Cancellation Of Energy Contracts on Public Lands Angers Republicans
The move slashes high-paying union jobs and boosts the nation's dependence on foreign oil, GOP lawmakers and industry leaders said. The oil and gas industry produced 90 percent of Alaska's general revenues in 2015.
“The arrogance of the decision is unfathomable, but unfortunately not surprising,” National Ocean Industries Association President Randall Luthi said. “Once again, we see the attitude that Washington knows best – an attitude that contributed to (the presidential) election results.”
The incoming Trump Administration will be asked to reverse the decision, U.S. House Speaker Paul Ryan, a Republican, said in a prepared statement.
The Obama administration’s decision also pulls the United States out of what may be a new gold rush to tap Arctic areas for their minerals and resources, he said. “While countries such as Norway, Russia and even China are ramping up their presence in the Arctic, the U.S. will have to play catch-up,” Luthi said. “Finalizing the 2017-2022 Outer Continental Shelf leasing program without including the Beaufort and Chukchi seas means the race has started, and the U.S. is not even on the track.”
The Obama Administration's five-year plan for oil and gas development in the outer continental shelf bars drilling in Beaufort and Chukchi seas above the Arctic Circle in Alaska, Interior Secretary Sally Jewell announced Friday. Jewell cited risks to marine areas and communities, as well as declining industrial interest in these regions.
Simultaneously the federal Bureau of Land Management is cancelling 25 oil and gas leases in the Thompson Divide area of western Colorado, Jewell said. “This resolution strikes the right balance by protecting one of Colorado’s most spectacular places and important watersheds, and ensuring that any future development is done responsibly and held to high standards,” the interior secretary said in a prepared statement.
The federal land-use restrictions are surrendering to environmental groups, Republican lawmakers said. Some Western Republicans vowed to overturn the Obama decrees after Donald Trump is sworn in on January 20, 2017.
“This plan to exclude the resource-rich Arctic from exploration possibilities squanders our ability to harness the abundant, affordable energy sources that power our economy …” Speaker Paul Ryan said in a prepared statement. “We will work to overturn this plan, and to open up the Arctic and other offshore areas for development.”
Lower commodity prices and more stringent federal regulations have kept many companies from making significant investments in oil exploration in the Arctic and elsewhere, Nicolette Nye, a spokeswoman for the National Ocean Industries Association, told the American Media Institute. "The proposed Arctic sales were still several years in the future, so the interest of the operators could be very different in even two years than it is at present," Nye said. "The apparent lack of industry interest is merely an excuse, not a rationale for excluding a sale."
The safety record of the oil and gas industry is among the best of any industry, she said, but cited no specific numbers.
More than 70 percent of Alaskans support drilling for oil and gas in the outer continental shelf and many Alaska residents depend on the industry for their livelihoods, said the Alaska congressional delegation in a joint news release. Development in the Beaufort and Chukchi seas could produce as much as 23.6 billion barrels of oil, enough to meet California’s oil needs for more than 37 years, according to a U.S. Interior Department analysis.
“I am hopeful that with the incoming Trump administration, we will be able to reach our potential as a state and nation in this important area,” said Alaska Sen. Dan Sullivan, a Republican.
Drilling off northern Alaskan shores could produce an average of 50,000 jobs per year, according to the lawmakers.
“We have shown that Arctic development is one of the best ways to create jobs, generate revenues and refill the Trans-Alaska Pipeline,” said Alaska Sen. Lisa Murkowski, a Republican. “Why the president is willing to send all those benefits overseas is beyond explanation.”
Jewell and other administration officials, however, portray the administration’s drilling restrictions as a balance between the need for adequate energy development in the years ahead and the need to protect critical ecological resources and fight climate change. Under the plan, 10 sales would occur in outer continental shelf in the Gulf of Mexico and one sale along the Alaska coast near Cook Inlet, south of Anchorage.
No lease sales along the Pacific or Atlantic coasts were authorized under the plan.
The Arctic ecosystem, the high costs that come with offshore oil development, low foreseeable petroleum prices and the waning interest in the region expressed by oil companies led to the decision to exclude the Chukchi and Beaufort seas, according to the Interior Department.
“The plan focuses lease sales in the best places – those with the highest resource potential, lowest conflict and established infrastructure – and removes regions that are simply not right to lease,” Jewell said.
The Sierra Club and other environmental groups applauded the Interior Department decision.
"For years, the Arctic Ocean has been left vulnerable to oil drilling that would devastate its pristine waters, Alaska Native villages and coastal communities, and the marine life these communities depend on," said Sierra Club Executive Director Michael Brune in a statement. "But thanks to the Obama administration’s leadership, the Arctic Ocean, like the Atlantic Ocean earlier this year, will remain protected from fossil fuel development."
The decision to terminate oil and gas leases in the White River National Forest region of Colorado has also prompted concerns about energy needs and jobs in Colorado.
The cancellation creates the illusion that building up the nation’s energy infrastructure has to come at the expense of preservation, said Colorado Rep. Scott Tipton, a Republican who represents western Colorado.
“I firmly believe that we can harness our land’s energy potential without compromising Colorado’s natural beauty,” said Tipton. “The cancellation … is another action in a pattern that we have seen to permanently withdraw federal land from future natural resource development.”