Trump Plans Arctic and Atlantic Offshore Leases

offshore

By MarEx 2018-01-03 03:10:29

The Trump administration intends to reboot the federal offshore oil and gas leasing program with a proposal to open Atlantic and Arctic waters to exploration, according to a new report. The proposed replacement for the Obama administration's five-year leasing program would roll back restrictions on these areas and greatly expand the possibilities for U.S. offshore drilling beyond the Gulf of Mexico.

The previous administration attempted a similar leasing program but scaled it back in the face of public opposition. In January 2015, the Obama administration released a draft OCS program that included three sale areas off Alaska - one sale each in the Chukchi Sea, Beaufort Sea, and Cook Inlet areas - and one off the coast of the Atlantic seaboard, including areas offshore Virginia, North and South Carolina and Georgia. 

However, following the withdrawal of Royal Dutch Shell from its drilling program in the Chukchi Sea in September 2015, the administration announced the cancellation of planned oil and gas lease sales for two years. In March 2016, it announced that it was withdrawing plans to lease exploration rights off the Atlantic seaboard as well. The revised five-year program did not "schedule any lease sales in the Mid- and South Atlantic Program Area due to current market dynamics, strong local opposition and conflicts with competing commercial and military ocean uses,” Obama's Department of the Interior said in announcing the change. 

"We heard from many corners that now is not the time to offer oil and gas leasing off the Atlantic coast,” said then-Secretary of the Interior Sally Jewell. “When you factor in conflicts with national defense, economic activities such as fishing and tourism, and opposition from many local communities, it simply doesn’t make sense to move forward with any lease sales in the coming five years.” 

At the time, American Petroleum Institute president and CEO Jack Gerard slammed the cancellation of the Atlantic leases. “This decision stunts the safe and responsible path to securing the domestic energy supplies future generations of Americans will need. This also wipes out an opportunity to create scores of additional new jobs for Americans along the Atlantic coast and nationwide,” he said.

Like the Obama administration's first-draft plan, reports Bloomberg, the Trump administration's proposal would open up areas of the Arctic and Atlantic OCS to drilling activity, and would potentially add areas off the Pacific coast as well. “We should keep as many options on the table for our future oil and gas and energy needs,” said Erik Milito, a director with the American Petroleum Institute, speaking to Bloomberg News. “The decisions that are being made now are really decisions about five, 10 and 15 years down the line."