Wednesday, January 18, 2017

Shale Law in the Spotlight: President Obama Issues Ban on Oil and Gas Drilling in the Arctic and Atlantic Oceans

In the final month of his presidency, with the presumed intention of preserving his environmental legacy, President Barack Obama has announced “historic steps to build a strong Arctic economy, preserve a healthy Arctic ecosystem and protect our fragile Arctic waters, including designating the bulk of our Arctic waters and certain areas in the Atlantic Ocean as indefinitely off limits to future oil and gas leasing.”

In the statement dated December 20, 2016, President Barack Obama permanently banned offshore oil and gas drilling in the U.S. Arctic and Atlantic oceans, acting on the authority vested by Section 12-A of the 1953 Outer Continental Shelf Lands Act (OCSLA). According to Section 12-A, “[t]he President of the United States may, from time to time, withdraw from disposition any of the unleased lands of the outer Continental Shelf.” In other words, the President of the United States has unilateral authority to withdraw areas of federal lands from oil and gas development. Some experts have suggested that only an act of Congress would carry enough authority to overturn President Obama’s ban given the delegated unilateral powers provided to the U.S. President under Section 12-A of the 1953 OCSLA. There is no legal precedent yet, however, to definitively resolve this question.

Relating to the Atlantic Ocean, President Obama has committed to prevent oil and gas development from 31 Atlantic canyons not yet protected by the National Monuments Authority (NMA) in order to preserve their ecological features. According to the White House, 5,990 square miles of federal lands located along the Atlantic continental shelf, starting from offshore New England down to the Chesapeake Bay, are being withdrawn indefinitely from oil and gas leasing. Many studies of Atlantic canyons have established that “[t]he withdrawal of these canyons from mineral leasing will help protect habitats, preserve critical ecological hot spots, conserve economically valuable fisheries, afford long-term opportunity for research and exploration, and help ensure that species dependent on the habitats of the canyons are protected.”

As for the Arctic seabed, President Obama identified new portions of the Arctic Ocean to be indefinitely banned from oil and gas development, including the Chukchi Sea and part of the Beaufort Sea where oil and gas activity have not yet occurred, in addition to 125 million acres in Arctic federal waters already protected from oil and gas leasing. The White House stated that “[e]ven recognizing the substantial steps taken by this Administration to improve the safety of potential Arctic exploration and development, there would still be significant risks associated with offshore drilling operations given that the U.S. Arctic is characterized by harsh environmental conditions, geographic remoteness, and a relative lack of fixed infrastructure and existing oil and gas operations.” Supporting this statement, the Interior Department has analyzed that oil spills are to be expected, “based on historical data and the harsh nature of Arctic conditions, that there could be up to one large spill (3,282 barrels) in each of the Chukchi and Beaufort Seas from a platform and up to four spills from pipelines (3,750 barrels) in each sea based on estimates of production volume.”

In the meantime, through the issuance of a United States-Canada Joint Arctic Leaders’ Statement, Canadian Prime Minister Justin Trudeau further stated that his government would halt oil and gas leasing in Canadian Arctic waters, which decision is to be reviewed every five years through a climate and marine science-based life-cycle assessment, while acknowledging the Obama Administration’s efforts to address climate change. This permanent ban follows several U.S. actions undertaken under the March 2016 U.S.-Canada Partnership on Climate Change, Clean Energy, and Environment.

Following the investiture of President-elect Donald Trump as U.S. President on January 20, 2017, many changes in terms of energy and environmental policies are to be expected.  The status of this permanent ban and the authority of the new administration to alter or overturn it remains an issue to follow. Stay tuned!

Written by Chloe Marie – Research Fellow

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