In about-face, Obama says no drilling in Atlantic

Source: Emily Yehle, E&E reporter • Posted: Wednesday, March 16, 2016

The Obama administration reversed course yesterday and decided against opening Atlantic waters to oil and gas leasing, likely ensuring that drilling won’t occur off the East Coast for the foreseeable future.

Releasing an updated draft of its 2017-2022 leasing program, which sets out 13 potential oil and gas lease sales in the Gulf of Mexico and the Arctic, the Interior Department eliminated Atlantic lease sales, citing “current market dynamics, strong local opposition and conflicts with competing commercial and military ocean uses.”

“We heard from many corners that now is not the time to offer oil and gas leasing off the Atlantic Coast,” Interior Secretary Sally Jewell said. “When you factor in conflicts with national defense, economic activities such as fishing and tourism, and opposition from many local communities, it simply doesn’t make sense to move forward with any lease sales in the coming five years.”

The news surprised both environmental and industry groups, which scrambled this morning to release their respective declarations of victory and criticism. Many expected the administration would shrink the available leasing area in the Atlantic; few predicted a complete reversal.

The updated draft plan is open for 90 days of public comment. Interior plans to release a final version before President Obama leaves office.

Opposition to Atlantic drilling has grown in recent months, with more than 100 municipalities along the East Coast passing resolutions against oil and gas activity. Last December, seven House Republicans joined 26 Democrats in asking Interior’s Bureau of Ocean Energy Management to halt the permitting process for seismic surveys that enable oil and gas companies to find untapped mineral deposits.

The Department of Defense also voiced concerns about whether potential leasing areas — particularly those off Virginia — would affect military training.

In a call with reporters, Jewell cited the Pentagon’s concerns as a “material factor.” Comments from coastal residents were also “very, very significant,” she said, and even supportive governors asked for certain “provisions.”

“This is not a big reversal. Basically this is exactly how the process is supposed to work,” Jewell said.

Later, she added, “There was tremendous interest in the Atlantic, and generally it was expressing concern.”

Oceana, the environmental group that led the campaign for local opposition, declared victory in what it described as a “David vs. Goliath fight against the richest companies on the planet.”

“This is a victory for people over politics and shows the importance of old fashioned grassroots organizing,” Jacqueline Savitz, Oceana’s U.S. vice president, said in a statement. “It will prevent oil spills and coastal industrialization; it makes seismic testing unnecessary and it will help promote the clean energy solutions that we so desperately need.”

The oil and gas industry described the decision as a mistake that will have long-term consequences. Randall Luthi, president of the National Ocean Industries Association, called it a “mind-boggling” announcement.

“Disappointing is such a weak word when you think what this means for long-term energy development,” Luthi said. “We think it’s a very short-sighted and certainly political decision, and we think it’s the wrong decision.”

The updated draft plan keeps three potential lease sales in the Arctic: the Chukchi Sea, Beaufort Sea and Cook Inlet. But BOEM seeks public comment on various alternatives, including having no new leasing at all.

BOEM also has identified several “environmentally important areas” where it says there is potential conflict with ecological resources and subsistence activities. Officials said they seek public comment on activities in those area.

The road ahead

By taking the Atlantic out of the 2017-2022 leasing plan, the Obama administration is all but ensuring that no oil and gas activity will occur for years to come. Even if the Atlantic was put in the next five-year plan — from 2022 to 2027 — drilling would occur until the tail end of that period.

Technically, today’s decision does not stop seismic testing, in which air guns are used to find untapped mineral deposits. Scientists say the blasts can change the behavior of marine mammals, and environmental groups have led the charge against it.

The National Oceanic and Atmospheric Administration is still considering permits for companies wishing to conduct such surveys off the East Coast. But without potential drilling in the Atlantic, seismic companies are unlikely to have clients willing to pay for that information.

On today’s call, Jewell said the next administration could create a new five-year leasing plan, but it would be laborious.

“It couldn’t be done quickly in terms of redoing the five-year program, but it certainly could be redone,” she said. “It’s intentionally a robust public process.”

Congress could also force a lease sale, but that is unlikely.

Lawmakers began weighing in on the decision this morning, with Democrats generally praising it and Republicans calling it short-sighted.

New Jersey Democratic Sens. Bob Menendez and Cory Booker said it protects their state’s shores from the “threat of a massive spill.”

“I’ve been proud to stand with my colleagues and fellow stakeholders in opposing offshore drilling in the Atlantic ever since it was first included in this proposal,” Booker said. “We fought hard to protect the Jersey Shore from the potential devastating effects of a catastrophic oil spill, and New Jerseyans’ voices were heard loud and clear — this is our shoreline, and we stand united in protecting it from any and all threats.”

But Sen. Bill Cassidy (R-La.) asserted that it was a “win for foreign workers and a sucker punch to American workers.”

“The Obama administration should be using the Gulf as a blueprint to open the Atlantic to energy production and the hundreds of thousands of good jobs that come with it,” he said in a statement. “About 87 percent of U.S. offshore areas are already off limits to exploration and production — we’ve seen what happens to our economy when other countries take the lead on production.”

Reporter Margaret Kriz Hobson contributed.