Argus Media Ltd.

Argus Media Ltd.

US revisits plan to expand offshore drilling

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Source: Argus Media Ltd.

Washington -- President Donald Trump's administration is trying to determine how best to move forward with its plan to open nearly all federal waters to oil and gas exploration, after a federal judge blocked the administration from lifting a drilling ban in the arctic.

The US Interior Department is rethinking the planned rollout of its five-year offshore leasing plan, after US district court judge Sharon Gleason ruled that while the president may unilaterally remove federal waters from oil and gas leasing he must get approval from Congress to revoke a predecessor's withdrawal.

'Given the recent court decision, the department is simply evaluating all of its options to determine the best pathway to accomplish the mission entrusted to it by the president,' Interior said.

The offshore industry has been waiting with great anticipation for Interior to publish a new version of its offshore leasing plan. While the oil and gas sector has applauded the administration's push to open broad new swaths of offshore waters to drilling, nearly all east and west coast state governors oppose the notion.

As initially drafted, the plan would grant producers access to prime acreage in the eastern US Gulf of Mexico, the southern portions of the US Atlantic and oil-rich arctic acreage off Alaska.

But then Gleason threw out an order Trump signed two years ago that would have lifted a ban former president Barack Obama imposed on leasing off the northern coast of Alaska.

While industry leaders had anticipated some delays in the rollout of the leasing plan, they now are left with no clear idea as to how long the new review may take. National Ocean Industries Association president Randall Luthi said the review could take a long time – or not - but it 'clearly means we will not see a draft plan tomorrow, nor did we expect to.'

Environmentalists took a victory lap on news, arguing that opening so much offshore acreage to drilling would not have been worth the risk of oil spills and the additional greenhouse gas emissions that would come from producing additional oil and gas for decades.

'President Trump's wildly unpopular and risky offshore drilling plan needs to be more than sidelined. It should be deep-sixed permanently,' Natural Resources Defense Council legislative director Alexandra Adams said.

US coastal states have been erecting roadblocks to offshore drilling in case the leasing plan moves forward. But it remains unclear how Interior's rethink will affect five companies awaiting final permits to conduct seismic oil and gas surveys in the Atlantic. Luthi said he expects the seismic permits would be challenged in court as soon as they are issued, so an 'indefinitely hold on the [leasing] plan does not really make a difference at this time.'

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