A federal judge ruled that it was legal for the Biden administration to pause new oil and gas leasing on public land in Wyoming, potentially creating broad implications for the state’s energy industry.
Oil and gas leasing is what allows companies to explore for fossil fuels on public land. Typically sales happen four times a year, but since Biden took office, there has only been one in Wyoming. The federal government cited that the environmental review process for the leases did not properly consider the impacts of oil and gas production on the climate.
The state of Wyoming, the Wyoming Energy Authority and the Petroleum Association of Wyoming (PAW) sued over the initial pause by the administration in January 2021, saying this move was illegal. But U.S. District Judge Scott W. Skavdahl of Wyoming disagreed.
“...postponing the first quarter 2021 lease sales was done to ensure NEPA (National Environmental Policy Act) compliance with several then-recent federal court opinions that negated previously authorized oil and gas lease sales,” Skavdahl wrote in his decision.
Ryan McConnaughey, the vice president of PAW, said the agency is incredibly disappointed by the decision.
“Judge Skavdahl’s ruling really gives President Biden another arrow in his quiver to end oil and natural gas development on federal lands, which is exactly what his oil and anti-oil and gas allies have been demanding since he was elected President,” McConnaughey said.
Paul Ulrich, chairman of the Wyoming Energy Authority, said new leases are particularly important for small or growing operations.
“In order for operators in Wyoming to continue to survive and perhaps thrive, we need running room, and new leases provide that running room,” Ulrich said.
However, conservationists are applauding the decision. Melissa Hornbein, senior attorney with the Western Environmental Law Center, said going forward, it gives the federal government more authority than ever to pause or even halt new oil and gas lease sales.
“Before federal government resources are irretrievably committed to a course of oil and gas development the government has to consider all of the consequences including the climate consequences before it can make that commitment,” Hornbein said.
The decision comes just weeks after a separate, and much different ruling was issued out of Louisiana. In that case, the U.S. District Judge Terry Doughty ruled that it was illegal for the federal government to have paused new oil and gas lease sales in January 2021 in 13 states. That case did not include Wyoming.
The federal government has not announced any upcoming onshore oil and gas lease sale anywhere in the country. However, language in the recent Inflation Reduction Act (IRA) requires oil and gas lease sales to be held for every renewable energy project planned. Hornbein said there are still some unknowns regarding how Skavdahl’s ruling in Wyoming will play out.
“It's pretty unclear at this point, how the government interprets the ruling for one thing,” she said. “And how it will interplay with a contrary ruling from the Western District of Louisiana, and how everything is going to play out in light of the IRA passing.”
She maintained that Skavdahl’s ruling will set a precedent for requiring the federal government to disclose the climate impacts of oil and gas leasing on public land.
PAW said it is discussing a potential appeal.
