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Good Trump: Trump Opens Offshore Oil Exploration

On Friday, President Trump signed an executive order (EO), known as the "America-First Offshore Energy Strategy," that would potentially lift the restrictions on offshore drilling that were put in place by former President Obama following the Deepwater Horizon disaster.

According to NPR:

The order directs Interior Secretary Ryan Zinke to review a five-year plan in which President Obama banned drilling in parts of the Pacific, Arctic, and Atlantic Oceans. Zinke told reporters Thursday night that will be a long process, and a complex one, acknowledging that not all areas have oil or gas, and not all coastal communities want offshore drilling.

Reuters adds:

In addition to requiring a new five-year drilling plan, the order reverses Obama's decision to place certain parts of the Arctic permanently off limits to drilling.

Prior to signing the EO, Trump made a brief announcement:

"... today, we're unleashing American energy and clearing the way for thousands and thousands of high-paying American energy jobs. Our country is blessed with incredible natural resources, including abundant offshore oil and natural gas reserves. But the federal government has kept 94% of these offshore areas closed for exploration and production. And when they say closed, they mean closed. This deprives our country of potentially thousands and thousands of jobs and billions of dollars in wealth. I pledged to take action, and today, I am keeping that promise."

Multiple outlets have noted that the incredibly low price of oil, as well as the current growth of onshore drilling, means that Trump's EO would do little to develop jobs and revenue.

However, an unnamed official from the American Petroleum Institute (API) told Reuters: "In order to meet U.S. energy needs, it is important to keep options open for the long term, so industry can start planning for and determining where the best prospects are and then make those investments the global economy will require over time."

According to The New York Times:

[President Trump's EO would take] ... aim at regulations on oil-rig safety. In the final years of the Obama administration, the Interior Department implemented several new rules aimed at improving the safety of specific pieces of offshore drilling equipment that had failed during the 2010 oil spill in the Gulf of Mexico, and were found to have been responsible for the deadly BP oil rig explosion that caused that spill...

The 2010 explosion of the Deepwater Horizon rig was caused in part by the buckling of a section of drill pipe, prompting the malfunction of a supposedly fail-safe blowout preventer on a BP well.

However, according to the text of the EO, such regulations might not be altered (emphasis added):

... The Secretary of the Interior shall review the Final Rule of the Bureau of Safety and Environmental Enforcement (BSEE) entitled "Oil and Gas and Sulfur Operations in the Outer Continental Shelf-Blowout Preventer Systems and Well Control," 81 Fed. Reg. 25888 (April 29, 2016), for consistency with the policy set forth in section 2 of this order, and shall publish for notice and comment a proposed rule revising that rule, if appropriate and as consistent with law. The Secretary of the Interior shall also take all appropriate action to lawfully revise any related rules and guidance for consistency with the policy set forth in section 2 of this order. Additionally, the Secretary of the Interior shall review BSEE's regulatory regime for offshore operators to determine the extent to which additional regulation is necessary.

At this time, it's unclear to what extent Trump's EO would roll back regulations related to safety that were implemented under the Obama administration. Until a final review is completed, such a thing cannot be determined.

This is good news for the oil and gas industries, who have been hampered in recent years under onerous regulations. Whether the EO will result in more robust offshore drilling remains to be seen.

 
 
 

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