Obama’s Oil Complex

The administration plans to open East Coast waters to future drilling even as it toughens protections in Alaska.

National Journal
Ben Geman
Jan. 26, 2015, 2:39 p.m.

When it comes to oil drilling and en­vir­on­ment­al re­stric­tions, the White House is all over the map this week — lit­er­ally.

Pres­id­ent Obama on Sunday said he wants to per­man­ently de­clare more than 12 mil­lion acres of Alaska’s Arc­tic Na­tion­al Wild­life Refuge as wil­der­ness, block­ing oil and gas de­vel­op­ment in the coastal plain of the refuge that the state and oil com­pan­ies have long coveted for drilling.

But Obama’s In­teri­or De­part­ment is also set to pro­pose al­low­ing new off­shore drilling in the At­lantic Ocean, which is cur­rently off-lim­its to de­vel­op­ment, mul­tiple sources tell Na­tion­al Journ­al. The draft plan could be an­nounced as soon as Tues­day, and it’s ex­pec­ted to in­clude leas­ing off the coasts of North and South Car­o­lina, and Vir­gin­ia.

The same plan, a sched­ule of oil-and-gas drilling lease auc­tions between 2017 and 2022, will also pro­pose new re­stric­tions against ex­plor­a­tion in Arc­tic wa­ters off the Alaska coast­line, ac­cord­ing to the of­fice of Re­pub­lic­an Sen. Lisa Murkowski of Alaska.

For the White House, the suite of policy de­cisions re­flects a polit­ic­ally com­plic­ated re­la­tion­ship with do­mest­ic oil de­vel­op­ment, and it will in­vite sep­ar­ate battles with both Re­pub­lic­ans and green act­iv­ists.

En­ergy con­sult­ant Kev­in Book says Obama’s over­all en­ergy policy, not just oil and gas, is “give a little, take a little.” He points out reg­u­lat­ory re­stric­tions on moun­tain­top coal min­ing in Ap­palachia, while reg­u­lat­ors haven’t gone after West­ern states’ coal pro­duc­tion.

When it comes to oil and gas spe­cific­ally, Book sees a “green­ing up,” point­ing to re­cent policies such as planned meth­ane pol­lu­tion reg­u­la­tions. “It seems like in the fi­nal two years there may be more take than give when it comes to oil and gas,” said Book, the man­aging dir­ect­or of Clear­View En­ergy Part­ners.

En­vir­on­ment­al­ists, since early in Obama’s first term, have used closed-door meet­ings with White House of­fi­cials and pub­lic ad­vocacy to press for new pro­tec­tions for the Arc­tic, in­clud­ing the refuge. Drilling isn’t al­lowed in AN­WR now, and it would take an act of Con­gress and a sup­port­ive pres­id­ent to ap­prove it, but green groups want even firmer pro­tec­tions.

At the same time, the ad­min­is­tra­tion has for years been ap­plaud­ing the surge in do­mest­ic oil pro­duc­tion, which, while largely on state and private lands, hasn’t stopped Obama from re­mind­ing voters it has oc­curred on his watch.

Obama has pushed for At­lantic Coast leas­ing be­fore. In late March 2010, he gave a speech an­noun­cing an In­teri­or lease sale plan that would open areas in the mid- and south At­lantic to drilling. Long-stand­ing con­gres­sion­al bans had fallen apart in 2008 amid soar­ing oil prices.

But just three weeks after the an­nounce­ment, the Deep­wa­ter Ho­ri­zon drilling rig blew up in the Gulf of Mex­ico, claim­ing 11 lives and touch­ing off the worst oil spill in U.S. his­tory. The White House backed off, and the plan kept the At­lantic off-lim­its even though the le­gis­lat­ive morator­i­ums were gone.

Obama’s AN­WR pro­pos­al is also a throw­back of sorts, put­ting the long-sim­mer­ing, emo­tion­al battle over the refuge back in the polit­ic­al spot­light.

Murkowski, who strongly fa­vors de­vel­op­ment, spoke per­son­ally with In­teri­or Sec­ret­ary Sally Jew­ell on Fri­day even­ing after meet­ing with a top In­teri­or aide about vari­ous Alaska policies earli­er in the day, spokes­man Robert Dillon said. Murkowski is furi­ous over the White House ef­forts on AN­WR, off­shore drilling, and oth­er policies she calls a “stun­ning at­tack” on her state’s sov­er­eignty.

“I have tried to work with this ad­min­is­tra­tion — even though they’ve made it ex­tremely dif­fi­cult every step of the way — but those days are of­fi­cially over. We are left with no choice but to hit back as hard as we can,” said Murkowski, the chair­wo­man of the Sen­ate En­ergy and Nat­ur­al Re­sources Com­mit­tee and the sub­pan­el of the Ap­pro­pri­ations Com­mit­tee that over­sees In­teri­or’s budget.

Ac­cord­ing to Murkowski’s of­fice, the 2017-2022 plan will put wide swaths of Arc­tic wa­ters off Alaska’s coast off lim­its. A num­ber of en­ergy com­pan­ies already hold leases in por­tions of the Beaufort and Chuk­chi seas, and Murkowski’s of­fice said they’re con­cerned that while those leases are pro­tec­ted, new re­stric­tions nearby could make de­vel­op­ing them more dif­fi­cult.

Wil­der­ness pro­tec­tion was not a big fo­cus for the White House dur­ing Obama’s first term, but the ad­min­is­tra­tion has got­ten far more ag­gress­ive in the second by des­ig­nat­ing a series of ma­jor new na­tion­al monu­ments.

But Obama doesn’t have the same power to per­man­ently keep AN­WR off-lim­its to drilling without Con­gress, and the chances of con­gres­sion­al ap­prov­al of Obama’s wil­der­ness pitch are re­mote.

In most re­spects, In­teri­or’s new con­ser­va­tion plan an­nounced Sunday changes little be­cause the area is already off-lim­its to rigs, but act­iv­ists were non­ethe­less de­lighted by what they say is now a form­al pro-pro­tec­tion stance by In­teri­or reg­u­lat­ors.

Ac­cord­ing to In­teri­or, it’s the first time the de­part­ment has taken a form­al po­s­i­tion on AN­WR man­age­ment since 1987, when the Re­agan ad­min­is­tra­tion urged Con­gress to open it up for drilling.

“This is the first pro­act­ive con­ser­va­tion step on the refuge in a really long time,” said Kristen Miller, con­ser­va­tion dir­ect­or for the Alaska Wil­der­ness League. “This is an amaz­ing step.”

But while he’s draw­ing cheers from his green base on AN­WR, Obama will face op­pos­i­tion from en­vir­on­ment­al­ists by in­clud­ing At­lantic Coast wa­ters in the new off­shore leas­ing plan.

Claire Dou­glass, the cam­paign dir­ect­or for cli­mate and en­ergy with the group Oceana, said the or­gan­iz­a­tion is work­ing with oth­er en­vir­on­ment­al groups and loc­al com­munit­ies to push back. She called oil-and-gas leas­ing a threat to coastal in­dus­tries such as tour­ism and fish­ing.

“We ex­pect it in the draft; however, we are con­fid­ent that the ad­min­is­tra­tion will do the right thing and listen to the loc­al op­pos­i­tion and take out the At­lantic from the fi­nal pro­gram,” Dou­glass said in an in­ter­view.

This story has been up­dated.

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