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Obama Administration Rescinds Planned Lease Sales in Arctic
| Wall Street Journal | - |
WASHINGTON—The
Obama administration announced Friday that it was rescinding plans to
allow two oil and natural-gas lease sales in the Arctic Ocean, a move
that might be reversed by President-elect Donald Trump, who has vowed to
lift federal ...
Obama Administration Rescinds Planned Lease Sales in Arctic
Interior Department still to offer one lease off Alaska; move could be reversed by president-elect
ENLARGE
Interior Secretary
Sally Jewell announced on Thursday that the federal government canceled
25 leases for oil and gas wells on pristine federal land in Colorado. On
Friday her department said it was rescinding plans to allow two oil and
natural-gas lease sales in the Arctic Ocean.
Photo:
David Zalubowski/Associated Press
The decision, supported by environmentalists but sure to be criticized by industry, is part of a broader push by Mr. Obama to pursue an ambitious climate-change agenda, and a more recent sprint to release rules before he leaves the White House.
In the Interior Department’s final offshore leasing blueprint, the government removed two lease sales it had earlier this year said it planned to offer between 2017 and 2022 in the Arctic Ocean off Alaska’s northern coasts. It said it still plans to offer one lease sale in the Cook Inlet off the southern coast of Alaska, not in the Arctic, along with 10 lease sales in the Gulf of Mexico.
“The plan focuses lease sales in the best places—those with the highest resource potential, lowest conflict, and established infrastructure—and removes regions that are simply not right to lease,” said Interior Secretary Sally Jewell. “Given the unique and challenging Arctic environment and industry’s declining interest in the area, forgoing lease sales in the Arctic is the right path forward.”
The department in October 2015 canceled two other lease sales in the Arctic Ocean it had planned to offer this year and next year, citing low oil prices and the announcement from Royal Dutch Shell PLC a week earlier that it was quitting its $7 billion campaign to drill in the region.
Areas above the Arctic Circle, mostly offshore, could hold vast reserves of undiscovered oil and natural gas. The region, including parts owned by other countries, is estimated to hold 90 billion gallons of oil and 1,669 trillion cubic feet of natural gas, according to a 2008 U.S. Geological Survey report.
The U.S. consumes nearly 20 million barrels of petroleum products a day and nearly 30 trillion cubic feet of natural gas a year, according to the U.S. Energy Information Administration.
The Interior Department’s blueprint, required by law every five years, governs offshore leasing for oil and natural-gas drilling in federal waters between 2017 and 2022, including the Arctic Ocean and Gulf of Mexico. After initially offering a lease sale off the Atlantic coast, the department withdrew that sale later in the planning process.
The plan requires a 60-day review period by Congress, a final step Obama administration officials hope to complete just under the wire before Jan. 20, Inauguration Day for Mr. Trump.
While the administration doesn’t need Congress to sign off on the deal, it is unlikely the GOP-controlled Congress and the newly elected GOP president will let Mr. Obama’s plan stay intact as-is, seeking changes or wholesale withdrawal through either legislation or other avenues.
Jack Gerard, president and chief executive of the American Petroleum Institute, which represents all parts of the U.S. oil-and-gas industry, criticized the move and expressed hope Mr. Trump would reverse it.
“Today’s announcement is a short-sighted decision that ignores America’s long-term energy security needs,” Mr. Gerard said. “Our national energy security depends on our ability to produce oil and natural gas here in the U.S., and this decision could very well increase the cost of energy for American consumers and close the door on creating new jobs and new investments for years.”
Environmentalists applauded the decision and generally sidestepped the prospect that Mr. Trump would move to reverse it.
“Today’s announcement demonstrates a commitment to prioritizing common sense, economics and science ahead of industry favoritism and politics as usual,” said Jacqueline Savitz, senior vice president for the U.S. at Oceana, an environmental group focusing on the world’s oceans.
Write to Amy Harder at amy.harder@
