President Biden took a shot at the incoming Trump administration this week by issuing a sweeping ban on new oil and gas leasing across large swaths of U.S. offshore waters. Using his authority under the Outer Continental Shelf Lands Act (OCSLA), the President withdrew more than 625 million acres of ocean from potential energy development—including the entire Atlantic and Pacific coasts, portions of the Eastern Gulf of Mexico, and areas of the Northern Bering Sea. Not surprisingly, Republicans met Biden’s order with skepticism, and Donald Trump vowed to undo it. But the path to reversal is uncertain, as Republicans may need to turn to Congress or the courts for support.
Controversial History
To understand the current situation, it helps to revisit the policy pendulum that has swung back and forth over the last two decades. Former President Obama used the same OCSLA authority late in his second term to withdraw significant portions of the Arctic and Atlantic Oceans from oil and gas leasing. These moves were intended to be permanent, based on a legal interpretation that the law allows presidents to withdraw areas but not to reverse such withdrawals.
Nevertheless, President Trump issued an executive order in 2017 to reverse Obama’s withdrawals and reopen areas to leasing. That effort was met with legal resistance, and in 2019, an Alaska federal district court ruled that Trump’s action exceeded his authority under the OCSLA. The court effectively reinstated Obama’s protections, stating that while the law grants a president the power to withdraw lands, it does not explicitly allow reversals.
Trump’s administration appealed the decision to the Ninth Circuit, but before the case could be decided, President Biden took office and his administration chose to revoke Trump’s order entirely, making any appeals moot. The Ninth Circuit dismissed the case before making any determination on the issues at hand.
It is reasonable to conclude another court might reach a different conclusion than the federal court in Alaska. In 2008, President George W. Bush issued a memorandum that rescinded portions of the offshore drilling moratorium established by his father, President George H. W. Bush, in 1990 and renewed by President Bill Clinton in 1998. This precedent highlights the evolving nature of presidential authority over offshore leasing decisions.
The Role of Congress
Given the unresolved legal questions surrounding OCSLA’s withdrawal authority, it may be time for Congress to step in and settle the matter definitively. Budget reconciliation offers perhaps the best potential avenue. Unlike most legislation, reconciliation bills cannot be filibustered in the Senate, making them easier to pass with a simple majority. Leasing revenues from offshore oil and gas are directly tied to the federal budget, meaning changes to leasing policy could be included in a reconciliation package.
Similar leasing provisions have been included in reconciliation bills in the past, including the Inflation Reduction Act of 2022. As part of budget legislation being crafted for later this year, Congress could therefore mandate specific instructions to expand leasing in the contested areas.
Congress could also address the offshore leasing issue through regular legislation, subject to the Senate’s 60-vote threshold to overcome a filibuster. But this would necessitate bipartisan support, a tall order in the current political climate.
Executive Action and Legal Risks
It’s also worth considering whether Donald Trump should attempt to undo Biden’s withdrawal through a new executive action. While the 2019 court ruling suggests that OCSLA withdrawals are permanent, the decision was never tested at the appellate level, leaving some possible room for legal maneuvering. Trump’s incoming administration could argue that the law’s silence on reversals does not explicitly prohibit them, setting up another legal battle.
Pursuing such a strategy comes with inherent risks. A court ruling against the reversal could solidify the permanence of these withdrawals, effectively entrenching the status quo. However, this very status quo might make taking the risk worthwhile, as a favorable ruling could reintroduce flexibility to presidential authority under the OCSLA. Either outcome underscores the pressing need for Congress to step in, clarify the law, and create a more consistent and predictable framework for offshore energy development.
Conclusion
President Biden’s recent withdrawal of offshore areas from oil and gas leasing is far from the final word on the matter. The legal questions surrounding OCSLA withdrawals remain unresolved, and the back-and-forth of executive actions over more than a decade highlights the need for a permanent solution. Congress has the tools to act, whether through budget reconciliation or regular legislation.
Offshore oil and gas development generates substantial revenue for the federal government, supports job creation, and strengthens energy security. Expanding offshore leasing is a practical, if not necessary, step to ensuring a prosperous America with abundant energy supply. Most likely, it is up to Congress to take action and resolve this issue.