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Angry oil industry sues U.S. over new Gulf auction rules meant to protect whale

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The Biden administration’s proposed new restrictions on oil and gas companies operating in the Gulf of Mexico have sparked outrage from the oil industry, which sees the move as an unjustified assault on fossil fuel producers that threatens to restrict U.S. energy production.

The American Petroleum Institute, the state of Louisiana and Chevron filed a lawsuit this week in federal court after the Interior Department’s Bureau of Ocean Energy Management released its final notice for next month’s Gulf of Mexico federal lease auction, which surprised energy officials by including new restrictions on development meant to protect the endangered Rice’s whale.

The new lease stipulations also removed more than 6M acres originally intended to be offered at the auction and imposes speed requirements on oil and gas ships, expands protected zones and limits the hours the vessels can operate.

The industry groups argue the restrictions are unjustified by current data on Rice’s whale activity in the western Gulf and unfairly singles out energy producers in an area that is one of the most heavily trafficked commercial vessel waterways in the U.S.

The deal was “a closed-door negotiation between the Biden administration and environmental groups,” an industry official told The Washington Examiner. “It bypasses career staff at Interior. It bypasses Congress and bypasses other stakeholders. It’s just a one-on-one agreement with people who don’t want domestic production.”

ETFs: (NYSEARCA:XLE), (XOP), (VDE), (OIH), (XES), (IEZ)

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