Blake International Rigs

The offshore oil industry employs thousands of Louisiana workers. Oil workers found themselves breathing a little easier this week after a federal judge blocked a presidential order that paused lease sales in the Gulf of Mexico.

After a federal judge blocked a presidential order to pause federal lease sales in the Gulf, oil field workers found themselves breathing a little easier this week while executives and energy analysts still foresee rough waters as the Biden administration continues its fight for clean energy. 

The judge's ruling is a step toward a balanced transition to renewable energy, said Chett Chiassion, executive director of the Greater Lafourche Port Commission.

He said the delay in lease sales had no immediate effect on oil production, but it certainly impacted the attitude of oil workers in the bayou community.

“The oil industry has been on a downward slope for years,” Chiasson said. “It felt like the administration was kicking us while we were down.”

Federal District Judge Terry Doughty of Louisiana issued the injunction Tuesday in a ruling on a lawsuit filed by Louisiana Attorney General Jeff Landry and officials in 12 other states. Doughty ordered that delayed lease sales in the Gulf of Mexico and Alaska need to be resumed.

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Mike Moncla, president of the Louisiana Oil and Gas Association, said that a ruling like this one should help ease the stress Biden’s policies put on Americans at the gas pumps.

“If President Biden wants to truly enact policies that get this nation back on track, he should join the industry’s efforts in modernizing clean energy practices while maintaining a prosperous economy,” Moncla said.

Chiasson said that the oil companies in south Louisiana see a path toward renewable energy, and they embrace it.

“But at the end of the day, you still need petroleum to build wind turbines and solar panels,” he said.

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Moncla added that the “fight against the administration’s climate agenda” is far from over.

Biden enacted the 60-day moratorium on new leasing permits as part of his efforts against climate change, giving the Interior Department time to review how leasing policies work and improve them. The moratorium started in January, and it did not affect existing leases oil companies have in the Gulf and on federal lands.

The 13 states that opposed the moratorium argued that the Biden administration did not follow the proper bureaucratic steps necessary to delay lease sales. Federal lawyers pushed back, saying that the lease suspension doesn’t legally require public notices and comment periods, and the Interior Department has “broad discretion” in leasing decisions.

Doughty said that the administration cannot halt leasing without congressional approval. He said that the 13 states that filed the suit showed that the moratorium was “a substantial threat of irreparable injury.”

Eric Smith, associate director of Tulane University’s Energy Institute, said that the oil industry suffered a blow from the moratorium because it introduced more regulatory uncertainty into an already-uncertain industry.

“The damage has been done,” Smith said. “The administration succeeded in scaring investors. I mean, who is going to make a decades-long investment in an industry that will probably be uncertain again in six months?”

David Dismukes, executive director of LSU’s Center for Energy Studies, agreed with Smith’s grim outlook on the ruling. He said that he expects the government to either appeal Doughty’s decision or find a new angle to stifle the oil industry.

“If lease sale offers are less than enticing in the fall, you can probably point to this moratorium to blame,” Dismukes said.

Landry and others who opposed the moratorium said that it has driven up oil prices and endangered Louisiana’s energy jobs. In Lafourche and Terrebonne parishes, more than 5,400 energy workers earn annual salaries of $81,402, which support $24 million in local property taxes.

The Louisiana Mid-Continent Oil and Gas Association and the Gulf Economic Survival Team said that any effort to limit energy development in the Gulf hurts Louisiana’s already-struggling economy and “undermines decades of environmental progress.”

“We support transitional policies that will help us meet our world’s growing energy demands while protecting our environment, our coast and our culture,” officials said in a press release.


Email Caroline Savoie at CSavoie@TheAdvocate.com or follow her on Twitter at @CarolineSavo.