States sue US to block rule requiring oil industry to pay for dismantling old wells

FILE PHOTO: A pump jack drills oil crude from the Yates Oilfield in West Texas’s Permian Basin, near Iraan, Texas, U.S., March 17, 2023. REUTERS/Bing Guan/File Photo

By Georgina McCartney

HOUSTON (Reuters) - Texas, Louisiana and Mississippi on Monday sued the U.S. government to block the Biden administration's proposed rule that would require the offshore oil and gas industry to provide nearly $7 billion in funds to cover costs of dismantling old infrastructure.

The rule, which would go into effect later this year, applies to companies that do not have investment grade ratings or sufficient proven oil reserves. It could hit around three quarters of operators in the Gulf of Mexico, according to the U.S. Bureau of Ocean Energy Management (BOEM).

(Reporting by Georgina McCartney in Houston; Editing by Dave Gregorio)