Biden administration freezes new oil and gas drilling leases after court rules against key climate tool

Earlier this month, US District Judge James Cain of the Western District of Louisiana issued an injunction preventing the Biden administration from using what’s known as the “social cost of carbon” in decisions around oil and gas drilling on public land, or in rules governing fossil fuel emissions. The ruling has consequences for a range of Biden administration actions on climate change, but especially on the Interior Department’s federal oil and gas leasing program.

In an appeal filed by government attorneys on Saturday night, the Biden administration argued Cain’s injunction necessitated a pause on all projects where the government was using a social-cost-of-carbon analysis in its decision-making.

The appeal is the latest in a legal battle in the courts between several Republican-led states and the Biden administration over the social cost of carbon, a metric that uses economic models to put a value on each ton of carbon dioxide emitted. The idea is to quantify the economic harm caused by the climate crisis like sea level rise, more destructive hurricanes, extreme wildfire seasons and flooding.

The metric was first implemented during the Obama administration and substantially weakened by the Trump government.

Biden revived the social cost of carbon on his first day in office, setting it at $51 per ton of CO2 emissions — the same level as set by the Obama administration. The administration was expected to release an updated figure this February.

“The consequences of the injunction are dramatic,” the Biden administration’s filing reads. “Pending rulemakings in separate agencies throughout the government — none of which were actually challenged here — will now be delayed. Other agency actions may now be abandoned due to an inability to redo related environmental analyses in time to meet mandatory deadlines.”

The filing also said that internal agency discussions on a new social cost of carbon have stopped, and that Cain’s ruling has even undermined Biden’s ability to discuss the estimate with other foreign leaders or White House staff.

Interior Department spokesperson Melissa Schwartz confirmed this will impact the department’s oil and gas permitting.

“The Interior Department has assessed program components that incorporate the interim guidance on social cost of carbon analysis from the Interagency Working Group, and delays are expected in permitting and leasing for the oil and gas programs,” Schwartz said in a statement.

Schwartz said Interior “continues to move forward with reforms to address the significant shortcomings in the nation’s onshore and offshore oil and gas programs,” including assessing climate impacts and reforming royalty rates for taxpayers.

In their brief notifying appeal, the administration characterized Cain’s ruling as overly broad, and requested a stay pending appeal.

“Respectfully, Defendants are aware of no precedent for such judicial micromanagement of Executive Branch policymaking,” the government brief said.

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