In a reversal, White House to shelve Atlantic oil drilling plan

The Interior Department is set to announce a reversal of a 2015 plan to auction of oil drilling rights for parts of the Atlantic coast. 

REUTERS/Andrew Cullen/Files
Sunflowers stalks punctuate the snow in a field near dormant oil drilling rigs which have been stacked in Dickinson, North Dakota (Jan 21, 2016). Shale gas pumping off the Atlantic coast could hit more snags.

An expected about-face by the White House has prompted cheers from both environmentalists and the Pentagon and criticism from the oil industry.

The Obama administration will reverse an earlier proposal to open up waters off the US Atlantic coast for oil drilling. The proposed plan would have auctioned drilling rights for a large area of the southern Atlantic coast. Now, an Interior Department official, who requested anonymity, has said a reversal would likely be announced Tuesday.

The proposed plan received backlash from environmentalists, citizens, and even military organizations, but its reversal will hardly be met with unanimous support. Groans from state governments and the oil and gas industries will accompany any sounds of celebration.

Offshore drilling in the Atlantic is "an exploration activity that hopefully leads to the discoveries that give us our energy security and put us on a road to energy independence," said Erik Milito, an American Petroleum Institute director, told Bloomberg. "Canada, Cuba, Venezuela, South America, Europe, West Africa – they all do it, and we’re sitting back kind of witnessing it without exploring ourselves."

The oil and gas industries strongly supported the proposal. There are potentially billions of barrels of untapped oil and gas off the Atlantic. The Interior Department puts the amount at 3.3 billion barrels of oil and 31.3 trillion cubic feet of natural gas, but some experts say it could be much higher, according to The Wall Street Journal.

So why the change of heart?

For one, the military is not a fan. The Pentagon confirmed Sunday that it had identified several areas of proposed drilling that could interfere with military activity in the area, lessening the readiness of troops and ships.

Training includes live events that "are fundamental to the ability of our airmen, sailors, and marines to attain and sustain the highest levels of military readiness. Additionally, [the Defense Department] conducts major systems testing activities in the mid-Atlantic region that are also important to military readiness,” spokesman Matthew Allen explained to The Washington Post.

The proposal also faced a range of other opponents, from cities to environmentalist groups and businesses. Owners of nearly 1,000 coastal businesses in the affected states have signed letters to oppose the drilling plan.

In the face of a range of opposition the initial incentive for the plan could be dwindling.

“His legacy, at this point, is as much economic as environmental,” Deborah Gordon, director of the energy and climate program at the Carnegie Endowment for International Peace, told The Christian Science Monitor in 2014. “His best chance of keeping his party in power is a good economic story.”

Expanding drilling offered a good economic story when prices were high, but gas and oil prices have fallen dramatically over the last few years. Crude oil in the last year alone has fallen from a high of $65 in March 2015 to under $30 in January 2016 in the New York stock exchange. 

Meanwhile halting the plan offers a boost for an environmental legacy for the soon-to-be-departing president. 

“If this is true, it’s a great day for the Atlantic coast, our beaches and the coastal economy that depends on it,” said Rachel Richardson, program director at Environment America, said to The New York Times. “This moment has come because Atlantic coast communities, businesses and citizens have all spoken up to protect their beaches, treasured marine life and President Obama listened.”

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