Editorial: Apparent reversal

On Sept. 8, 2020, President Donald J. Trump visited Jupiter, Fla., to announce he would extend the ban on Outer Continental Shelf mineral leasing along the state’s coasts as well as those of Georgia and South Carolina. Three weeks later Pres. Trump added North Carolina to the order. The current ban, covering the Eastern Gulf of Mexico (EGOM) was to expire July 1, 2022. Pres. Trump’s action would extend it through June 30, 2032 and expand its geographic scope.

In making the order, Trump cited 1953 Outer Continental Shelf Lands Act Section 43 U.S.C. 1341(a), which states that “the President of the United States, may, from time to time withdraw from disposition, any of the unleased lands of the Outer Continental Shelf.” The 2006 Gulf of Mexico Energy Security Act, signed into law by George W. Bush, established the current EGOM ban.

The American Petroleum Institute decried extension of the moratorium as “the wrong approach at the wrong time,” citing hundreds of thousands of potential jobs, US energy security, and billions of potential dollars lost from state coffers. The National Offshore Industries Association said, “limiting access to our offshore energy resources only shortchanges America and dulls our national outlook.”

Pres. Trump generally has acted as an ally of the oil and gas industry, offering royalty reductions and lease suspensions to producers operating on public lands, reversing the previous administration’s ban on Arctic oil and gas leasing, and as recently as 2 years ago proposing a sweeping expansion of drilling is US waters, when the US Department of the Interior proposed a 2019-24 US Outer Continental Shelf (OCS) oil and gas leasing program which would have made more than 90% of the nation’s federal offshore acreage available. By contrast, the 2017-22 program enacted late in the Obama administration put 94% of the OCS off-limits to oil and gas activity.

Making it permanent? 

Congressman Francis Rooney (Fla.– R) last year introduced H.R. 205 to make permanent the moratorium on drilling in the EGOM east of the Military Mission Line (MML), which demarks a training area. The bill passed the House in September 2019 by a 248-180 vote. Rooney has since lobbied the Trump administration regarding the need to keep offshore drilling from being “a potential danger to our economy, ecology, and military readiness,” according to a statement issued after Trump’s order, and called on the Senate to “realize what the House of Representatives and President Trump realize — that Florida needs to be protected from offshore drilling — and to convert this executive order into formal legislation like H.R. 205 so that it cannot be easily reversed by a future administration.”

But this isn’t likely to happen. Nor should the country’s energy companies spend too much time handwringing regarding the apparent reversal and what it means regarding Trump’s view of the industry.

Look no further for evidence than the similarly timed decision to deny retroactive biofuels waivers to US refiners. The waivers had been introduced to help mitigate the cost of blending requirements to smaller refiners and Trump had roughly quadrupled the number of exemptions granted, with units of some of the country’s largest oil companies among the recipients.

These actions have more in common than a seeming reversal of course by a President who has long touted his desire for the US to achieve energy dominance: they woo voters in states Trump needs to win to remain President, only potentially undermining him in states he’s likely to carry such as Texas and Louisiana.

So, rest easy oil and gas. Pres. Trump is still acting on your behalf. He just needs to get reelected to continue to do so. At which point he can roll back the orders as easily as he put them forward.