American Energy Act Slashes Judicial Power, Makes Stopping Oil Leases Nearly Impossible

The newly introduced American Energy Act is all about speeding up oil and gas development by cutting through red tape—specifically, the kind of red tape involving lawsuits and environmental reviews. This bill makes two major moves: it changes how drilling permits are processed when litigation is pending, and more importantly, it severely restricts the ability of federal courts to halt oil and gas lease sales and development.

The Permit Process Just Got Faster (Even When You Sue)

Section 2 of the Act targets the administrative logjam that happens when a drilling project is challenged in court. Right now, if an environmental group sues over a drilling permit application, the whole thing often gets put on hold. This bill changes that. It mandates that the Secretary of the Interior must continue processing a drilling permit application, even if there’s a lawsuit challenging the underlying lease or the permit itself. The only exception is if a federal court has already fully canceled (vacated) the lease entirely. For the average person, this means that even if a valid legal challenge is underway to stop a controversial project, the administrative wheels keep turning toward approval. Furthermore, any new drilling permit approved under this Act will now expire after four years, effectively putting a hard deadline on developers to get started or lose their permit.

The Courts Can Barely Touch Lease Sales Now

Section 3 is the heavy hitter, taking aim directly at environmental litigation and judicial review under laws like the National Environmental Policy Act (NEPA). This section makes it incredibly difficult for a federal judge to stop an oil and gas lease sale or prevent development on an already awarded lease. To issue an injunction (a stop order), the court must now find two things are true: first, that letting the project proceed poses a risk of immediate and major environmental damage, and second, that there is no other fair legal solution available to address that damage. Think about that standard: immediate, major damage, and no other way to fix it. This sets the bar so high that it makes effective judicial intervention a rare event, essentially limiting the courts to only stopping projects that are already causing catastrophic, unfixable harm.

Bidding Wars Trump Environmental Reviews

There’s another critical limit in Section 3 that impacts the timing of lawsuits. Under current law, courts can sometimes halt the final awarding of a lease if there’s a pending NEPA lawsuit arguing the environmental review was inadequate. This bill explicitly states that once the Department of the Interior has opened the bids and identified the high bidder for a lease, a court cannot issue an order preventing that lease from being awarded. This means that even if a lawsuit alleging a seriously flawed environmental review is ongoing, the government can finalize the lease deal. For those concerned about environmental oversight, this provision effectively removes the court’s ability to pause the process at the most crucial stage, guaranteeing that the lease is finalized before the environmental merits of the case can be fully heard and decided. The net effect is a significant reduction in the public’s ability to use the courts to ensure responsible energy development.