Trump signs executive order that could expand offshore energy development

Key Points
  • President Donald Trump will instruct the Interior Department to revise the Obama administration's five-year plan for developing federal waters.
  • His executive order will tell the Commerce Department to refrain from naming or expanding marine sanctuaries and review existing ones.
  • Trump will seek to overturn President Barack Obama's effort to indefinitely put much of U.S. Arctic waters and part of the Atlantic off limits to drillers.
Trump signs executive order on offshore energy strategy
Trump signs executive order on offshore energy strategy

President Donald Trump on Friday instructed his Cabinet officials to take actions that will potentially open new areas of federally administered waters to energy development.

The actions, spelled out in a new executive order, mark Trump's latest effort to lift limits on oil and gas drilling and coal mining put in place by his predecessor. The move sets in motion a potential reversal of President Barack Obama's last-minute attempts to withdraw vast swaths of U.S. waters from lease sales to fossil fuel companies.

Trump put particular emphasis on one aspect of the order: rescinding Obama's executive action that aims to indefinitely place off limits to drillers much of the Arctic waters off Alaska's shores, as well as parts of the Atlantic Ocean.

"It reverses the previous administration's Arctic leasing ban. So, you hear that? It reverses the previous administration's Arctic leasing ban," he said before signing the order.

Curraheeshutter | Getty Images

That move probably tees up a legal challenge because Obama used a novel interpretation of a provision in the Outer Continental Shelf Lands Act. Obama's supporters and critics disagree on whether the provision gives Trump the authority to override his ban, and environmentalists are likely to sue over Trump's order.

"Trump's short-sighted order reverses climate progress and imperils coastal communities, irreplaceable wildlife and our shared future. It is also against the law. We will go to court to enforce the law and ensure President Obama's protections remain in place," Earthjustice President Trip Van Noppen said in a statement.

The America First Offshore Energy Executive Order instructs the Interior Department to revise the current-five year schedule for leasing blocks of the U.S. outer continental shelf, the waters off the U.S. shore that the federal government governs. That process, which includes conducting environmental impact studies and taking public comments, takes at least two years.

U.S. outer continental shelf

Revisions happen regularly when a new president takes office; Obama initiated a new five-year planning process in his first term. In its plan for 2017-2022, the Obama administration offered a conservative selection of leases in the western and central Gulf of Mexico and Alaska's Cook Inlet, leaving contested areas like the Atlantic, Pacific and eastern Gulf of Mexico off the table.

The White House suggested it would prefer to expand its options, stressing in a fact sheet that most of the outer continental shelf is not currently available for development.

"Past administrations have been overly restrictive of offshore energy exploration and have taken off the table hundreds of millions of offshore acres for development. As a result, 94 percent of the Outer Continental Shelf is off-limits to responsible energy development," the administration said in a statement.

To be sure, and a host of factors play a role in whether or not territory is put up for lease, including local support, industry interest, oil prices and availability of current geological data.

But the U.S. Chamber of Commerce applauded the action Friday, saying past management of offshore U.S. assets has deprived consumers and businesses of "vast opportunities."

"We are hopeful that this evaluation will lead to opportunities for production in the Mid-Atlantic, the Gulf of Mexico, including the Eastern Gulf of Mexico, and expanded access in Alaska," Karen Harbert, president and CEO of the chamber's Institute for 21st Century Energy, said in a statement.

However, it is uncertain how the oil and gas industry would respond to a more expansive lease schedule. Drillers have scaled back expensive offshore exploration amid a protracted oil price downturn.

This week, the International Energy Agency reported that just 13 percent of conventional oil projects that got the go-ahead last year were offshore. That compares to an average of 40 percent of projects between 2000 and 2015. New offshore projects typically take at least seven years to ramp up.

The executive order encourages the Interior and Commerce departments to streamline the process for privately funded surveys of resource basins. It also instructs Interior to review a handful of offshore drilling rules and regulations.

Trump's order tells the Commerce secretary to refrain from designating or expanding any national marine sanctuaries and to review protected areas named or enlarged in the last 10 years.

This component would also take aim at Obama's legacy. Last year, he expanded a national marine monument in his home state of Hawaii to create the largest protected ecological area in the world. He designated the first fully protected Atlantic Ocean monument off the coast of New England a month later.