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In the United States, there is an ongoing debate regarding the future of the oil and gas industry. On one hand, oil and gas carry substantial economic value. The U.S. Department of Labor estimates that the industry employs as many as 119 million workers. Moreover, oil and gas account for $1.8 trillion, or roughly 6 percent of the national GDP. On the other hand, oil and gas production carries many risks. Drilling for these resources can contribute to habitat loss. It has also been blamed for pollution and a rise in greenhouse gas (GHG) emissions contributing to and worsening climate change. At a time when extreme climate-related weather events like wildfires have reached a peak (23 so far this year), these environmental concerns merit attention. Such debates about oil and gas have led to multiple lawsuits. At the state level, concerned citizens are using language in their state constitutions to protect the environment. However, at the federal level, oil and gas groups appear to be winning. Frequently, they are offered protections by the government and the courts. Thus, the future of oil and gas in America remains uncertain. 

Executive Order 14008 

When President Biden assumed office in January 2021, he made headlines by taking bold action on climate change. Under Executive Order 14008, Biden paused oil and gas leasing on federal lands, proposing to suspend leases for 60 days in order to allow federal agencies to further investigate the leasing program. The executive order was challenged by the state of Louisiana through its Republican Attorney General Jeff Landry, in a lawsuit that was joined by 12 additional states. The suit claimed that the Biden administration’s actions would deprive states of revenue, as many states would lose property taxes, royalties, and commercial taxes from their oil and gas operations. For example, states involved in offshore drilling could lose 50 percent of the revenue it generates. However, environmentalists are divided on whether the directive goes far enough. Some environmentalists have claimed that the quantities of oil and gas drilled from federal lands are relatively small, making Biden’s directive insignificant. For example, oil drilled from public lands accounts for 23.6 percent of overall oil production. For natural gas, this figure is even smaller: 11.2 percent. Moreover, when it was first proposed, Executive Order 14008 did not apply to existing oil and gas operations, only future lease sales. Consequently, some environmental groups have objected to Biden’s order on the grounds that it still allows as much as 918 megatons of CO2 to be released into the atmosphere. 

A U.S. District Court issued a preliminary injunction in favor of Louisiana on June 15, 2021. Judge Terry Doughty’s ruling effectively blocked the Biden administration from pausing oil and gas leases on public lands. In his decision, Doughty cited the same arguments as the plaintiffs, claiming that the Biden

GisGeography Map of federal lands in the U.S. 

administration was depriving the 13 states of millions of dollars in revenue. According to the judge, the Biden administration was not in compliance with the requirement to hold lease sales per the Mineral Leasing Act (MLA) and Outer Continental Shelf Lands Act (OCSLA). Specifically, the MLA demands that the Secretary of the Interior hold quarterly leases, and mandates that 50 percent of revenues from leases go back to the states. Additionally, the OCSLA requires the Secretary of the Interior, through the Bureau of Ocean Energy and Management (BOEM), to hold leases for offshore oil and gas every five years. According to the judge, besides taxes on oil and gas production, the state plaintiffs would also be deprived of coastal reclamation funds under the Gulf of Mexico Energy Security Act (GOMESA). These funds provide states like Louisiana with resources – more than $100 million – to protect their coastlines and ports. Doughty’s ruling dealt a blow to climate change advocates, who argue that oil and gas drilling will accelerate climate change. In Doughty’s view, however, statutory law and procedure should prevail. The Louisiana v. Biden case represented a major victory for the oil and gas industry, even if it was criticized by environmental groups. 

The Gulf of Mexico: Lease Sale 261 

Another important federal case involves oil and gas leasing in the Gulf of Mexico. In Louisiana v. Haaland, the state of Louisiana, Chevron, and the American Petroleum Institute all sued Deb Haaland, Biden’s Secretary of the Interior. In their complaint, the plaintiffs challenge BOEM’s decision to restrict the area of Lease Sale 261, located in the Gulf of Mexico. To protect an endangered species of whales – the Rice’s Whale – BOEM restricted the lease area from 73 million acres to 67 million acres. In response to such actions, the state of Louisiana, together with oil and gas industry representatives, challenged the decision. Louisiana and the other plaintiffs claim that the OCLSA requires the Bureau of Ocean Energy and Management to hold leases in the outer-continental shelf every five years, “subject to environmental safeguards.”  Moreover, the Inflation Reduction Act, passed in 2022, required BOEM to hold sales for lease 261. Based on these arguments, the plaintiffs sued BOEM for violating the Administrative Procedure Act (APA) and defying statutory commands. Additionally, the plaintiffs argued that BOEM did not consult appropriate stakeholders in their decision, thereby violating the APA. The plaintiffs claim they will suffer from restricted leasing area and fewer coastal restoration programs, which derive from 37.5 percent of the leasing revenue. 

