Analysis by Energy Workforce President Tim Tarpley
A U.S. District Court in Maryland recently ruled to vacate the National Marine Fisheries Services’ (NMFS) Biological Opinion for the Gulf of Mexico due to concerns that the Rice Whale habitat was not considered when the opinion was drafted in 2020 due to the fact that the Rice Whale was not yet identified as a unique species at the time. The practical consequence of this ruling is that any permit that relies on this opinion (which is a significant portion of all permits for operations in the Gulf) could be put on hold if a solution is not found by December 20th. The bottom line is that come December 20, a substantial swath of offshore oil and gas operations could have to be shut down or significantly slowed unless a legal, regulatory or legislative solution that prevents a gap between biological opinions is in place before then.
So what does this all mean? At this point, there are a few paths forward. First, it’s possible that the stay is successfully appealed to a higher court, and the decision is reversed or altered. The stay could be completely delayed or extended to a point at which a new biological opinion could be produced. There are legal efforts underway now to try and make that happen. This would be the easiest solution. Secondly, NMFS could produce a new Biological Opinion that includes the Rice Whale before the December 20th deadline. This option seems unlikely as the agency has already indicated that there is enough time to prepare an opinion in time. If this is the only available option, there is a strong likelihood that there will be a shutdown for some period of time, probably a few months. Thirdly, it is possible to get some language added to a larger bill that would pass Congress and become a law that would mitigate the effects of this ruling. This language would have to be agreed to by leadership in both parties in the House and Senate because end-of-year omnibus packages will have to go through both chambers.
EWTC along with our collaborating energy trade associations are already working together on this option. We believe that it is important to work on this option, so we have a fallback if the legal challenges fail or are not completed in time. The results of the election could obviously change the political calculation and chances of success of this strategy. Negotiations for when and how the large spending packages will be structured are ongoing. Updates on this important issue will be included in our newsletter in the coming weeks.
Energy Policy Shows up to Presidential Debate But Only Briefly
The first and potentially only Presidential debate between former President Trump and Vice President Kamala Harris occurred on Tuesday of this week. While many analysts agree that the Vice President performed better, how the debate will actually affect the polls, and the outcome of the election is less clear at this point. We will need to wait a few weeks to see if there is a measurable change in the polling trends in this race, which all indications are is still very close.
There was a hope that the candidates would get a question, or a series of questions, on energy policy that would allow us to dig a bit deeper as to the actual policy goals, especially on Vice President Harris’s side, as so far, her policies on energy have been elusive. Unfortunately, that did not really happen. While Vice President Harris again stated that she would not ban fracking and also touted her support of the Inflation Reduction Act as an example of her support for additional leases in the United States. There was no follow-up on this statement by the moderators, and in fact, the language in the IRA was included due to long-term delays and slowed walking by the Biden Administration on leasing. So, it is not truly accurate to tout the passage of the IRA as a pro-leasing piece of legislation. There are also many provisions of the IRA, such as the methane fee, which could discourage production in the US and make it more expensive than production elsewhere.
There was also some back-and-forth on the Biden Administration’s cancellation of the Keystone XL permit. Other than this brief back-and-forth, there was very little actual discussion of energy issues to help bring us any clarity. It is unclear if there will be another debate, with the Vice President’s team already calling for one but former President Trump indicating he may not agree to another one.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
