Obama Admin Reneges on Offshore Drilling
The Obama administration’s decision to withdraw a proposal to allow oil and natural gas drilling off the Atlantic coast is more about the president’s future than the country’s. The decision comes as President Obama tries to “build an ambitious environmental legacy,” as the New York Times describes it.
We’ve seen this story before.
Obama is determined to be remembered as the president who passed comprehensive health care reform, no matter how many Americans lose their doctor and have to pay much higher premiums.
He is determined to be remembered as the president who signed a deal with Iran, no matter how many times that country violates the agreement. And he is the president who wants to be remembered as a green warrior, no matter how that action affects U.S. security.
In January 2015, the Obama administration proposed expanding offshore oil and natural gas drilling leases in Alaska, the Gulf of Mexico and in the mid- and south Atlantic. Environmentalists were outraged.
But now, the Bureau of Ocean Energy Management has changed its mind: “The Mid- and South Atlantic Program Area lease sale proposed for 2021 in the DPP has been removed from the Proposed Program for a number of reasons, including strong local opposition, conflicts with other ocean uses, and current market dynamics.”
The BOEM did receive complaints from some coastal communities concerned that an oil spill might affect their coasts. But many prominent elected officials from the affected states supported the plan because the drilling would provide jobs and royalties for their states.
Moreover, large spills are extremely rare, and the industry has since adopted numerous additional safeguards. Plus the proposed Atlantic drilling area has a minimum 50-mile buffer zone from the coast.
The BOEM also mentions commercial and military “conflicts.” But commercial and military interests are also present in the Gulf of Mexico, and energy companies have been drilling there for decades. Yet BOEM is willing to expand leases there.
Finally, the agency’s comment about “market dynamics” refers to the current global oil glut that has depressed oil and natural gas prices and resulted in many U.S. energy companies scaling back spending.
Given that offshore drilling usually costs more and involves significantly longer lead times than onshore plays, companies won’t rush to add to the glut – at least immediately.
But the BOEM’s timeframe for a lease sale was not until 2021. Energy prices are cyclical, and in a few years oil may approach $100 a barrel again. Plus the United States has begun exporting both oil and natural gas to other countries. If those exports expand quickly – especially since many countries dependent on Russian natural gas would prefer ours – companies could soon be scrambling to produce more. Those exports would lower the trade deficit and boost U.S. energy security.
In short, the Obama administration’s reasons for reneging on is initial proposal are weak, just as the president’s decision to reject the Keystone XL pipeline. In that case, the State Department, which had to assess any potential environmental impact, green-lighted the Canada-to-Nebraska pipeline – more than once. Yet Obama rejected it, too, a decision that cost thousands of jobs.
The administration’s reversal from its original lease proposal was another disappointment from a president with a long string of policy disappointments. Like his health care and Iranian nuclear legacies, the president wants a green legacy, and he’s willing to make the country pay any price to get it.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas.