A federal court in Alaska overturned on the night of July 16 an oil and gas lease sale that had been mandated by the Biden administration's signature climate law as part of a political compromise, on grounds that the U.S. government violated the law when holding the sale.

This ruling affects a lease sale held in December 2022 of offshore tracts for oil and gas development in the Cook Inlet in the northern Gulf of Alaska that had been mandated as part of a compromise to pass the 2022 Inflation Reduction Act.

The court decision is a victory for environmental groups that had objected to the inclusion in the IRA of oil lease sales that had been previously cancelled. The sale opened nearly a million acres of federal waters in Alaska to oil and gas development.

U.S. Senator Joe Manchin from conservative West Virginia, whose vote was crucial for passage of the IRA, tethered oil lease sales to offshore wind lease sales in the IRA to encourage U.S. President Joe Biden to continue to hold drilling auctions.

The federal district court found that the Interior Department failed to consider a reasonable range of alternative leasing areas, which violates the National Environmental Policy Act, did not weigh the impact of vessel noise on Beluga whales in the area and did not assess the "cumulative impact" of this sale on the environment.

Two other lease sales enshrined in the IRA are currently being litigated.

“Today’s legal victory is a win for Alaska communities, threatened beluga whales and future generations who will face a hotter planet,” said Carole Holley, an attorney at environmental law organization Earthjustice, who represented the plaintiffs.

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