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News analysis: U.S. offshore drilling meets with mix of responses
BY 2018-01-16 10:13:08

By Bruce Westbrook

HOUSTON, Jan. 15 (Xinhua) -- President Donald Trump's move for the largest expansion of offshore oil and gas drilling in U.S. continental waters in decades is met with resistance by coastal states officials and a mix of skepticism and hope by energy industry analysts.

The proposal, announced earlier this month, would open nearly all U.S. coastal waters from the Atlantic to the Arctic oceans to energy development. For several decades, such waters have had federal protections due to environmental concerns.

The Trump administration asserted that such renewed offshore drilling will help achieve "energy independence."

But some said that's unlikely even if renewed offshore drilling transpires, given the facts that oil is less than 70 U.S. dollars per barrel and shale oil reserves are abundant.

KEY TO ENERGY INDEPENDENCE?

Trump's offshore drilling plan would open up 90 percent of U.S. offshore reserves to development by private companies, with 47 drilling leases proposed. Among them, 19 sales would be off the Alaska coast, 12 in the Gulf of Mexico, nine in the Atlantic and seven in the Pacific, all but one of them off California's coast.

Sean Hennigan, managing director of Houston-based Hercules Offshore West Africa, which provides drilling services to oil and gas producers, saw the proposal as a positive step for energy independence, "which is a long-term game."

Since the lead time for offshore drilling "is significant, there will be no immediate impact" from Trump's proposal, he said. "But we're going to need oil for multi-generations to come, and it's better to get that domestically than internationally from an energy independence standpoint."

He added that "people have more incentive to produce oil and gas from shale formations than offshore drilling. Shale oil and gas is abundant and generally less expensive to produce, and it's quicker to get your payback, while an offshore well may take a decade or longer to produce."

That's why he considered the Trump proposal's impact on America's energy independence to be "more of a medium-term" thing. Trump's opening up coastal waterways might take 10 to 20 years to make an impact on the oil and gas industry.

But at the same time, Hennigan said though the industry can meet demands now via shale production, "if there was a drop in production in the Middle East or South America, there would be sorrow in the future if you don't do it now (launch domestic offshore drilling). You won't know you need it till you need it, and you wouldn't be able to respond quickly enough then."

That's why he saw "increasing our access to domestic resources" via renewed offshore drilling as a "safety net if something goes wrong internationally."

DOMASTICALLY POLITICAL ISSUE?

Dubbed the Draft Five Year Outer Continental Shelf Oil and Gas Leasing Program, the offshore drilling plan is not final.

Jon Taylor, professor of political science and director for Master of Public Policy and Administration Program at the University of St. Thomas in Houston, America's energy capital, saw the proposal as more a matter of domestic politics than energy independence.

He said there is "no guarantee that any actual offshore drilling will take place" during the proposal's five-year period of 2019-2024. "I think this will have less of an impact than Trump thinks."

With shale reserves available and oil prices low, "oil companies are going to be reticent to sink massive investments into offshore drilling," he said. And even if there is strong interest, "the impact of expanding domestic offshore drilling and oil production would likely be several years from now rather than immediate."

Trump's government also claimed that allowing offshore drilling would provide billions of dollars to fund conservation of coastlines, public lands and parks -- the same areas which environmentalists say would be most vulnerable to an oil spill accident when offshore drilling goes badly.

While energy industry groups have embraced the proposal, Democratic governors of Virginia, North Carolina, Delaware, New York, California, Oregon and Washington oppose offshore drilling in waters along their coasts, as do Republican governors of Maryland, New Jersey and Florida.

Several of those states benefit from multi-billion-dollar beach tourism industries along what are now environmentally protected waters.

In addition, a coalition of over 60 environmental groups is against the proposal, which it claims would cause severe harm to public health, the environment and marine life.

In a statement signed by leaders of the Natural Resources Defense Council, the Sierra Club, the League of Conservation Voters and other environmental groups, the coalition railed against U.S. coastal waters being "sold off to multinational oil companies."

The coalition called Trump's offshore drilling proposal a "shameful giveaway" to the gas and oil industries.

Trump's offshore drilling plan isn't his only recent move toward a more aggressive energy posture. The administration also recently vowed to rewrite or eliminate many restrictions on offshore oil and gas drilling which had been instituted after a far worse oil spill: the notorious Deepwater Horizon offshore oil rig explosion, fire and spill which occurred in 2010.

That disaster off the coast of Louisiana, or 400 km southeast of Houston, killed 11 oil rig workers and spilled 215 million gallons of crude oil into the Gulf of Mexico, fouling beaches all the way to Florida. It was the worst oil spill in U.S. history.

Potential environmental disasters are a chief concern of several Republican and Democratic governors of coastal states along U.S. continental-shelf waters. They note that the Deepwater Horizon accident continues to have harmful effects on Gulf of Mexico coastal areas, which are still in a recovery mode more than seven years after the accident.

A far narrower plan for U.S. offshore drilling had been considered previously by the administration of former President Barack Obama. But it was abandoned in 2016 due to concerns of Virginia and Georgia, where drilling had been considered, as well as concerns of the U.S. Navy, which holds military exercises in those areas.

(Editor:Li Zhaoqi) (From:xinhua)
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