Almost the entire U.S. coastline from Alaska to New England, with the exception of Florida, would be opened to offshore drilling under a new proposal by the Trump administration.
This move is a drastic shift from previous administrations that limited offshore oil and gas production primarily to the Gulf of Mexico.
Interior Secretary Ryan Zinke initially said last Thursday up to 90 percent of the Outer Continental Shelf, which begins roughly three miles off the U.S. mainland, is under consideration for oil and gas lease sales beginning next year and extending through 2024. That includes almost the entire Pacific and Atlantic coastlines.
That stance changed a bit as the Florida governor, Republican Rick Scott, met with Zinke, who then said drilling would be “off the table” when it comes to waters in the eastern Gulf of Mexico and the Atlantic Ocean off Florida.
“This is the largest number of lease sales ever proposed,” Zinke said last Thursday. “If you look at the last eight years the opportunity to generate revenue through responsible energy development took a backseat to, in many cases, special interest groups.”
But then politics came into play and special Republican interests got their way for Florida.
Whether Florida is involved our not, the move marks a victory for the offshore oil and gas industry, largely centered in Houston, which has lobbied for years to drill in the Atlantic and Arctic Oceans.
Most of the world’s biggest oil companies, including Exxon Mobil, Chevron and Royal Dutch Shell, have a major presence in Houston, as do firms specializing in offshore drilling and services, including TechnipFMC, National Oilwell Varco, McDermott International and Transocean.
Vast stores of oil and gas are believed to lie beneath the ocean floors of the Arctic and Atlantic. And while test wells have turned up little hard proof as of yet, the areas represent potential new frontiers for an industry eager to expand its reserves.
President Donald Trump’s effort to advance his plan for U.S. “energy dominance” by expanding offshore drilling faces a number of challenges, particularly low oil prices that have curtailed offshore exploration.
Many oil companies are focusing investments in lower-cost and higher-margin shale projects in West Texas and other onshore fields.
Crude settled Thursday at $62.01 a barrel, well below prices in 2008, when oil companies spent tens of billions of dollars competing for drilling rights in the Arctic Ocean. Earlier this year, a federal lease sale in the Gulf of Mexico drew what Trump officials conceded Thursday was less than stellar interest from oil companies.
When former President Barack Obama considered expanding offshore drilling into the Atlantic Ocean in 2015, protests erupted up and down the Eastern Seaboard as environmentalists clashed with pro-business politicians – including some Democrats – eager to attract the economic boost of oil and gas drilling.
Obama ultimately used his presidential authority to ban drilling in the Atlantic.
Trump’s plan would open a much more extensive stretch of coastline to drilling.
Under Trump’s proposal, the Interior Department would hold 47 lease sales between 2019 and 2024, including 19 off the coast of Alaska, seven in the Pacific region, 12 in the Gulf of Mexico, and nine in the Atlantic region.