The US and Canada agreed Tuesday to designate the majority of
their Arctic waters off limits to oil and natural gas drilling.
The US is also permanently withdrawing areas of its Atlantic waters
from future oil and gas leasing as well, according to the US
Department of the Interior.
In a statement, the White House said the "vast majority" of federal
US waters in the Chukchi and Beaufort seas and all Arctic Canadian
waters would be "indefinitely off limits" to offshore oil and gas
leasing.
The leasing prohibitions on Canadian waters would be reviewed every
five years through a "climate and marine science-based life-cycle
assessment," the White House said.
The withdrawal areas cover 3.8 million acres in the north and
mid-Atlantic Ocean off the East Coast and 115 million acres in the
US Arctic Ocean.
President Barack Obama will use Section 12(a) of the Outer
Continental Shelf Lands Act to permanently block new oil and gas
development in the Arctic and Atlantic, according to Jessica
Kershaw, an Interior spokeswoman. The 63-year-old provision allows
the president to "withdraw from disposition" any unleased lands in
federal waters.
Obama's decision, made with just a month left in his presidency,
sets up what are likely to be years of legal battles for the US oil
and gas industry and the incoming Trump administration to open
federal Arctic and Atlantic waters to drilling.
"We disagree with this last-minute political rhetoric coming from
the Obama Administration and contest this decision by the outgoing
administration as disingenuous," Dan Naatz, a senior vice president
with the Independent Petroleum Association of America, said in a
statement.
"With exactly one month left in office, President Obama chose to
succumb to environmental extremists demands to keep our nation's
affordable and abundant energy supplies away from those who need it
the most by keeping them in the ground," he said.
Tuesday's announcement follows a November decision by the Obama
administration to remove planned sales in the Chukchi and Beaufort
seas from the final 2017-2022 federal offshore leasing plan. A
proposed Atlantic lease sale had been removed from that plan in
March.
While President-elect Donald Trump was expected to redo the leasing
plan to include additional sales in federal waters, the process was
expected to take years.
But with the blocks on leasing for much of the Arctic and, possibly,
portions of the Atlantic, the incoming Trump administration would
likely face a tough legal battle to get the decision reversed.
"It's unclear if [Trump] would want to change something that has
such clear legal authority," said one source Tuesday.
But Christopher Guith, a senior vice president for policy at the US
Chamber of Commerce's Institute for 21st Century Energy, said
Tuesday the decision could be easily reversed by Trump once he is
sworn into office.
"There's no such thing as a permanent withdrawal," Guith said. "It
can be repealed with the stroke of a pen."
According to the latest government data on recoverable oil
resources, offshore Alaska has an estimated 26.6 billion barrels of
oil and 131.45 Tcf of gas. There are also 1.35 billion barrels of
oil and 9.87 Tcf of gas in the North Atlantic and 1.42 billion
barrels of oil and 19.36 Tcf of gas in the Mid-Atlantic.
--Brian Scheid,
brian.scheid@spglobal.com
--Edited by Keiron Greenhalgh,
keiron.greenhalgh@spglobal.com
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