Joe Biden Faces Fight to Block Oil and Gas Drilling in Gulf of Mexico

The administration of President Joe Biden faces an escalating battle over fossil fuel production in the U.S. after the American Petroleum Institute (API) said it would challenge a January court decision to annul a massive sale of oil and gas leases.

The API move against the invalidation of November's auction came as hundreds of environmental and other advocacy groups petitioned the Interior Department to immediately stop authorizing Gulf exploration plans and new drilling permits.

The petition and the ongoing legal battle over oil and gas leases add pressure on the Biden administration's ability to balance its environmental and energy policies as Americans face the highest gas pump prices since 2014.

One energy expert told Newsweek: "It is a real mess right now. "

Oil and gas groups condemned the decision by Washington, D.C. Judge Rudolph Contreras to throw out the sale of 1.7 million acres worth more than $198 million in the Gulf of Mexico Outer Continental Shelf Oil and Gas Lease Sale 257.

API Senior Vice President for Policy, Economics and Regulatory Affairs Frank Macchiarola said it was appealing the judge's decision in the case in which the API was a defendant, "to preserve American energy leadership."

"At a time of rising energy costs and heightened geopolitical tensions, the misguided decision to cancel the only lease sale held last year is contributing to significant uncertainty for U.S. natural gas and oil producers," Macchiarola said in a statement to Newsweek, shared with media.

Biden was accused of hypocrisy for allowing the auction to go ahead, although his administration said it had no choice following a successful challenge by 13 states led by Louisiana to his executive order to pause new leases on federal land.

However, the optics of the auction were jarring as the sale came only days after Biden made ambitious environmental pledges at the COP 26 climate change summit.

Environmental groups hailed the court decision to reject the Interior Department's argument—made by the Trump administration—that Gulf of Mexico oil production would reduce greenhouse gas emissions because of less reliance on fossil fuel imports.

Contreras said the Interior Department's Bureau of Ocean Energy Management (BOEM) acted "arbitrarily" by not including foreign energy consumption in its emissions analysis.

But environmental groups want the Biden administration to go further.

Around 300 groups, including the Center for Biological Diversity and Friends of the Earth, said in a petition submitted Tuesday that the decision to proceed with Lease Sale 257 showed a "spectacular failure of climate leadership."

It called for the immediate halt of new exploration plans, new development plans and new drilling permits in the Gulf of Mexico, "unless and until the Bureaus comply with NEPA (National Environmental Policy Act) and properly analyze the climate impacts of approving new oil and gas drilling activity."

Frank Maisano, energy expert at Bracewell PRG, which represents energy groups, said the Biden administration was walking a "tightrope" as it tried "to please climate activists on one hand and angry consumers feeling it in their family budget on the other—it is a real mess right now."

"The realization that we may really be coming out of COVID will drive increased production, with none of the uncertainties on leasing issues resolved anytime soon, it will be an interesting summer," he told Newsweek.

Newsweek has contacted the Interior Department for comment.