Environmental Policy News

Will Trump Administration Ramp Up Offshore Drilling?

With President-elect Donald Trump picking Montana Congressman Ryan Zinke to run the Interior Department (DOI), it’s clear that a Trump Administration will aim to expand oil and gas development on public lands, but in light of recent rules from BOEM, just how fast this happens remains to be seen.

Zinke aligns with the Trump Administration’s stated goal of increasing industry access to previously untapped fossil fuel deposits by reducing government regulation and making more public lands available for lease through the Department of the Interior. During his time on the House Natural Resources Committee, Zinke regularly clashed with environmentalists over oil and gas drilling on public lands.

Even before naming Zinke, Trump’s pick of ExxonMobil CEO Rex Tillerson for the U.S. Secretary as State signaled that a Trump Administration will be pro-development, including in places like the Arctic.

In 2011, under the guiding hand of Tillerson, Exxon made an historic deal giving it access to Arctic and other deposits in Russia, while allowing state-owned Rosneft its first-ever access to energy projects in the U.S. The partnership was thwarted however, due to U.S. and EU sanctions in response to Russia’s invasion of Crimea. That is a complicated geopolitical story outside the scope of this article but, in short, Tillerson is bullish on offshore drilling, even in remote areas, as are Trump’s proposed EPA head and all of his proposed candidates for Energy Secretary.

The oil industry clearly expects Trump to favor an increase in offshore drilling leases.

For example, in November, Michael Tadeo of the American Petroleum Institute (API) released a statement saying, “As a candidate, President-elect Trump pledged to pursue an energy approach that would include opening federal lands for oil and gas production including offshore areas.”

The API was just as enthusiastic about Trump’s pick to head the EPA, Oklahoma Attorney General Randy Pruitt. API CEO Jack Gerard said, “We look forward to working with Mr. Pruitt, the new administration, and the new Congress on policies that will keep energy affordable, create jobs, and strengthen our economy as we lead the world in the production of oil and natural gas and reducing carbon emissions.”

Another friend to the oil industry, former Texas Governor Rick Perry, has been slated to head the U.S. Energy Department under a Trump Administration. Perry is an outspoken backer of opening up more land (and offshore areas) for drilling and hydraulic fracturing, or fracking.

Environmentalists panned each of the picks, including Perry, Pruitt, and Zinke.

“The Cabinet choices become more absurd every day,” said Rhea Suh, president of the Natural Resources Defense Council.

Speaking on Pruitt, Earthjustice President Trip Van Noppen said, “He has long opposed responsible rules for cutting toxic pollution, including the EPA’s Clean Power Plan, and he’s been in lockstep with the oil industry for years.”

Earthjustice, along with other environmental advocates, have promised to block the Trump Administration from expanding U.S. oil and gas drilling by taking them to court.

How Soon Can Trump Change Current Rules?

Notwithstanding all that, some have said that because the Bureau of Ocean Energy Management (BOEM) just released its draft five year program for offshore leasing, the soonest a Trump Administration could expand offshore drilling in the US is 2023.

Is this true? Well, it depends on who you ask. Yes, the current requirements for expanding drilling include public notice, hearings and environmental impact statements, all of which take time, and cannot be sidestepped without legal challenges from environmental groups, indigenous peoples, and state governments. This almost ensures that he cannot accomplish such a change in a single term. Almost.

There is also a chance that he challenges the most recent five year program from BOEM under something called the Congressional Review Act. Because BOEM’s most recent five year program was released on 18 November 2016, whether or not the Trump Administration has time to challenge it depends on how you interpret the following phrase: sixty legislative days. Because that is how long they have under US Code Title 5, Sections 801-808. to overturn BOEM’s draft five year program.

Let’s look at BOEM’s draft program.

In the Offshore Oil and Gas Leasing Plan for 2017-22, BOEM made the Chukchi and Beaufort Seas, as well as the Atlantic Coast, off limits for offshore drilling. While the plan did include one sale off the coast of Alaska (in the Cook Inlet area), it is clear that the Obama administration takes the environmental risks of drilling in the Arctic seriously.

The five year program cited “current market dynamics, strong local opposition and conflicts with competing commercial and military ocean uses” as reasons that areas off the Atlantic Coast were not included in the program. Similar reasons that coast states oppose oil and gas development meant no leases in the Pacific. Meanwhile, the Gulf of Mexico plan includes ten sales and the plan called the Gulf “one of the most productive basins in the world - where resource potential and industry interest are high, and oil and gas infrastructure is well established.”

So, some of the reasons why leases aren’t granted are due to opposition from environmental groups and states who don’t want offshore drilling, but that’s not all to this story. Another question sure to arise is whether, given the current low cost of oil, companies will drill even if they can gain more leases. Will they hold the leases for future plans? Or will this create too much of a liability or tax burden?

One thing is for sure, the “sixty day” period will get even more interesting as it nears expiration, and whatever happens, you can be sure we’ll cover it in ECO.

For more information on the 2017-2022 Five Year Outer Continental Shelf Oil and Gas Leasing Program, including maps, click here.

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