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Yahoo
05-05-2025
- Politics
- Yahoo
Trump administration plans for oil deep in Arctic Ocean, where US claim has yet to be recognized
An Arctic "fogbow' is seen from the deck of the Coast Guard cutter Healy during the 2016 Hidden Ocean mission to the High Arctic area known as the Chukchi Borderland. The Healy cruise was part of a project carried out over several years to map the extended continental shelf in the Arctic Ocean beyond the nation's 200-nautical-mile exclusive economic zone. That extended area includes the Chukchi Borderland. (Photo provided by Caitlin Bailey/Global Foundation for Ocean Exploration) The Trump administration is eying the possibility of oil leasing in Arctic Ocean areas more than 200 miles from shore, an area where U.S. territorial rights are unclear. Information about the Trump administration's plans to add a 'High Arctic' planning area to the federal offshore oil and gas leasing program, announced two weeks ago, was provided Tuesday in a formal solicitation for public comment. The U.S. Bureau of Ocean Energy Management, a division of the Department of the Interior, said it will accept public comments for 45 days on its proposal to reorganize the federal offshore leasing program, including the addition of the High Arctic area. The new area proposed for inclusion in the oil and gas leasing program is part of the ocean territory to which the U.S. government is claiming new rights following a sea-mapping program conducted over several years. The area is part of what is known as the extended continental shelf, which goes beyond exclusive economic zone borders that typically end at 200 nautical miles from shore. The U.S. State Department in December 2023 began the process of claiming over 200,000 square miles of Arctic seafloor in the extended continental shelf. That area is more than twice the size of California. Nations' territorial rights in extended continental shelf areas beyond the 200-nautical-mile limits are limited to the seafloor and subsea areas, under international maritime law. They do not include any rights in the waters above, such as fishing rights. Such territorial claims are normally evaluated for validity by a United Nations organization, the Commission on the Limits of the Continental Shelf. While State Department information expresses an intent to submit the U.S. territorial claims to the commission, the commission's website shows no pending U.S. applications. The U.S. has never ratified the treaty under which the commission operates, the United Nations Convention on the Law of the Sea. That puts U.S. claims to the Arctic Ocean territory in some doubt; Russia has already objected, arguing that the U.S. is not part of the ocean treaty and therefore not entitled to its benefits. It is difficult to know whether the U.S. government has a right to sell oil leases in the newly claimed High Arctic territory, an Anchorage environmental attorney said. 'In the international realm, it's not always clear all the time,' said Teresa Clemmer, litigation director for Trustees for Alaska, an environmental law firm. As to why the Department of the Interior would designate an oil and gas leasing area in the High Arctic in murky legal circumstances, Clemmer said, there may be parallels in Russian and Canadian government actions that started exercising regulatory authority in Arctic areas where their territorial rights were not certain. 'That's a way of getting a foot in the door and establishing that they have this authority,' she said. Neither the Department of the Interior nor the State Department provided additional information to clarify the status of the territorial rights in the High Arctic or plans for oil development there. Mark Myers, a geologist and former director of the U.S. Geological Survey, said there is some indication of oil and gas potential in the High Arctic region designated for possible inclusion in the BOEM program. He pointed to the Circum-Arctic Resource Appraisal released in 2008 by the USGS. The study used data collected by crews working on two icebreakers, the U.S. Coast Guard's Healy and the Canadian Coast Guard's Louis S. St-Laurent. But that information, too, is preliminary, Myers said. 'It's possible that some of the southern area would have oil and gas potential based on the CARA study, but a more robust, technical evaluation of the area for oil and gas potential would be something that would be important for the federal government to do,' said Myers, who also served previously as commissioner of the Alaska Department of Natural Resources and director of the Alaska Division of Oil and Gas. The CARA study also indicated the presence of critical minerals beneath the High Arctic seafloor, but any development of those would be outside of the oil leasing program, Myers said. If BOEM winds up establishing a designated leasing region, it would not guarantee that any lease sales will follow, Myers noted. 'It's a very, very preliminary step,' he said. To Clemmer, the idea of setting up a High Arctic leasing region is consistent with the Trump administration's pro-resource-extraction policies and 'wanting to open up every possible place to oil and gas development.' But offshore exploration there might be unappealing to oil companies for reasons beyond legal uncertainty. The High Arctic is very remote, harsh and distant from infrastructure support that oil companies might need, Clemmer noted. 'I don't see how the economics would be panning out for them,' she said. Even the Arctic offshore areas that are within the U.S. exclusive economic zone — the Chukchi Sea and the Beaufort Sea — hold uncertainty for oil companies. Litigation is underway over whether the Trump administration has the authority to reverse Biden administration and Obama administration decisions putting those areas off-limits to new leasing. A previous attempt in the first Trump administration was blocked in 2019 by the federal court in Anchorage. Operations in the federal offshore areas in the Arctic have proved to be more expensive and difficult than onshore Arctic operations. The most recent attempt was by Royal Dutch Shell, which abandoned its program in 2015 after spending what it said was over $7 billion but drilling only one well to depth. There has never been any commercial oil production in any federally managed outer continental shelf area off Alaska's coastline except for a small portion of the Hilcorp-operated Northstar field, which lies mostly on state territory in the Beaufort Sea but overlaps a bit into federal territory. Myers said industry interest in returning to federal Arctic offshore areas is yet to be determined. If it exists, it would likely be focused on sites where oil has been discovered but never produced, he said. He cited the Liberty field in the Beaufort Sea, where development has been eyed since the 1990s but where plans by BP Exploration (Alaska) Inc. and Hilcorp have stalled. He also listed the Kuvlum and Hammerhead prospects in the Beaufort Sea, which date back to the 1980s. Both are very far from shore, and neither has been deemed commercially viable. While the current administration may be favorable on offshore Arctic oil development, that could change in the future, presenting another risk for oil companies considering the idea, Myers said. 