Key Takeaways
President Biden’s withdrawal of large coastal areas from offshore oil and gas drilling was ruled illegal by a federal judge in Louisiana.
The judge ruled that the ban exceeded executive authority under the 70-year-old Outer Continental Shelf Lands Act and broke with longstanding executive practice because it was intended to be permanent.
Withdrawals of offshore areas from drilling by former President Barack Obama were similarly ruled illegal, as they were issued for “a time period without specific expiration.”
Offshore oil and gas exploration and production are important to energy and national security, providing 14% of U.S. oil production.
The Trump administration is taking action to improve offshore oil exploration and production by implementing an emergency permitting process for energy projects on federal lands and waters, and developing a new five-year offshore lease plan that will supplement the three lease sales in the Biden administration plan.
A federal judge in Louisiana ruled that President Biden’s withdrawal of large coastal areas from offshore oil and gas drilling was illegal. Several states and oil and gas industry groups sued to block Biden’s withdrawal of federal waters off the East and West coasts, the eastern Gulf of Mexico, and portions of the northern Bering Sea in Alaska — 625 million acres — from offshore drilling. The ban exceeded executive authority under the 70-year-old Outer Continental Shelf Lands Act and broke with longstanding executive practice, U.S. District Judge James Cain in Lake Charles, Louisiana, ruled earlier this month. According to Judge Cain, Biden’s withdrawal was illegal because it was intended to be permanent, making withdrawals by former President Barack Obama similarly illegal, as they were issued for “a time period without specific expiration.”
The states of Louisiana, Alabama, Alaska, Georgia, and Mississippi, alongside the American Petroleum Institute and the Gulf Energy Alliance, filed a federal suit on January 17 to block Biden’s order. On January 20, President Donald Trump signed an executive order repealing Biden’s block on oil drilling in areas off the U.S. coast and Biden’s 2023 order that barred oil drilling in some 16 million acres in the Arctic.
In fiscal year 2024, production from U.S. offshore leases accounted for approximately 14% of domestic oil production (nearly two million barrels per day) and 2% of domestic natural gas production, yielding $7 billion in federal revenues and providing resources needed for energy security. Offshore oil and natural gas development could generate over $8 billion in additional government revenue by 2040. IER found that U.S. oil production is also among the lowest carbon-intensive barrels produced anywhere in the world.
According to the Environmental Quality Index, the United States, as the world’s largest producer of oil, is only outranked on environmental quality by three of the top 20 oil producers. None of those three countries produces even one-quarter of the volumes of oil coming from the United States. The combined oil production from countries scoring higher on environmental quality amounts to only 36% of U.S. oil production. The sheer size of U.S. production, combined with its excellent environmental standards, means that U.S. production disproportionately reduces the environmental harms of oil production on a global scale.
New Offshore Exploration Is Needed
Currently, shale oil basins provide the majority of U.S. oil production. But it is believed that shale oil production will eventually plateau and begin to decline, making it essential to expand offshore exploration and production. The Trump administration is compiling a new 5-year offshore lease plan to augment the three offshore lease sales contained in the Biden administration’s offshore lease plan — the fewest sales allowed under the Biden climate bill, the Inflation Reduction Act. The Trump administration’s new offshore lease plan could include new zones in the Arctic and elsewhere to maximize energy development.
As of April 1, 2025, the Bureau of Ocean Energy Management oversees 2,227 active oil and gas leases spanning about 12.1 million acres across the Outer Continental Shelf (OCS). Of these, 469 leases are actively producing oil and gas. The OCS contains significant untapped energy potential, with mean estimates of 68.79 billion barrels of oil and 229.03 trillion cubic feet of natural gas. The true extent of these resources can only be confirmed through exploration associated with leasing, a process improved by advancing technologies.
According to Reuters, oil and natural gas industry leaders expect technological advancements, streamlined permitting, and sustained investment to increase production in the U.S. Gulf of Mexico (America), where oil production could rise from 1.8 million barrels to 2.4 million barrels daily. The Trump administration is implementing an emergency permitting process for energy projects on federal lands, cutting approval times that typically take months or years to at most 28 days. Besides the quicker regulatory approvals, technological advances, including artificial intelligence, are helping to increase production. Highly sophisticated projects are overcoming challenges that hindered oil production 20 years ago. For instance, last year, Chevron started production in a U.S. Gulf field under extreme subsea pressures of up to 20,000 pounds per square inch — a first for the industry.
Analysis
The Louisiana District Court’s ruling provides a counterweight to a previous district court ruling that found that the Trump administration could not reverse President Obama’s withdrawal of areas off Alaska’s coast from oil and gas leasing. Even though the previous ruling was rendered moot when the Biden administration took office and reinstated Obama’s withdrawals, the poignancy of its reasoning is significantly reduced because the Trump administration didn’t require authority to reverse a designation if the original designation was illegal in the first place. Keeping OCS lands open to oil and gas leasing helps the U.S. meet future energy demand, while also forwarding environmental progress due to the U.S.’s high environmental quality score, making it economically and environmentally beneficial.
For inquiries, please contact [email protected].
