Outgoing President Barack Obama used his executive authority to “permanently” ban oil drilling in parts of the Arctic and Atlantic oceans, but this move may be illegal, according to an industry group.
Obama’s administration used a legal strategy crafted by environmental activists to remove sections of the Arctic and Atlantic oceans from future offshore drilling lease sales, which they claim will be “permanent.”
“It is pretty clear that this is a hollow 11th hour action,” Christopher Guith, a senior vice president at the U.S. Chamber of Commerce, told The Daily Caller News Foundation. “In spite of the narrative that extreme interest groups who pushed the White House to do this, there’s nothing about this that’s permanent. The White House itself didn’t use the phrase permanent, they said it was ‘indefinite.'”
The administration and its environmental allies used Section 12(a) of the Outer Continental Shelf Lands Act, a 1953 law governing offshore drilling, in an unprecedented way to block offshore drilling leases in the Atlantic Ocean and the Chukchi and Beaufort seas.
“This flies in the face of how we do offshore leasing,” Guith continued. “Every 5 years, we have to do a new offshore leasing plan. There’s already precedent for a new President rescinding his predecessors withdrawal. George W. Bush rescinded Clinton’s offshore drilling ruling already when gas prices were high.”
Environmentalists hope it will take Trump or Congress years to repeal an Obama decision to permanently keep Arctic and Atlantic areas off limits to drilling, but a simple lawsuit could overturn all of that.
“I’d be very suprised if somebody like the State of Alaska or an industry group didn’t sue President Obama immediately,” Guith told TheDCNF.” There are a lot of questions about whether Obama’s ruling followed the law. By the time it gets to court, the Obama administration is now the Trump administration. That will be a huge policy difference.”
Alaska is a particularly good spot for offshore drilling as the Beaufort and Chukchi Seas contain an estimated 23.6 billion barrels of oil and 104.4 trillion cubic feet of natural gas. Developing offshore drilling is supported by 73 percent of Alaskans, according to a 2014 poll. Studies by industry groups estimate that offshore drilling would create 840,000 American jobs and nearly $200 billion in revenue for the government by 2035.
Offshore drilling in the Atlantic Ocean has the potential to produce 1.3 million barrels of oil and natural gas per day while generating nearly 280,000 jobs and contribute up to $23.5 billion per year to the U.S. economy, according to a 2013 study by the American Petroleum Institute.
“The Trump administration could easily just agree with the plaintiff and rescind Obama’s ruling,” Guith concluded. “Despite all the vitriol of the people who have been pushing this, this isn’t really much of a legal question. Trump can unilaterally rescind this via executive order. Environmentalists would sue, but any first-year law student would tell them they’ll almost certainly lose.”
The primary federal rulings blocking offshore drilling are studies from the Bureau of Ocean Energy Management in consultation with the Department of Defense, which state that drilling could potentially interfere with naval operations.
“This is ultimately a symbolic attempt,” Guith noted. “There are steps they could have taken that would have been much more permanent. They didn’t use those mechanisms because they know that if they had, it’d taint other much more robust laws.”
Offshore oil drilling platforms and import facilities are too costly an investment when at its currently remarkably low prices. Major players like Exxon-Mobil have actually lost money in the U.S. offshore drilling business for six straight quarters, but if prices rise this could become the more attractive option.
Even Virginia Democratic Sen. Tim Kaine, Hillary Clinton’s choice to become vice president agrees. Kaine joined Republicans in sending a letter to the Department of the Interior in April 2015, pushing for expanded offshore drilling.
Opening federal lands for natural gas, oil, and other drilling would create 2.7 million jobs and add $663 billion to the economy each year for the next 30 years, according to a new study published last December by Louisiana State University and the free-market Institute for Energy Research (IER).
Opening up these lands and waters would also lead to $5.1 trillion in new wages and $3.9 trillion in new federal tax revenue over the next 37 years, which would massively stimulate the economy, according to the research. Over a 30 year period, this would create and support 2.7 million new jobs.
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