Court Decision Averts Shutdown of U.S. Oil and Gas in the Gulf of Mexico - InvestingChannel

Court Decision Averts Shutdown of U.S. Oil and Gas in the Gulf of Mexico

A federal judge has given the National Marine Fisheries Service five more months to complete a new biological opinion on protecting species in the U.S. Gulf of Mexico, averting what the oil industry had warned was a potential halt of new and existing oil and natural gas production and activity in the region.

Earlier this year, District Judge Deborah Boardman of the U.S. District Court in Maryland vacated, with effect from December 20, 2024, the so-called biological opinion of the National Marine Fisheries Service (NMFS), which is legally needed for drilling in offshore areas.

The court ruling from August was in a lawsuit brought against the federal government by climate activists. They claimed the current endangered species risk assessment regulation for oil and gas operations, commonly known as the biological opinion, was inadequate and a new one was needed. The judge agreed and ruled that NMFS had until December 20 to update the regulation.

However, oil industry groups argued that NMFS should be allowed more time to complete a new opinion. With the opinion initially slated to lapse on December 20, and without a new one by then, the “court decision has the potential to halt or seriously slow all operations in the U.S. Gulf of Mexico, leaving a critical source of energy supply and economic security in jeopardy,” American Petroleum Institute (API) President and CEO Mike Sommers wrote in a letter to Secretary of Commerce Gina Raimondo in September.

On Monday, Judge Boardman ruled that the biological opinion is now vacated and invalid as of May 21, 2025—essentially giving NMFS five more months to complete a new opinion.

API welcomed the delay, with Senior Vice President and General Counsel Ryan Meyers saying that the ruling “provides only temporary relief and work still must be done to avoid disruptions to the backbone of our nation’s energy supply.”

“We stand ready to work with NMFS and offer our industry’s expertise to complete a new biological opinion that balances environmental protection and the world’s growing need for affordable, reliable energy.”

By Tsvetana Paraskova for Oilprice.com

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