Obama blocks new oil drill in Arctic

Bloomberg

The Obama administration is reversing course on opening Atlantic waters to a new generation of oil and gas drilling, after a revolt by environmentalists and coastal communities that said the activity threatened marine life, fishing and tourism along the U.S. East Coast.
The proposed offshore leasing program eliminates the administration’s initial plan to auction off drilling rights in as many as 104 million acres of the mid- and south-Atlantic in 2021, according to an Interior Department official who requested anonymity because the plan wasn’t yet public.
It is a major blow for the industry from a president who once promised an all-of-the-above approach to energy but is now moving aggressively to advance renewable power and cut the greenhouse gas emissions tied to burning fossil fuels.
Energy companies had eyed the U.S. Atlantic, where drilling was abandoned decades because of high development costs, as a promising frontier, with the potential to supplement eventual production declines on shore.
Obama’s decision leaves offshore oil producers, such as BP Plc, Chevron Corp. and Royal Dutch Shell Plc, largely confined to the long-tapped Gulf of Mexico. The Obama administration’s about-face also is a defeat for the governors of Georgia, South Carolina, North Carolina and Virginia, who had lobbied for nearby offshore drilling they say would create jobs and new economic activity.

‘Unnecessary Risk’
Environmentalists hailed the decision on Tuesday as a victory for whales, sturgeon and other animals that live in the Atlantic — as well as the fishermen, boaters and hotel operators whose lives and livelihoods are tied to those waters.
“President Obama has taken a giant step for our oceans, for coastal economies and for mitigating climate change,” said Jacqueline Savitz, U.S. vice president for the conservation group Oceana. “This is a courageous decision that begins the shift to a new energy paradigm, where clean energy replaces fossil fuels, and where we can avoid the worst impacts of decades of our carbon dioxide emissions.”
BP, Shell
Offshore drilling in the Atlantic is “an exploration activity that hopefully leads to the discoveries that give us our energy security and put us on a road to energy independence,” said Erik Milito, the American Petroleum Institute’s director of upstream and industry operations. “Canada, Cuba, Venezuela, South America, Europe, West Africa — they all do it, and we’re sitting back kind of witnessing it without exploring ourselves.”
It’s unclear how much oil and gas could be deposited along the U.S. East Coast; government projections using decades-old geological surveys estimate 3.3 billion barrels of oil and 31.3 trillion cubic feet of natural gas. Geologists say discoveries in other Atlantic waters around the world suggest even bigger potential.

Arctic Waters
The plan being released Tuesday is only the latest step in a long, multiyear process of developing the U.S. government’s five-year offshore leasing program, with both the available acreage and the number of auctions generally whittled over time.
The proposal may still set the stage for selling oil and gas leases in the Arctic waters of the Chukchi and Beaufort seas, as well as Alaska’s Cook Inlet and the Gulf of Mexico, where 10 auctions were tentatively scheduled from 2017 to 2022. It was unclear early Tuesday whether the administration had retained those auctions and all of that acreage.
Environmentalists have been lobbying the administration to spike lease sales in the Chukchi and Beaufort seas north of Alaska, saying drilling is too risky in those Arctic waters.

Trudeau Pledge
Conservationists argue the Interior Department must preclude Arctic drilling to fulfill a pledge President Barack Obama made with Canadian Prime Minister Justin Trudeau to weigh “the life-cycle impacts of commercial activities in the Arctic” and satisfy an international climate accord commitment to cut carbon dioxide emissions released when fossil fuels are burned.
“Any new offshore drilling will be a stain on President Obama’s climate legacy,” May Boeve, executive director of the group 350.org, said in a statement on Monday. “If the president is going to meet the targets he agreed to at the climate talks in Paris, he needs to keep fossil fuels in the ground or in this case, under the sea. We can’t afford any more oil spilling into the oceans and carbon pouring into the atmosphere.”
The proposed offshore plan will not affect oil and gas companies’ existing drilling rights in U.S. waters.

Campaign Issue
The drilling debate has stoked passions from the coastline to the campaign stump as former Secretary of State Hillary Clinton and Vermont Senator Bernie Sanders vie for the Democratic presidential nomination. Sanders has promised to block all offshore oil and gas development. Clinton told environmental activists she was “against drilling off the Atlantic” during an event last month in Norfolk, Virginia. The issue has not gotten significant attention in the Republican primary contest, where candidates generally support more domestic oil and gas
development.
In weighing which waters to lease, the government is required to consider an array of factors, including the interests of oil and gas producers, the goals of affected states, and the proximity of energy markets.
This isn’t the first time Obama has reversed a plan to open up the Atlantic for offshore drilling; he took similar steps to offer oil and gas leases along the East Coast in 2010 but reversed course after BP’s failed Macondo well blew out in the Gulf of Mexico, keeping the territory out of a 2012-2017 leasing program.