Trump signs executive order for “America First” offshore drilling

President Trump issued an executive order on April 28th that aims to expand offshore areas in the Arctic, Atlantic and Pacific where companies can drill for oil and natural gas. The order reverses former President Obama’s orders, which restricted offshore drilling. An Obama executive order stopped US drilling in the Arctic, Atlantic and Pacific until at least 2022. It also blocked drilling indefinitely in certain Arctic and Atlantic areas, while introducing aggressive safety regulations.

The Trump order directs the Interior Department to review the current schedule for offshore drilling allowances. It would ask the Department to consider whether to abandon Obama’s indefinite drilling bans. The Department might also direct officials to investigate the possibility of changing some of Obama’s regulations on equipment, designed to stop out-of-control wells, as well as introducing standards specific to Arctic drilling.

Department of the Interior Secretary Ryan Zinke told reporters last week that “we’re going to look at everything,” adding that “a new administration should look at the policies and make sure the policies are appropriate.”

Under a lease sale plan approved by Obama last year, 10 sites in the Gulf of Mexico would be available through to 2022. If the administration wants to sell further drilling rights, it would have to go through an extensive process to write a new plan. That process includes multiple proposals and opportunities for public comment, which took the Obama administration nearly two years, so would presumably take the Trump administration at least as long to implement new plans.

Congress put the eastern Gulf of Mexico, near Florida, off-limits until 2022, and for the time being no Trump order can change that. The most recent new drilling in the Atlantic was in the 1980s, while some recent exploratory drilling in the Arctic by Royal Dutch Shell was recently abandoned, at least temporarily, as non-cost-effective at current prices.

The Trump executive order did not specifically mention California or the Pacific Ocean as potential areas for oil development, but left the door open to the possibility. President Trump painted a golden future of “great wealth” and “great jobs”. But California has been passing regulations and legislation for years to prevent additional drilling along its coast. Although the oil industry praised Trump’s executive order, there was little enthusiasm for new drilling along the California coast. The $50-per-barrel price, tied with expensive offshore operations and steep regulatory hurdles, make the region unattractive. There are 27 oil platforms off California’s coast, but no new leases have been granted in federal waters since 1984. Most of the state’s oil production occurs on land.

Secretary Zinke acknowledged the likelihood of resistance to offshore drilling in California. He said that federal officials would incorporate local input before making

any decisions. “I was out in Santa Barbara recently,” he said. “There’s a lot of people who don’t like it out there.”

Democratic Party State Senator Hannah-Beth Jackson announced new legislation on Friday that would bar California state commissions from allowing any new oil infrastructure along the coast, from piers to pipelines. It will be introduced this week.