A Trump U.S. Energy Boom The next President can open Arctic and Atlantic drilling that Obama has shut down.
http://www.wsj.com/articles/a-trump-u-s-energy-boom-1480021460
Donald Trump this week released a video detailing the plans for his Administration’s first 100 days, and one bright spot is his agenda for American energy. The President-elect promised to peel away government obstacles, and he will have plenty of work after President Obama’s eight-year regulatory onslaught.
“I will cancel job-killing restrictions on the production of American energy, including shale energy and clean coal, creating many millions of high-paying jobs,” Mr. Trump said in his two-minute clip. “That’s what we want, that’s what we’ve been waiting for.”
Here’s one place to look: Last week the Obama Administration finished a five-year plan for offshore drilling contracts and canceled planned leases in the Arctic through 2022. That retreat is a reaction to protests from environmental groups, which melted down after a March Bureau of Ocean Energy Management draft included a sliver of drilling in the frozen North.
Leases off the Atlantic Coast were already excluded, and green groups hope Mr. Obama will make these diktats permanent under an arcane clause of the Outer Continental Shelf Lands Act. But that executive overreach is unlikely to stand up in court.
Mr. Obama says there’s no reason to drill in the Arctic because oil prices are so low, as if the government can predict energy prices five or 10 years from now. The Arctic region is thought to hold 90 billion barrels of oil, and up to 30% of the world’s untapped natural gas. Exploration and drilling would create thousands of jobs, and most resources lie in relatively shallow waters fewer than 100 meters deep.
Regulation is already crushing: A report last year by the National Petroleum Council noted that a company needs permits from some 12 federal and state agencies merely to dig an exploration well in the Arctic. Recall that Shell spent seven years and $7 billion trying to exploit leases it had already paid for off Alaska’s Arctic coast before giving up. Russia is already exploring in the Arctic and won’t be deterred by American moralizing.
The Trump Administration may be tempted to cancel the Obama plan, but that would blow up leases in the Gulf of Mexico and Alaska’s Cook Inlet included in the outline. This means the new Administration would have to put out a new plan, say, for 2019 through 2024, that would supersede earlier orders. That will probably take at minimum 18 months, though both the Atlantic and Arctic regions have recently undergone environmental-impact evaluations, which should expedite the process.
The Obama Administration intends to make these drilling regulations as calcified as possible, and the Arctic is the tip of the iceberg. But more than 85% of area offshore controlled by the federal government is closed to exploration. Mr. Trump can unlock this potential, which would be a gusher for global consumers and American economic growth.
Comments are closed.
