U.S. Offshore Oil and Gas Plan on Pause, Potentially for Years
In January 2018,
the Interior Department unveiled a draft proposed leasing plan to open nearly
all federal waters to oil and gas drilling, but a federal judge's ruling and
opposition from coastal lawmakers may have doomed the plan before it reached
the formal, proposed phase.
"I've
paused it until I figure out the pathway," Interior Secretary David
Bernhardt said Wednesday during a Senate Appropriations subcommittee hearing.
As originally
unveiled in its draft form, from 2019 through 2024, Interior planned to hold 19
sales in federal waters offshore Alaska, 12 in the Gulf of Mexico, nine in the
Atlantic and seven in Pacific waters offshore the West Coast.
Shortly after
the draft proposal was unveiled, then-Interior Secretary Ryan Zinke announced
that Florida waters would be left out of the plan, although he never offered
any specifics on this and Interior officials repeatedly claimed that Florida
waters technically remained in the proposal.
The proposal
would have replaced the Obama administration's final program lease sale, which
includes only 10 sales in the Gulf of Mexico and one in Cook Inlet.
In March, Judge
Sharon Gleason of the US District Court for the District of Alaska ruled that a
permanent ban on drilling in about 115 million acres of the US Arctic Ocean and
3.8 million acres in the north and mid-Atlantic Ocean off the East Coast "will
remain in full force and effect unless and until revoked by Congress."
The ban had been
put in place by President Barack Obama in his final days in office, but
President Donald Trump had attempted to reverse the order as part of his plan
to open more federal waters to drilling. Obama had withdrawn the entire US
Chukchi Sea and most of the Beaufort Sea from future oil and gas drilling.
The ruling
complicated the administration's path forward on its draft proposal and
Bernhardt said the plan remains on pause as an appeal is considered.
Randall Luthi,
president of the National Ocean Industries Association, said Interior is
unlikely to publicly release much on the plan until after the 2020 federal
elections are over.
With so much
opposition in coastal states to expanding drilling beyond the Gulf of Mexico,
President Trump is unlikely to push forward a plan which could hurt his
re-election chances, Luthi said.
"They are
looking at anything that might tip the scales one way or the other," he
said.
North Carolina,
South Carolina, Georgia, Florida and Alaska all voted for Trump in his 2016
presidential election.
Bernhardt, who
became Interior's acting secretary in January after Zinke left and was
confirmed as secretary in April, is unlikely to try and replace the current
2017-2022 plan and, instead, will develop a 2022-2027 offshore plan after the
election, sources said. It remains unclear if Bernhardt plans to use portions
of the plan pitched under Zinke last year.
"They're re-looking at the whole program with a fresh set of eyes now that there's a new secretary in place," said Erik Milito, the American Petroleum Institute's vice president of upstream and industry operations.