Bureau of Ocean Energy Management, sale 261 information

In September, the federal district court in Western Louisiana accepted the plaintiffs’ arguments, ruling against BOEM. The district court found that BOEM’s actions would cause injury, including the loss of $2.2 million in royalties to Louisiana. Following that decision, the 5^th Circuit issued a stay and effectively paused the lawsuit. But recently, the 5^th Circuit revisited the case and ruled in favor of the plaintiffs. On November 14, this court ruled in favor of Louisiana, requiring lease sales to be held within 37 days. As reported in the Federal Register, the sale for lease 261 will now take place on December 20, 2023. As this case shows, the 5^th circuit’s decision hands another victory to oil and gas companies seeking to drill in the Gulf of Mexico. However, for environmental groups like the Sierra Club, the 5^th Circuit’s decision threatens the Rice’s whale. Already, events like the 2010 BP oil spill reduced the Rice’s whale population by 20 percent, so it remains to be seen what effects oil and gas drilling will have on future generations of endangered species. 

New Mexico 

In Atencio v. State, a group of New Mexico residents are suing the state for its role in harming the environment. The lawsuit references Article 20, Section 21 of New Mexico’s state constitution, which was passed in 1971. This provision states that, the state “shall provide for control of pollution and control of despoilment of the air, water, and other natural resources… for the maximum benefit of the people.” The plaintiffs claim that, through its approval of oil and gas permits, the state of New Mexico has been complicit in despoiling the environment. For example, the plaintiffs point to a spill in February 2019, which resulted in 42,000 gallons of toxic waste and 12,500 gallons of crude oil contaminating the land and groundwater. They also argue that oil and gas drilling has worsened air quality in the region. The Atencio lawsuit raises legitimate concerns about New Mexico’s role in environmental pollution. And the plaintiffs in this case are not alone. People from the Diné (Navajo) and Pueblo tribes complain of environmental pollution to their sacred, ancestral lands. They also allege that air pollution from the oil and gas wells have significantly contributed to cancer and other ailments. 

New Mexico Bureau of Geology and Mineral Resources, Map of New Mexico’s Permian Basin

However, the New Mexico suit will likely face pushback from the oil and gas industry.  In recent years, New Mexico’s economy has grown significantly due to oil and gas development. Oil and gas production in the Permian basin in Southwest New Mexico has led to the state’s positioning as the second largest oil producer in the United States, just behind Texas. In terms of tax revenue, New Mexico’s oil and gas industry is estimated to account for one-third of the state budget. Moreover, the oil and gas industry in New Mexico employs over 100,000 workers, and real estate in the Permian basin has been described as highly coveted. Oil and gas feature prominently in the New Mexico economy, and the industry is keen to preserve its position. Thus, as the Atencio suit makes its way through the courts, the plaintiffs may encounter fierce opposition.

Montana 

An additional case, Held v. Montana, also involves citizen-led efforts to protect the environment. In this case, 16 young activists sued the state for harming the environment. The 16 plaintiffs used a clause in Montana’s state constitution (Article 2, Section 3) to argue that they have “the right to a clean and healthful environment.” The plaintiffs used this provision to challenge Montana’s State Energy Policy Act, which precludes state agencies from conducting climate change reviews. The plaintiffs allege that this bill allows the state to continue approving oil and gas permits without due regard for climate change. As a result, they are exposed to climate hazards like increased temperatures, more extreme weather events such as flash flooding, and more severe wildfires. In August 2023, the 16 youth won the case, with Judge Kathy Seeley of the 1^st District Court writing the decision. Seeley noted that children are most vulnerable to the negative impacts of climate change and stressed that GHG emissions have harmed Montanans’ personal health. 

In response, the Montana Attorney General’s office stated that it would appeal the ruling to the Montana Supreme Court. The office called the decision a  “taxpayer-funded publicity stunt.” The office also points out that Montana “has no impact on the global climate.” However, the court order claims that Montana ranks high in GHG emissions; for example, in 2019, Montana’s oil and gas production accounted for 70 million tons of CO2, which was greater than the CO2 emitted by Brazil, Japan, or the United Kingdom. Nonetheless, conservative organizations like the CATO Institute have criticized the ruling in similar terms as the Montana Attorney General’s office. CATO claims that the 16 youth plaintiffs lack standing, and said it was unlikely that the state would incur any direct harm from GHG emissions. 

The case is the first of its kind in the U.S., representing a shift in how the country addresses climate change. In the future, it remains to be seen whether this strategy will ultimately succeed and continue to be replicated. In addition to Montana, five other state constitutions guarantee the right to a healthy environment. These include Hawaii, Illinois, Massachusetts, New York, and Pennsylvania. In Hawaii, environmental groups have brought a similar case to court, but it still awaits trial. At the federal level, however, this approach has been unsuccessful to date. The U.S. Constitution contains no guarantees relating to the environment or climate change, so plaintiffs have relied on the 5th Amendment and 9th Amendment to argue their cases. In Juliana v. United States, 21 plaintiffs allege that the federal government’s support for fossil fuels violated their 5^th Amendment right to “life, liberty, and property,” due to the effect of GHG emissions on personal health. The plaintiffs also contend that the government violated their 9^th Amendment right, citing an implicit right to a healthy environment. In 2019, the 9^th Circuit Court of Appeals dismissed the case for a lack of standing. In 2023, the District Court in Oregon allowed the case to be amended and reviewed a second time, so a new ruling is expected soon. While it’s unlikely that climate litigation will be successful at the federal level, the recent victory in Held v. Montana at the state level provides a roadmap for the states to follow in guaranteeing a healthy, climate-conscious environment.