Obama’s “permanent” bans on offshore oil and gas drilling in Alaska are actually “indefinite” and could end as soon as January 20.
The incoming Trump administration has the authority to revoke environmental protections of Alaska’s Chukchi and Beaufort Seas, which were enacted by President Obama in December and widely described in the media as “permanent bans” on oil and gas drilling in the Arctic. Environmental activists praised the Obama administration for its actions, proclaiming that these bans are irreversible and will protect the Arctic from worsening climate change.
In reality, the protections are indefinite (not permanent) and they are most definitely reversible. With a pro-fossil fuels administration coming together, oil and gas leases will likely be reauthorized at some point in the Chukchi and Beaufort Seas during the next administration. With pro-oil officials like Rick Perry and Ryan Zinke set to lead the Energy and Interior Departments, the petroleum industry can expect to return to the Arctic eventually.
The above map depicts the swaths of US controlled waters where oil and gas drilling was indefinitely (not permanently) banned by the outgoing Obama administration. Protected waters are shaded green and total 125 million acres. Map courtesy of the US Bureau of Ocean Energy Management.
President Obama used a provision in the Outer Continental Shelf Lands Act, or OCSLA, to remove 125 million acres of the Beaufort and Chukchi seas from federal oil and gas leasing programs. Provision 12(a) of OCSLA grants the President the authority to remove certain lands from federal leasing at his or her discretion: “The President of the United States may, from time to time, withdraw from disposition any of the unleased lands of the outer Continental Shelf.” That’s as simple a statement as one is liable to find in US federal law, and it grants the President extraordinary flexibility in his or her ability to administer federal property leases. To revoke US territorial waters from leasing programs, a presidential memorandum is written and signed by the President, and it immediately has force of law.
Previous administrations have always given their Provision 12(a) bans an expiration date. President Obama is the first president not to assign an expiration date for the bans on leasing in the Beaufort and Chukchi Seas, leading many to understandably (but incorrectly) consider the bans to be permanent. The White House encouraged this inaccurate narrative, claiming that the law does not allow presidents to reverse leasing prohibitions. In reality, a president can assign new expiration dates to existing bans, effectively reversing or amending them. President George W. Bush set precedent for this in 2008, when he shortened a ban set by his father on leasing federal waters in the Gulf of Mexico. So there is no reason to expect that the Trump administration would be unable to set a new date on Obama’s bans.
Given the extraordinary flexibility of Provision 12(a), the new administration could simply issue another memorandum at virtually any time, and reclaim the ability to lease the Beaufort and Chukchi Seas at their discretion. Doing so would have the added benefit of pleasing the red state of Alaska, whose residents have recently indicated overwhelming popular support for offshore oil and gas development. However, environmental groups are likely to challenge any amendment to Obama’s memorandum in court. While the outcome would be uncertain due to the vague nature of Provision 12(a), the Trump administration will get to fill at least one seat on the Supreme Court. So if it gets that far, the pro-petroleum camp is still likely to prevail.
Although the price of oil is stagnant in the $50-$60 range, making most Arctic drilling unfeasible, oil companies are still likely to push for reauthorization of Beaufort and Chukchi leases in the near term. Developing offshore oil fields requires several years of installing infrastructure and equipment, and there’s no point in making those investments in an area where drilling is indefinitely banned.
Federal offshore leases are conducted in five-year increments, the next being 2017 to 2022. While the Obama administration has already laid out the available leases, it would be possible for the Trump administration to scrap that plan and have the Interior Department create a new one. It may well be time consuming, but the Republican-dominated government has a bone to pick with the bureaucracy and would likely attempt to push these changes through as fast as possible. Alternatively, the administration could set an expiration date closer to 2022, giving the industry a roadmap to drilling and the time to plan accordingly.