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Oil companies spurn Trump’s enthusiasm for Arctic oil, gas

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Despite the noises coming from the Trump administration and Alaska’s elected officials, it appears that any new initiatives to expand offshore oil and gas development in the Arctic will be falling on deaf ears among fossil fuel companies.

“We think there is almost no rationale for Arctic exploration,” Goldman Sachs commodity expert Michele Della Vigna said in late March. “Immensely complex, expensive projects like the Arctic we think can move too high on the cost curve to be economically doable.” Indeed, unless oil again approaches $100 a barrel, these areas are likely to be ignored; just last year, oil companies gave up on hundreds of leases in the Beaufort and Chukchi Seas that they had spent $2.5 billion to acquire back when prices were high enough to justify their plans there.

Despite President Trump’s oft-repeated pledge to open up America’s “vast untapped domestic energy reserves,” the fact is that even without the offshore Arctic or the Atlantic coast (both excluded from new leasing from 2017-2022 by the Obama administration), the areas already open to offshore development “make available more than 70% of the economically recoverable resources, which is ample opportunity for oil and gas development to meet the nation’s energy needs.”

For more details, and maps of the Arctic and Atlantic leasing areas, see this AEInews report from January 2017.
UPDATE, 4/28: Just after writing this, notice of the latest Trump Executive Order crossed my desk, this one explicitly targeting the offshore areas removed from the 2017-2022 lease sales by Obama’s team. Meanwhile, Alaska Senator Lisa Murkowski introduced a bill to re-open Arctic waters; and for added freakiness factor, a NC Congresswoman has introduced a bill to force a lease sale within a year, and exempting this effort from NEPA (ie EIS) provisions for five years!  If any of these proceed into action on leasing, no doubt a court challenge will ensue, centered on the presumed non-reversibility of Obama’s last-month actions.
UPDATE, 5/2: This is encouraging news: the Supreme Court has declined to hear an appeal of a lower court ruling that upheld the US Fish and Wildlife Service’s designation of a vast area of the Alaskan ice shelf as critical habitat for polar bears.  The oil and gas industry argued that its short-term activities should not be limited by concerns over longer-term global warming; ie that their ships, drilling, etc. are not in and of themselves responsible for any global warming.  The lower court ruling is not necessarily based on on the idea that oil and gas development should be stopped in the name of climate caution; rather, it simply upholds the FWS contention that the ice shelf is threatened by warming, and that this habit should be spared further intrusions in order to maximize the chances that the polar bears can survive. It’s reassuring that the current Supreme Court was not interested in pushing back against such climate-driven policies.

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