• 1 day Shell Oil Trading Head Steps Down After 29 Years
  • 1 day Higher Oil Prices Reduce North American Oil Bankruptcies
  • 2 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 2 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 2 days Venezuela Officially In Default
  • 2 days Iran Prepares To Export LNG To Boost Trade Relations
  • 2 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 2 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 2 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 2 days Rosneft Announces Completion Of World’s Longest Well
  • 3 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 3 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 3 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 3 days Santos Admits It Rejected $7.2B Takeover Bid
  • 3 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 3 days Africa’s Richest Woman Fired From Sonangol
  • 4 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 4 days Russian Hackers Target British Energy Industry
  • 4 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 4 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 4 days Lower Oil Prices Benefit European Refiners
  • 4 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 5 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 5 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 5 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 5 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 5 days OPEC To Recruit New Members To Fight Market Imbalance
  • 5 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 5 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 5 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 5 days GE Considers Selling Baker Hughes Assets
  • 6 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 6 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 6 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 6 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 6 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 8 days The Oil Rig Drilling 10 Miles Under The Sea
  • 8 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 9 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 9 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Alt Text

“End Of Oil” Narratives Are Misleading

While the world makes dramatic…

Alt Text

Iraq Struggles To Keep Oil Exports Elevated

Iraq is struggling to offset…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

The Arctic Drilling Ban: Much Ado About Nothing?

Barack Obama

Outgoing President Barack Obama is about to invoke a 1953 law in a bid to protect the Arctic and Atlantic shelf of the United States from the claws of the oil and gas industry, but below the surface it may just be theoretical.

The Outer Continental Shelf Land Act, and more specifically its provision 12(a), has only been invoked a few times since the passing of the legislation and has always, until now, concerned discrete areas.

This time will be the first when the provision is invoked to protect such large regions of the country’s shelf and it’s looking like the invocation will be more of a symbolic gesture to the environmentalist lobby than anything of practical significance going forward.

On the face of it, Obama’s move would interfere with President-elect Donald Trump’s energy policy priorities, where drilling for oil and gas in the Arctic and Atlantic shelf features prominently, according to a memo from Thomas Pyle, Trump’s transition team energy policy leader.

While the Trump administration has been expected to open up more federal lands for drilling, the Pyle memo singled out the Chukchi and Beaufort Seas, the Atlantic Ocean, the National Petroleum Reserve-Alaska (NPRA), and federal lands in the Western U.S.

Related: U.S. Natural Gas Needs Mexico

Invoking provision 12(a) from the OCSLA could theoretically ban oil and gas licensing in these areas for an indefinite future. The powers to do this lay exclusively with the President and the decision cannot be rescinded automatically by a future president.

So, if Trump wants to remove the ban, he would have to go to court. The court, for its part, according to the Alaska director of the Natural Resources Defense Council, Niel Lawrence, will hand matters over to Congress.

Congress, Republican-dominated as it is, will in turn revoke Obama’s invocation of the controversial provision, which quite simply states that the U.S. President can “from time to time, withdraw from disposition any of the unleased lands of the outer continental shelf.”

The court proceedings could take years, and this is what some observers see as problematic for the Trump administration. However, at the moment, the oil and gas industry is still weak and unable to commit the substantial amounts of investment needed for Arctic exploration. Big Oil already got burned in the Arctic, shelving projects and giving up licenses due to the high cost of the projects.

Related: Saudi Use Of Solar Could Boost Its Oil Exports

The Atlantic shelf is not as hostile but it will still take time for Big Oil and its smaller brothers to get back firmly on the cash flow positive path and be able to afford the investments. They need a few years for this and these few years nicely coincide with an earlier decision by Obama to suspend the sale of new exploration leases in the Arctic, the Atlantic, and the Pacific shelf from 2017 to 2022. Invoking provision 12(a) from the OCSLA, however, as Bloomberg points out, would explicitly put certain parts of the U.S. continental shelf “off limits” for the energy industry.

Chances are that the Trump administration would use all tools at its disposal to overcome this obstacle and will meanwhile seek ways around it, such as parts of the shelf that are under state jurisdiction. What’s more, given the right motivation, Congress could actually strike down the 12(a) provision altogether. Perhaps it’s time for the already very agitated environmentalist lobby to tread carefully lest it incurs greater damage by unduly antagonizing the new administration.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com: 




Back to homepage


Leave a comment
  • jack ma on December 24 2016 said:
    Obama is a simple puppet following orders by George Soros. Soros invested heavy in PetroBras of Brazil and then Soros ordered Obama to forbid drilling in the Artic and other USA waters. No competition is a good thing.

    Soros will get richer and all eyes and investments are in PetroBras now, including China. This is a money game and puppet Obama simply followed his marching orders by Soros so puppet Obama is not a real environmentalist hero and he cares nothing about the environment or the fish. Obama has no legacy at all so good ridden to this nasty ugly man. It is time for him and Mike to leave the Whitehouse.

    It's about money. Soros owns all the left neocons.

    Real news........IMHO

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News