President Trump plans to issue an executive order reversing the previous Administration’s policy banning offshore oil and gas drilling in Arctic and Atlantic waters as soon as the end of the month, according to media reports of comments made by Interior Secretary Ryan Zinke on Thursday. While few details are known, the implementation of a new five year offshore leasing plan that includes the Arctic Ocean marks a significant and welcomed shift in policy, bringing with it new optimism for the Alaskan people and producers alike.
Currently, about 115 million acres of Arctic water are permanently blocked from offshore development, encompassing the vast majority of the Beaufort and Chukchi seas. Former President Obama enacted the ban late last year, using an obscure section of the Outer Continental Shelf Lands Act known as Section 12(a), which gives the president authority to withdraw unleased portions of federal waters from oil and gas development. While Section 12(a) had been used before, no other president abused the act’s power to permanently ban development, leading to questions of how such a decision could be overturned. However, previous presidents have revoked bans enacted through Section 12(a), as President George W. Bush did in 2008. As a result, many legal experts believe that President Trump has the power to cancel the current moratorium.
Overturning this ban couldn’t come soon enough, either. Billions of dollars in infrastructure projects are threatened or have been abandoned without oil and gas activities, along with the substantial economic benefits this activity brings with it. For example, Hilcorp, one of the key producers in Alaska, has invested an average of $300 million annually since 2012. But with the current ban placing restrictions on massive swaths of Arctic waters, further investment in the region has been suffocated, having a damaging impact on almost all aspects of Alaskan life. As Alaskan Senator Lisa Murkowski recently stated at a panel discussion hosted by the Woodrow Wilson Center’s Polar Initiative program,
“Whether it is economic development, research activities, investment in infrastructure or environmental stewardship, they’re all interconnected… and what happens in one activity can be cross-fertilized in other activities as well.”
Producers are not the only ones supporting action to overturn the ban, as the majority of Alaskans support and depend on energy development in the region. As a recent survey found, 72 percent of Alaskan Natives and 76 percent of Alaskans support offshore oil and gas development. This is because oil and gas development in the state’s main economic driver. For example, in addition to providing jobs and supporting infrastructure development, taxes from oil and gas production accounted for roughly 90 percent of Alaska’s general revenue in 2015.
While an executive order has not been finalized, a reversal of the Arctic offshore drilling ban would be tremendously beneficial for Alaska and its people. Between supporting key infrastructure, bringing in billions of dollars in investment and providing a majority of the state’s tax revenue, oil and gas development is the lifeblood of the region.