.S. EIA, Gulf of Mexico federal offshore oil production accounts for 15% of total U.S. crude oil production and federal offshore natural gas production in the Gulf accounts for 5% of total U.S. dry production. The U.S. Gulf of Mexico produces some of the lowest carbon intensity barrels in the world. Constrained production in this basin could be replaced by higher carbon intensity barrels from elsewhere in the world.

API represents all segments of America’s natural gas and oil industry, which supports more than 11 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Our approximately 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence®, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 700 standards to enhance operational and environmental safety, efficiency and sustainability. 

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