Sunday, August 30, 2015

Why the Next Arctic-Drilling Fight Might Be Over Before It Begins

Chukchi sea (Credit: Shutterstock) Click to Enlarge.
On paper, the Obama administration is slated to sell new drilling leases in Arctic waters next year, giving big energy companies new opportunities to seek oil and natural gas that may lie beneath the icy seas.  And on paper, the auction would surely inflame the longstanding left-right fight between Arctic development and conservation, putting the Obama administration between energy companies and environmentalists one more time before the president leaves office.

But off paper, and in the real world, there's reason to believe this one isn't actually going to happen—at least not before President Obama vacates the White House.

Instead, several signals suggest the Obama administration will push back or cancel the 2016 sale, leaving the question of new Arctic leases to the next occupant of the White House.  And, if that happens to be Hillary Clinton, it would likely mean slim pickings for the energy industry, given the Democratic front-runner's freshly stated opposition to allowing drilling off Alaska's northern coast.

As written, the Interior Department's 2012-2017 offshore leasing plan calls for an auction next year of drilling blocs in the Chukchi Sea, which is estimated to hold 15 billion barrels of recoverable oil.  But here's a big reason to believe that won't happen:  Interior has not even begun work on a huge piece of the labor-intensive, detailed bureaucratic spadework that must occur first.  That is, the preparation of the formal "Environmental Impact Statement" for the 2016 sale.  Those complex reports that Interior must prepare ahead of lease sales have generally taken around two years to complete for past auctions.

The Chukchi is where oil giant Royal Dutch Shell, after recently winning the Obama administration's green-light for a limited effort, has begun drilling a well on tracts it bought when George W. Bush was still president.

Environmentalists strongly oppose Shell's project to develop leases obtained under Bush.  But in a separate and somewhat lower-profile fight, for years activists have been urging the administration not to sell oil companies any new leases in the region, either.

The Obama administration has a track record of reluctance to sell new drilling rights in the environmentally sensitive Arctic region.  In 2010, a set of major Interior Department revisions to the 2007-2012 leasing plan crafted under Bush scuttled sales in the adjoining Beaufort and Chukchi Seas.

Read more at Why the Next Arctic-Drilling Fight Might Be Over Before It Begins

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