'People are always going to wonder about long-term changes in policy as administrations change,' he said. Elsewhere in the Arctic Ocean, the U.S. and Canada have a longstanding dispute over territorial rights in the Beaufort Sea off the Alaska-Yukon border. That has affected some past U.S. oil lease sales in the Beaufort, in 2003, 2005 and 2007, for example. A few tracts in the disputed zone were offered for leasing in those sales. Exploration in that disputed territory has not occurred, and the U.S. and Canada last year started new negotiations over the competing Beaufort Sea territorial claims. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
28-03-2025
- Business
- Yahoo
Federal court invalidates Gulf oil drilling lease
(Image credit: U.S. Bureau of Ocean Energy Management) In a legal setback for fossil fuel advocates, a federal court has invalidated a large offshore oil and gas lease sale in the Gulf of Mexico, ruling Thursday in favor of environmental groups that sued to block the lease after it was scheduled for auction in 2023. U.S. District Court Judge Amit Mehta, an Obama appointee in the District of Columbia, found unlawful a 73-million acre offshore oil and gas lease sale, one of the largest in history, that the Interior Department held in March 2023. Oil and gas leases are contracts in which private companies rent tracts of federal land or water from the government usually for the purposes of drilling or extracting raw materials. The court ruled in favor of groups that had sued the Interior Department, finding that the agency failed to adequately consider the potential harms of climate changing emissions from fossil fuel production arising out of the lease as well as the impact to the nearly-extinct Rice's whale, which lives exclusively in the Gulf of Mexico. The most recent scientific survey in 2017-18 estimated that only about 50 of the endangered whales are still alive, according to the National Oceanic and Atmospheric Administration. Gulf energy industry could face challenges with some of Trump's promises The judge ordered additional briefing from the parties regarding what remedies the court should impose. The Interior Department, through the Bureau of Ocean Energy Management under the Biden administration, had previously canceled the lease sale nearly three years ago. However, U.S. Sen. Joe Manchin, a centrist Democrat from West Virginia, inserted a provision into the Inflation Reduction Act that forced the Interior Department to resurrect the sales along with two others that were similarly canceled. Separate litigation remains ongoing to decide the fate of the two other sales, one in the Gulf of Mexico and the other in Alaska's Arctic National Wildlife Refuge (ANWR). The next Gulf oil and gas lease is scheduled for auction in 2025, and two others are proposed to take place over the next five years. After leases are sold, it typically takes many years before platforms and other infrastructure are built and drilling begins. For various reasons, some companies purchase leases and don't use them at all. Hundreds of oil and gas leases currently sit idle as fuel prices have been relatively stable for several years on the global energy market. The last oil and gas lease auction in ANWR this year drew no bids. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Reuters
12-03-2025
- Business
- Reuters
US judge declines to block Biden-era oil well decommissioning rule
March 11 (Reuters) - A federal judge in Louisiana has rejected a bid by three Republican-led states to block a rule adopted during Democratic President Joe Biden's administration that requires the offshore oil and gas industry to provide nearly $7 billion in financial assurances to cover the costs of dismantling old infrastructure. U.S. District Judge James Cain in Lake Charles on Monday declined, opens new tab to issue a preliminary injunction sought by Republican state attorneys general from Louisiana, Mississippi and Texas and four oil and gas industry groups blocking the policy. The 2024 rule was issued by the U.S. Bureau of Ocean Energy Management (BOEM) and required oil and gas lessees in the body of water known internationally as the Gulf of Mexico that was recently renamed the Gulf of America by Republican President Donald Trump to obtain financial assurance bonds. The Republican-led states and industry groups in a lawsuit filed in June say the rule if enforced would expose small- and mid-sized companies to "potentially existential consequences" as they would be unable to obtain such bonds. But Cain, who was appointed by Trump during his first term in office, said that potential harm was mitigated by the fact that the rule's requirements were being phased in over three years. He said companies were not expected to receive demands to post supplemental financial assurance until mid-2025 at the earliest and only needed to post a third of the required amount at that time. The rest would be due over three years, he said. "While these harms may be likely, a preliminary injunction can only be issued if the threatened harm is also imminent," Cain said. Lawyers for the plaintiffs did not respond to requests for comment. The plaintiffs argue that the Biden administration lacked authority to adopt the rule under the Outer Continental Shelf Lands Act, a 1953 law that gave the U.S. Department of Interior, which oversees BOEM, the authority to lease areas of the outer continental shelf for oil and gas development. While the judge on Monday declined to issue an injunction at this time, he said he would expedite the case so he could reach a final decision on the merits before companies receive letters demanding they post financial assurance. The case is State of Louisiana v. Haaland, U.S. District Court for the Western District of Louisiana, No. 2:24-cv-00820. For the plaintiffs: Tyler Green of Consovoy & McCarthy and Zachary Faircloth of the Louisiana Department of Justice
