Top oil trade group warns court order could shut down Gulf of Mexico production

The American Petroleum Institute, the largest oil trade group in the United States, is warning that a court order issued last month could shut down all oil and gas drilling in the Gulf of Mexico.

The oil industry group sent a letter to Commerce Secretary Gina Raimondo on Friday, saying that the decision issued by the U.S. District Court for the District of Maryland could put the country’s “economic security in jeopardy.”

It comes just weeks after the district court ruled in favor of a number of environmental groups that filed a lawsuit after the National Marine Fisheries Service issued its 2020 Biological Opinion on offshore oil and natural gas production in the Gulf of Mexico.

The groups said that in the opinion (which is required to ensure drilling and other developments do not threaten endangered species), the agency underestimated the environmental effects of oil spills on local wildlife, such as sea turtles, the Rice’s whale, and more.

On Aug. 19, the district court found the opinion to be unlawful and vacated as of December 2024. While a new opinion has been ordered to be produced by the same month, the agency has informed the court that it likely won’t be complete until early 2025.

API warned that these expected delays may cause a “significant bureaucratic bottleneck” for the industry.

The oil group said that if a solution is not found by the end of this year, when the document will no longer be considered valid, NMFS will “likely experience” thousands of consultation requests that would further delay the creation of a new opinion.

“Without a solution in place, this 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,” API said in the letter.

The Gulf of Mexico generates around 15% of all domestic oil production and 2% of natural gas production, adding more than $34.3 billion to the country’s gross domestic product and $6.1 billion in federal government revenue, the group said.

Given the area’s economic production, API emphasized the importance of completing a new opinion as soon as possible.

“It is in the best interest of U.S. consumers, the federal government, and oil and gas producers to partner to resolve this issue,” the group said.

The Department of Commerce did not respond to the Washington Examiner’s request for comment.