President Joe Biden is moving to ban new offshore oil and gas drilling in most U.S. coastal waters, a last-minute effort to block possible action by the incoming Trump administration to expand offshore drilling.
Biden, whose term expires in two weeks, said he is using authority under the federal Outer Continental Shelf Lands Act to protect offshore areas along the East and West coasts, the eastern Gulf of Mexico and portions of Alaska’s Northern Bering Sea from future oil and natural gas leasing.
“My decision reflects what coastal communities, businesses and beachgoers have known for a long time: that drilling off these coasts could cause irreversible damage to places we hold dear and is unnecessary to meet our nation’s energy needs,” Biden said in a statement Monday.
“As the climate crisis continues to threaten communities across the country and we are transitioning to a clean energy economy, now is the time to protect these coasts for our children and grandchildren,” he said.
Biden’s orders would not affect large swaths of the Gulf of Mexico, where most U.S. offshore drilling occurs, but it would protect coastlines along California, Florida and other states from future drilling.
Biden’s actions, which protect more than 625 million acres of federal waters, could be difficult for President-elect Donald Trump to unwind, since they would likely require an act of Congress to repeal. The 72-year-old law that Biden cited allows the president to withdraw portions of the outer continental shelf from mineral leasing, including leasing to drill for oil and gas, if the areas are deemed too sensitive to drill.
Trump himself has a complicated history on offshore drilling. He signed a memorandum in 2020 directing the Interior secretary to prohibit drilling in the waters off both Florida coasts, and off the coasts of Georgia and South Carolina until 2032.
Fascinating stuff here, I had missed the Wall Street Journal piece in November, but it totally clicks with my observations.
Wall Street Journal, November 22, 2024:
Donald Trump wants oil companies to “drill, baby, drill” on the first day of his presidency, but his fossil-fuel benefactors have a different agenda.
Many of the tycoons who backed the Republican’s victorious campaign say what they need help with is shoring up demand for their products—not pumping more fossil fuels, which they have little incentive to do.
They are pushing for policies that would lock in fossil-fuel use, such as easier permitting for pipelines and terminals to shuttle fossil fuels to new markets. They also favor eliminating Biden administration policies meant to put more electric vehicles on the road.
Under President Biden, shale companies produced record amounts of oil and natural gas as crude prices rebounded from the pandemic’s depths and then soared after Russia’s invasion of Ukraine. But the industry is also confronting the early stages of a long-term shift away from fossil fuels, as well as concerns that gasoline consumption has peaked in the U.S.
Trump handed shale donors their first big return on investment by nominating Liberty Energy Chief Executive Chris Wright, a fracking booster and fossil-fuels champion, to lead the president-elect’s Energy Department.
When Dan Eberhart, the CEO of oil-field services firm Canary, met with Trump during a fundraiser at his Mar-a-Lago club in Florida this summer, Eberhart had a unique request. He asked Trump to push back on the International Energy Agency, the influential, Paris-based energy forecaster. The agency has predicted global oil demand will peak by the end of the decade, earning scorn from GOP lawmakers who dubbed the group an “energy transition cheerleader.”
“You need to stop acting like fossil fuels are the devil,” Eberhart said in an interview, referring to the IEA’s stance.
A spokesperson for the IEA said it remains “focused on its key missions of energy security and energy transitions, based on the mandates from our member governments.”
Many of Trump’s oil and natural-gas supporters favor easing regulations that govern drilling. The changes would include scrapping rules targeting methane emissions, getting new permits to frack on federal land and eliminating climate disclosure rules.
But some donors grimace when they hear Trump promise that under his watch, crude-oil producers would open the floodgates. He has also promised to cut Americans’ energy costs by 50% or more.
Oil backers’ skepticism stems from the fact that Wall Street has successfully pressured chronically indebted frackers to stop burning through cash, and return it to shareholders via buybacks and dividends instead of reinvesting it to frack more wells.
“Our stocks will be absolutely crushed if we start growing our production the way Trump is talking about it,” said Bryan Sheffield, a Texas oilman who contributed more than $1 million to Trump’s latest campaign.
Another limiting factor for shale companies is geology. Drillers are running out of premium wells, and many don’t have the runway to pump more oil than they are already.