President Donald Trump is preparing to issue an executive order with the goal of giving oil companies more opportunities to drill offshore, reversing Obama-era policies that restricted the activity.
The offshore drilling directive is set to be issued soon, Interior Secretary Ryan Zinke told an industry conference in Washington on Thursday, according to three attendees who spoke on condition of anonymity to discuss a session closed to the press. Zinke did not provide specific details on the executive order during his presentation to the National Ocean Industries Association.
The coming order is set to push the Interior Department to schedule sales of new offshore oil and natural gas rights in U.S. Atlantic and Arctic waters, amending a five-year Obama administration leasing plan that left out auctions there, according to an industry representative who has discussed it with officials.
The order is also expected to begin the process of revoking former President Barack Obama’s decision to indefinitely withdraw most U.S. Arctic waters and some Atlantic Ocean acreage from future leasing. Environmentalists say it would be unprecedented for any president to rescind such a designation, and the reversal would almost certainly be challenged in court.
Spokesmen for the Interior Department and White House did not respond to emailed requests seeking comment.
Trump’s move could benefit energy companies that now are focusing their U.S. offshore drilling programs on the Gulf of Mexico, including Royal Dutch Shell, Chevron Corp., Exxon Mobil Corp. and Statoil.
The Obama administration previously had considered selling leases in the Chukchi and Beaufort seas as well as 104 million acres of the mid- and south-Atlantic before ultimately foregoing those potential auctions. Though time consuming, restoring Arctic and Atlantic lease sales would be relatively straightforward.
But the Trump administration faces a bigger challenge in attempting to undo Obama’s decision to remove roughly 125 million Arctic acres and nearly 4 million acres in the Atlantic Ocean from future oil and gas leasing. Obama formalized those withdrawals by invoking an obscure provision in a 1953 law that does not explicitly give presidents the power to reverse previous designations.
Senator Lisa Murkowski, a Republican from Alaska, has stressed that the maneuver must be done carefully so it can survive legal challenges.
Environmentalists said that is precisely why the Trump administration would not be successful.
“The administration can stare all day at the statute Obama used to protect large parts of the Arctic and Atlantic, but they won’t find a syllable allowing Trump to revoke those protections. Neither will the courts,” said Niel Lawrence, Alaska director for the Natural Resources Defense Council.
“It’s hard to imagine riskier, more expensive or time-consuming places to look for oil,” Lawrence said by email. “It would be an extraordinary misuse of public dollars and agency resources to try to open them up now.”
The U.S. Arctic is estimated to hold 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Energy companies have struggled to tap those resources, given high exploration costs and sparse infrastructure to support the activity, but there has been a surge of interest in Beaufort Sea waters hugging Alaska’s coastline, after recent announcements of discoveries by Repsol SA and Caelus Energy Corp. Eni SpA also asked U.S. regulators to consider its plan for oil exploration in previously leased Beaufort Sea tracts. Go to Bloomberg to read more.
If this plan is materialised, it would mean that we should expect substantial volumes of crude oil to be added to the already existing supplies. Although, it is possible that oil companies would not show much interest due to much higher cost in Arctic waters and Atlantic Ocean as compared to US onshore operations. Hopefully, oil companies would also be turned off by stricter effective regulations regarding the conduct of offshore petroleum operations.
Having said that, it is also fair to highlight that the intent to introduce this executive order suggests that Donald Trump is not “hands on” president or should I say that Donald Trump solidified de facto his status as SO-CALLED President.
I do not think that anybody who is duly informed would decide to issue such order now. Because the timing for it is wrong. Or it might be an indication that he just does not know what he is doing. Possible.
The decision to issue this order now suggests that Donald Trump does not really care about environment issues. Lack of care about environment may serve as clear signal that Trump is likely to show little or no interest to join international community and comply with terms and conditions of the Paris Agreement including any other related agreements which could be in place in the near future.