Obama drops Arctic lease sales

USA

WASHINGTON, DC, November 21, 2016 – The administration of outgoing US President Barack Obama announced on Friday that it was rolling back development plans in the Arctic Ocean, triggering calls on incoming President Donald Trump to reverse the decision.

In its Offshore Oil and Gas Leasing Plan for 2017-2022 published on November 18, the Interior Department scrapped plans to lease two fields off the northern coasts of Alaska, though it said it would still lease 10 fields in the Gulf of Mexico and another one off Alaska, south of the Arctic.

“The plan focuses lease sales in the best places – those with the highest resource potential, lowest conflict and established infrastructure – and removes regions that are simply not right to lease,” Interior Secretary Sally Jewell said in a statement. “Given the unique and challenging Arctic environment and industry’s declining interest in the area, forgoing lease sales in the Arctic is the right path forward.”

In October 2015, the US Interior Department scrapped two other lease sales in the Arctic citing low industry interest, but Gazprom purchased the rights to develop two fields in the Russian Arctic at an auction earlier this year.

While environmental groups welcomed the move, critics said they would appeal to Obama’s successor Trump to repeal it, implying that it was threatening the future of US energy supply and even US strategic interests.

“It can take 10 or more years, from exploration to development, before a single drop of oil is produced from an offshore well,” Randall Luthi, the president of the National Ocean Industries Association, told Platts. “While countries such as Norway, Russia and even China are ramping up their presence in the Arctic, the US will have to play catch-up.”

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