Trump's offshore oil move already facing legal challenge

White House aims to capitalize on offshore acreage following latest $275 million auction.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  April 28, 2017 at 6:16 AM
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April 28 (UPI) -- With the ink barely dry on an order to review U.S. offshore drilling rights, environmental groups said preparations are already underway for a legal challenge.

U.S. Interior Secretary Ryan Zinke announced last Thursday that President Donald Trump has an executive order in place to review the five-year program for offshore oil and gas development. In one of his final moves in office, former President Barack Obama used parts of the Outer Continental Shelf Lands Act to ban oil and gas work in the Chukchi and Beaufort Seas off the coast of Alaska, as well as Atlantic coast areas.

Environmental groups said they were alarmed that the Trump administration aimed to put more acreage on the auction block, including possibly some of the first offers for offshore California in decades.

Tim Donaghy, a senior research specialist with Greenpeace, told UPI before Zinke's announcement that the OCSLA gives the president the authority to withdraw some areas from oil and gas leasing consideration, but not the authority to put those lease considerations back on the table. After the announcement, environmental groups Earthjustice and the Natural Resources Defense Council said they were drafting a lawsuit to challenge the Trump administration.

"Trump's short-sighted order reverses climate progress and imperils coastal communities, irreplaceable wildlife, and our shared future," Earthjustice President Trip Van Noppen said in a statement. "It is also against the law."

Obama's order was issued jointly with the Canadian government.

On the Senate floor earlier this week, Sen. Bill Nelson, D-Fla., said the possible inclusion of Florida waters currently under a moratorium, as well as parts of the Atlantic, would jeopardize coastal tourism dollars, as well as national security given the U.S. military training grounds in the area.

On the opposite coast, California Gov. Jerry Brown, Oregon Gov. Kate Brown and Washington Gov. Jay Inslee said the federal government was putting its interests above the state's by potentially expanding Pacific drilling rights for the first time in more than 30 years.

"Now is not the time to turn back the clock," they said in a statement issued late Thursday. "We cannot return to the days where the federal government put the interests of big oil above our communities and treasured coastline."

Venoco, which has its headquarters in Colorado, filed for Chapter 11 bankruptcy in early April and said it would dispose of its assets as a result. The company quit-claimed its lease for the offshore South Ellwood field back to the state and now starts the decommissioning of its offshore Holly platform and associated infrastructure onshore, built in the 1960s and closed after the Refugio oil spill in 2015.

The last auction for offshore acreage during the previous five-year lease plan brought in nearly $275 million in high bids. This week, Randall Luthi, the president of the National Ocean Industries Association, told UPI that about 90 percent of U.S. offshore areas are deemed off limits.

Eight new fields in the U.S. waters of the Gulf of Mexico started producing oil last year, leading to a high-water mark of 1.6 million barrels per day, beating the previous record set in 2009 by 44,000 bpd. By January, regional offshore production was up another half million barrels on a daily basis.

Arctic waters off the coast of Alaska could be included under the new order from the White House. Drilling in those harsh conditions could be cost-prohibitive under current market conditions. In 2014, when oil prices were twice as high as today, Shell said it was reluctant to commit capital to Arctic programs offshore Alaska.

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