Oil and gas firms this week voiced their opposition to President Biden’s decision to suspend leasing in the Arctic National Wildlife Refuge, but they may have to wait a while to bring their fight to the courts.
Biden announced on Tuesday that the Interior Department would conduct a National Environmental Policy Act review of fossil fuel development in the refuge’s 1.5-million-acre coastal plain in an effort to address "legal deficiencies" in Trump-era analyses (E&E News PM, June 1).
The suspension extends an earlier leasing pause put in place under Biden’s Jan. 20 climate executive order, which stalled 11 ANWR leases that were sold on Jan. 6 during the first sale in the refuge.
Legal experts say "serious lawsuits" challenging the lease suspension wouldn’t come until after the Biden administration is done with its NEPA analysis and has decided whether to develop in the refuge.
"But the strength of that [challenge] will depend on what comes out of this NEPA analysis," said Hannah Perls, a legal fellow at Harvard Law School’s Environmental & Energy Law Program.
Any litigation filed in the interim would run up against Interior’s discretion over leasing, she said.
"I think they are in pretty good standing because it’s a pause, not a cancellation," Perls said.
Nine of the 11 leases sold earlier this year were finalized on Jan. 19 — just one day before Biden’s climate order (Energywire, Jan. 20).
The short window of opportunity to develop the leases would present a hurdle for drilling proponents that may argue that Biden’s pause eliminated the value of the leases, Perls said.
To win a potential legal claim that the Biden administration had effectively taken their property under the Fifth Amendment to the Constitution, oil and gas industry challengers would need to show that they relied on representations from the government before investing in the ANWR leases, along with meeting other criteria, Perls continued.
"At least at this stage," she said, "I don’t think there is any real harm here."
But Devin Watkins, an attorney with the Competitive Enterprise Institute, suggested that affected companies could raise breach of contract claims.
He acknowledged that the government isn’t required to issue leases against its will. But in this case, he said, the government has stalled leases that have already been issued, without identifying legal problems with the leases.
"The Biden administration is free to examine the issue all they want to, do whatever tests they think are necessary, to look at whatever they need to look at, but they can’t stop doing what they promised they were going to do while that occurs. That is breach of contract," Watkins said.
"Once they have any evidence that there is a legal problem, that changes the matter," he added.
In a June 1 order, Interior Secretary Deb Haaland said the department would be evaluating the Trump administration’s environmental impact statement and record of decision underlying the ANWR leasing strategy for potential NEPA violations.
The order also said Interior would review whether the Trump team improperly interpreted the Tax Cuts and Jobs Act of 2017, which directed the Bureau of Land Management to hold ANWR lease sales.
Opponents of leasing in the refuge have flagged a number of problems with the Trump administration’s NEPA analysis.
They say the Trump team failed to take a hard look at climate impacts of the sale and elevated consideration of the value of leasing the land over conservation goals.
The Trump administration did not look at a reasonable list of the sale’s impact on migratory birds or fully assess the risks to denning polar bears and their cubs, opponents said.
Once Interior has finished its NEPA review, Alaska officials seem highly likely to bring the Biden administration to court, said Carl Tobias, a law professor at the University of Richmond.
The chances of a lawsuit before the analysis is complete are low, he said.
"My sense is, the best argument is that Congress indicated in 2017 in tax legislation that the Congress was committed to leasing in ANWR and seemed to authorize that," Tobias said.
The Tax Cuts and Jobs Act, passed by a Republican-led Congress, required that BLM hold two lease sales in the refuge over a 10-year period.
With the Jan. 6 sale completed, the act still requires BLM to offer a second lease sale for an area covering at least 400,000 acres by December 2024.
"The Biden administration still has to comply with that, unless Congress is able to pass legislation that undoes that provision of the Tax Act," Perls said.
That outcome seems unlikely with only a narrow Democratic majority in the Senate, Tobias noted.
But he pointed out that the tax law made leasing in ANWR contingent on environmental review.
"I think that contingency is still there," Tobias said. "Congress didn’t say lease at all costs."