In conjunction with Canadian Prime Minister Justin Trudeau, President Barack Obama issued a statement on Dec. 20, saying that the United States “is designating the vast majority of U.S. waters in the Chukchi and Beaufort seas as indefinitely off limits to offshore oil and gas leasing.” Canada is designating all Arctic Canadian waters as indefinitely off limits to future oil and gas licensing, with a review every five years through “a climate and marine science-based life-cycle assessment.”
Obama has also placed 31 Atlantic subsea canyons off limits to oil and gas.
The president commented that he was making the move in the Arctic because of the important, irreplaceable values of the Arctic waters for “indigenous, Alaska Native and local communities’ subsistence and cultures, wildlife and wildlife habitat, and scientific research; the vulnerability of these ecosystems to an oil spill; and the unique logistical, operational, safety and scientific challenges and risks of oil extraction and spill response in Arctic waters.”
Executive order
The president has issued an executive order saying that he is mandating the land withdrawals for a period of time without specific expiry under the authority of section 12(a) of the Outer Continental Shelf Lands Act. The land withdrawal encompasses the entire Chukchi and Beaufort seas, apart from a 2.8 million acre strip of the Beaufort Sea with relatively high oil and gas potential offshore the coastline between Smith Bay and the western side of Camden Bay.
Geologists view the Chukchi Sea shelf as having the makings of a world class oil and gas province. But, as evidenced by Shell’s recent foray into the region, the remoteness and climatic challenges of the region would require a very large oil find and robust oil prices for a viable oil development. The Beaufort Sea continental shelf contains a continuation of the geology that hosts the operational North Slope oil fields and has some known, undeveloped oil pools.
Section 12(a) of OCSLA simply 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.” Commentators are saying that, although this section of the act has been invoked in the past in, for example, Obama’s withdrawal of the North Aleutian basin from oil and gas leasing, there is no precedent for any legal challenge to this section of the act.
A fact sheet published by the White House says that, while the Arctic withdrawal area contains oil and gas resources, production of these resources would be cost-prohibitive at today’s oil price levels and that, even with a 200 percent oil price increase, it would take 10 to 50 years to develop the resources, given the lead time involved in exploration and development. The fact sheet especially emphasizes the ecological importance and environmental fragility of the Chukchi and Beaufort seas.
“The president’s bold action recognizes the vulnerable marine environments in the Arctic and Atlantic oceans, their critical and irreplaceable ecological value, as well as the unique role that commercial fishing and subsistence use plays in the regions’ economies and cultures,” Interior Secretary Sally Jewell said in response to Obama’s action. “The withdrawal will help build the resilience of these vital ecosystems, provide refuges for at-risk species, sustain commercial fisheries and subsistence traditions, and create natural laboratories for scientists to monitor and explore the impacts of climate change.”
Walker responds
In a Dec. 20 press release Gov. Bill Walker said that he and Natural Resources Commissioner Andy Mack had met several times with Jewell, to highlight areas of the Arctic of economic importance to the state. Jewell has told the governor that Interior had taken into account what Walker and Mack had told her when figuring out the land withdrawals. Jewell was presumably referencing the area of the Beaufort Sea remaining on the table for future leasing.
However, Walker expressed his concern about the potential economic impact of the president’s decision on Alaskans.
“This unprecedented move marginalizes the voices of those who call the Arctic home and have asked for responsible resource development to lower the cost of energy to heat houses and businesses,” Walker said. “For centuries, the Arctic has provided food for those in the region. No one is more invested than Alaskans to ensure that the habitats within the Arctic are protected. To lock it up against any further exploration or development activity is akin to saying that the voices of activists who live in Lower 48 cities have a greater stake than those to whom the Arctic is our front yard and our back yard.”
Slammed by congressional delegation
Alaska’s congressional delegation has slammed the president’s action, saying that the action sides with extreme environmentalists, contradicts the administration’s own conclusions about Arctic development and will have lasting consequences for Alaska’s economy, state finances, and the security and competitiveness of the nation.
“The only thing more shocking than this reckless, short-sighted, last-minute gift to the extreme environmental agenda is that President Obama had the nerve to claim he is doing Alaska a favor,” said Sen. Lisa Murkowski. “President Obama has once again treated the Arctic like a snow globe, ignoring the desires of the people who live, work, and raise a family there. I cannot wait to work with the next administration to reverse this decision.”
“This announcement by the Obama administration is an affront to our representative democracy,” said Sen. Dan Sullivan. “Make no mistake - the president betrayed Alaskans today - especially those living in the Arctic - who were not consulted, and instead gave one final Christmas gift to coastal environmental elites. This decision is not about environmental protection or the economics of oil and gas exploration in the Arctic.”
“This decision only strengthens our resolve - as a resources oriented state - to overturn the heavy hand of government and empower our people and communities with new social and economic opportunities. The groundwork is already being laid to overturn this terrible decision,” said Rep. Don Young.
Industry reaction
“Today’s announcement is a stunning example of hypocrisy from President Obama,” said Kara Moriarty, president and CEO of the Alaska Oil and Gas Association. “In his announcement about the Bering Sea just last week, he claimed he was listening to Alaskans when he established the ‘climate resilience’ area. Then today, his announcement ignores the 76 percent of Alaskans who support resource development in the Arctic offshore, and 72 percent of Alaska Natives, who say local opinions should matter the most on this issue. It is foolish to believe the United States can have a strong, successful economy in the Arctic without oil and gas development.”
“We will fight this legacy move by the outgoing president with every resource at our disposal,” said Rex Rock Sr., president and CEO of Arctic Slope Regional Corp. “This decision will not stop our climate from changing, but it will inhibit our North Slope communities from developing the infrastructure, communications capability and technology necessary for growth. It’s a move which was made without any consultation from the largest private land owners in the U.S. Arctic and yet we will be the ones forced to live with the consequences.”
Environmentalists jubilant
Environmental organizations have a different perspective.
“Obama just took an important step to protect our oceans and his environmental legacy. Protecting the Arctic and Atlantic from dangerous drilling will give polar bears, right whales and other endangered species a fighting chance,” said Miyoko Sakashita, oceans program director at the Center for Biological Diversity. “This decision helps jump-start the resistance to Trump’s promised attacks on our environment.”
“We applaud President Obama’s actions today, which will permanently protect most of the Arctic Ocean and important parts of the Atlantic from expanded offshore drilling,” said Earthjustice President Trip Van Noppen. “As President Obama said at a May gathering with the leaders of five Nordic nations in Washington, D.C., ‘We have a moral obligation - to this and future generations - to confront the reality of climate change and to protect our planet, including our beautiful Arctic.’”
