Sep 10, 2024 U.S Energy Trades Condemn Ruling That Could Shut Down Oil and Gas Operations in Gulf of Mexico
WASHINGTON —Today, Energy Workforce & Technology Council, Independent Petroleum Association of America, US Oil and Gas Association, National Ocean Industries Association, Western Energy Alliance, and the International Association of Drilling Contractors issued the following statements in response to Maryland Judge Boardman’s decision to vacate the 2020 Gulf of Mexico Biological Opinion (BiOp). The Biological Opinion was meant to serve as the primary Endangered Species Act consultation for most oil and gas activities in the Gulf of Mexico, with only a few additional actions requiring further review.
With the current ruling, a wide and substantial swath of offshore oil and gas operations and activities could be shut down on December 20, 2024, unless a legal, regulatory or legislative solution that prevents a gap between biological opinions is in place before then. This would include those with past leases at the time the 2020 opinion was issued, regardless of when the lease was awarded, in addition to actions associated with new leases through approximately 2030.
“The recent decision to vacate the BiOp poses a potentially grave threat to America’s energy security and economic prosperity,” said Energy Workforce President Tim Tarpley. “This misguided ruling could shut down oil and gas operations across the Gulf of Mexico and jeopardize hundreds of thousands of jobs and billions in economic activity.”
“The Gulf of Mexico is a cornerstone of American oil and gas production, providing nearly 15% of our nation’s crude oil and supporting an estimated 372,000 jobs in the United States,” Tarpley continued. “Abruptly halting these operations would have devastating consequences for energy prices, national security, and American families already struggling with inflation. We urge immediate action to prevent any interruption of Gulf energy operations. The Administration and Congress must use all tools at its disposal to maintain continuity and provide certainty to Gulf operators. America cannot afford to lose this vital source of domestic energy production.”
“Independent oil and natural gas producers operating in the Gulf of Mexico adhere to the highest environmental and safety standards as they produce vital energy for Americans. If production in the area were to stop, the United States’ energy security and supply would be severely impacted, along with the livelihoods of all those who work in the offshore oil and natural gas industry and in gulf state communities. IPAA urges quick action to ensure continued offshore oil and natural gas production in the Gulf of Mexico,” said Dan Naatz, Chief Operating Officer for the Independent Petroleum Association of America.
“If allowed to go into effect, this decision is about to cause massive price shocks across all sectors of our economy and every business, small and large, from manufacturing and agriculture to transportation and technology, will feel it,” said Tim Stewart, President US Oil and Gas Association. “National security and our balance of trade are about to be impacted. Worst of all – within weeks, millions of low- and moderate-income families will find themselves pushed back into energy poverty. Immediate action must be taken to overturn this ruling.”
“The potential for this ruling to cause disruptive economic consequences for the United States and energy markets as a whole cannot be understated,” said Erik Milito, President, National Ocean Industries Association. “Any disruption due to vacatur of the 2020 Biological Opinion could not only impact hundreds of thousands of energy workers in the region but would potentially increase energy insecurity by jeopardizing oil production coming from the Gulf of Mexico, which is responsible for nearly 15% of total U.S. crude production. Immediate action is now required to avert a potentially devastating coverage gap for offshore oil and gas operations in the U.S. Gulf of Mexico.”
“Western Energy Alliance, which represents the Rocky Mountain West, stands in solidarity with our sister associations and companies in the Gulf of Mexico,” said Kathleen Sgamma, President, Western Energy Alliance. “We have likewise seen how judges far removed from production areas have underappreciated the local economic and social impacts of their rulings in other states. Further, the ruling went far beyond what even the environmental plaintiffs thought was reasonable. We hope the appellate court will appreciate the cascading impacts and the long timelines for corrective action.”
According to Jason McFarland, President of the International Association of Drilling Contractors, “The arbitrary December 2024 deadline is woefully inadequate for developing a sustainable solution. It’s imperative that Congress and the Administration provide the National Marine Fisheries Service with sufficient time and resources to conduct a thorough, science-based review. Rushing this process risks compromising both environmental protections and energy security.
The decision to vacate the 2020 Biological Opinion fails to consider the far-reaching consequences that will extend well beyond the Gulf of Mexico. We urge decision-makers to recognize the complexity of this issue and its potential effect not just to our industry, but to the American people and the broader global energy landscape. IADC stands ready to work with all stakeholders to find a long-term solution that ensures environmental protection without sacrificing the vital role of Gulf energy production.”
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