Donald Trump’s administration offers massive increase in US offshore oil zones, making almost the whole coastal of the country available for oil and natural gas development. This includes areas in the Atlantic, Arctic and Pacific Oceans that have so far been protected. The decision will affect all US coastal states.
According to Interior Minister, Ryan Zinke, the program will make more than 90% of the world’s continental shelf available for sale to fossil fuels companies. The plan will be in force for five years, from 2019 to 2024, and represents a dramatic change in the policy of the president Barack Obama, when only 6% of the proposed areas were available for development.
The proposed changes are part of state administration measures to stimulate US fossil fuel extraction – a solution that comes despite global market saturation and ever-decreasing investment in the sector. According to the authorities, alleviating the restrictions, especially environmental, will help to boost the country’s energy sector.
Donald Trump’s administration believes that any effort to reduce regulatory costs can help make it more competitive for foreign manufacturers. In the spring, Trump issued a decree that encouraged increased energy yields in the country. Recently, the US Department of the Interior has also proposed to repeal some of the safe production provisions that were introduced following the 2010 Deepwater Horizon oil accident, which killed 11 people, and poured billion barrels of oil into the Gulf of Mexico.
The US government has not been authorized to extract oil in coastal areas of the Atlantic and Pacific for more than 33 years. It was expected that this change was positively accepted by the oil industry, but received strong opposition from environmental organizations and even representatives of the Republican Party.
In the words of Interior Minister Ryan Zinke, the plan is not final and the authorities are ready to discuss proposals from individual states. It is planned to be finalized in the autumn of 2019. Despite Washington’s willingness to move the procedure as quickly as possible, many analysts are skeptical that the timeframe set will be insufficient, as it is necessary to discuss in great detail the conduct of environmental assessments and debates that may slow it down.
Currently the main priority of the industry is the eastern parts of the Gulf of Mexico, the Atlantic coast from Virginia to Georgia and Alaska. The sector is still recovering from market saturation and the sharp decline in oil prices since 2014, making it less interesting for investors to drill in Alaska and coastal areas – the main territories affected by the new proposal of the administration.
James McGovern is from Arizona, USA. He is business analyst and writer at Finance Apprise Journal, responsible for finance and trading sections, as well as news from USA and Canada.