Trump Administration opens Drilling in Offshore Waters
The U.S. announced their intention to open most of the country’s offshore waters to oil and gas drilling, to expand domestic production.
The U.S. Department of interior is ready to replace the Obama administration’s five-year oil and gas leasing plan. Last Thursday the Trump administration announced a draft proposal to offer offshore blocks to oil and gas drillers in nearly all United States coastal waters. Thanks to this proposal energy companies would have access to leases off California for the first time in decades and could open more than a billion acres in the Arctic and along the Eastern.
This new plan comes nine months after Trump issued an executive order prioritizing “energy exploration and production in order to maintain the nation’s position as a global energy leader and foster energy security and resilience for the benefit of the American people.”
According to Trump administrators this plan would allow drilling in areas far beyond the U.S. epicenter of offshore drilling in the central and western Gulf of Mexico, giving oil and gas companies the opportunity to explore areas left out of leases for decades.
Oil industry leaders see the Trump’s plan as long overdue.
“I think the default should be that all of our offshore areas should be available,” said Thomas J. Pyle, president of the American Energy Alliance. “These are our lands. They’re taxpayer-owned and they should be made available.”
Not of the same opinion environmental groups and coastal governors including Trump allies like Florida Gov. Rick Scott who see this plan very far from present, beacuse of the environmental risks and uncenrtain oil price.
“I have already asked to immediately meet with Secretary Zinke to discuss the concerns I have with this plan and the crucial need to remove Florida from consideration” Scott said in a statement.
While drilling in Alaska’s Arctic National Wildlife Refuge makes sense because Alaska has existing pipeline infrastructure in place, drilling off the East Coast does not, said John McNabb, former chairman and CEO of Willbros, one of the largest energy infrastructure contractors in the world.
“You have to put in a huge amount of infrastructure and the return of investment on such infrastructure is not there. The price of oil is too low” said McNabb, who co-founded the disbanded Trump Leadership Council and now is vice chairman of the American Leadership Council.
“Also, the more we produce oil, prices will go down. This announcement is more about geopolitics than economics” he told CNBC. “We are telling the world we are energy independent. And we are.”
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