Trump Administration to Open Oil & Gas Leasing on the Atlantic Outer Continental Shelf (OCS)

Guest post by David Middleton

Trump to Open the Door for Oil Drilling Off U.S.’s East Coast

By Jennifer A Dlouhy

December 11, 2017, 4:00 PM CST

  • Proposal for Atlantic exploration set to be released soon
  • New five-year plan would replace one put in place by Obama

The Trump administration is preparing to unveil as soon as this week an expansive offshore oil plan that would open the door to selling new drilling rights in Atlantic waters, according to people familiar with the plan.

President Donald Trump ordered his Interior Department to write the new blueprint with the aim of auctioning oil and gas drilling rights off the U.S. East Coast — territory that his predecessor, former President Barack Obama, had ruled out. The Interior Department’s coming draft proposal, an initial milestone in replacing the Obama-era sale plan, dovetails with the oil industry’s push for new places to drill, said the people, who asked not to be identified before a formal announcement.

Trump’s proposal would span the years 2019 to 2024, replacing the Obama plan, which runs through 2022.

Industry leaders have lobbied the Trump administration to sell drilling rights in the U.S. Atlantic as a way to complement existing oil production in the Gulf of Mexico. It is not clear how much oil and gas exists off the East Coast, because existing data stems largely from decades-old geological surveys and more than four-dozen wells drilled in the 1970s and 1980s.

Oil companies also want the Trump administration to sell drilling rights in Arctic waters north of Alaska and in the eastern Gulf of Mexico — where federal law bars new oil leasing through 2022. Lawmakers from Florida have fought efforts to expand offshore drilling they say would imperil the state’s tourism-tied economy and are seeking to extend that ban.



With the Senate tax bill opening up ANWR and no valid reasons to prohibit drilling in the Eastern Gulf of Mexico, this is shaping up to be the best energy administration in US history.

On top of all of this, after announcing our withdrawal from the Paris climate joke, Trump is using our remaining 3 years as a party to the joke as a vehicle to promote American fossil fuels and nuclear power.

Oil and Gas Potential of the US Atlantic OCS

The Bureau of Ocean Energy Management’s (BOEM) 2014 estimate of technically recoverable hydrocarbon potential to be 4.6 billion barrels of oil and 38 trillion cubic feet (TCF) of natural gas.

While much of this is rank frontier exploration, the northern boundary of the US Atlantic OCS is adjacent to Canada’s very active Scotia Basin.



Canada’s total offshore Atlantic production is about “180,000 barrels of oil per day and 150 million cubic feet of natural gas per day.”  Unlike the US Federal and State governments, Canada has been actively marketing its Atlantic offshore hydrocarbon potential.



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December 13, 2017 6:31 am

While Trump is at it, he should definitely open up the off shore drilling on the west coast, especially off the coast of California where reserves are probably very high. So much winning!

Retired Kit P
Reply to  Earthling2
December 13, 2017 7:04 am

Before North Korea uses it for target practice.

Reply to  Earthling2
December 13, 2017 1:09 pm

Or we could just drain all the “evil” fossil fuels from all the parked private jets in Hollywood. That could keep us going for a while and has the added benefit of keeping the ignorant riff raff grounded and out of sight for the foreseeable future.

December 13, 2017 6:31 am

I believe I saw in comments over at Euan Mears, that while it has been opened or is about to be, not many are interested in taking it up.

Just what I have read, mind. But I will be curious to see who steps forward and what the ecoterrorists will claim if little happens there.

Reply to  ClimateOtter
December 13, 2017 10:06 am

They might be worried about spending money to explore only to have the next administration close the areas off again.

Rhoda R
Reply to  ClimateOtter
December 13, 2017 2:57 pm

I thought it was the Anwar region that the oil companies weren’t interested in bidding on. Makes sense if the east coast is going to be opened.

December 13, 2017 6:35 am

They are going to have to set the rules in stone for the oil industry to dive in. The last thing they want to do is invest billions in a frontier area only to have the rug pulled out from underneath them by the next administration.

December 13, 2017 6:39 am

At this point it is a little difficult for me to get worked up about this either way. When you look at our net Petroleum and Products imports and then subtract off Canada (so our net imports from countries not named Canada) you get <1M barrels per day, 16oz for each person in the country, 5% of our consumption. The SPR has enough reserves to replace 2 years at that rate, so this isn't about security.
Also, if we wanted to increase oil production the lowest cost wells would be fracked wells on land. Oil typically needs to be $80+ before offshore becomes viable. Long before oil got up to $80 the marginal shale wells would ramp up and put a lid on prices. So there is no economic argument either.
So in other words, to me the headline should say "Trump offers to let businesses lose money drilling for unneeded oil that may or may not exist"

D. J. Hawkins
Reply to  chadb
December 13, 2017 6:49 am

In order to find out how much oil and gas might be in a leasehold, you have to pony up for the lease. After your survey you know whether or not you have anything of interest and at what price points it makes sense to start dropping drill rigs. Eventually, the lease will be worth tapping. Eventually.

Reply to  D. J. Hawkins
December 13, 2017 6:56 am

Correct, but it is unlikely to be worth drilling anything offshore until we use up so much shale oil that the price rises to $80/bbl. That is a time horrizon that is beyond 2024. Alternatively the cost of putting a rig on a platform in a region where there are hurricanes, holding it steady and pumping oil either through an undersea pipeline or offloading it onto a boat comes down by half. Frankly my money is on wells you can drive to rather than have to float on top of.

Reply to  David Middleton
December 13, 2017 7:13 am

Shallow water. The finds you point to are both 1000m. Mexico. I think the costs might be slightly higher with the US EPA and permitting requirements. The reality is though, I am not opposed to oil leasing. I am just saying if I were an oil company I would look at shale fields long before offshore. The only reason I would look at offshore is that from a single negotiated lease I could access large quantities of oil rather than managing dozens or hundreds of contracts with land owners in the Permian basin.
However, I may be wrong. Offer the lease by all means, let’s see if there are bidders!

Reply to  David Middleton
December 13, 2017 7:14 am

I have no idea what happened to my comment. The finds you pointed to are less than 200m. The potential leases have depths from 200 to 1000+m.

Keith J
Reply to  chadb
December 13, 2017 10:57 am

Chad, where did you get those numbers? Offshore deepwater is closer to $50/barrel. Deepwater also has the flexibility in field location as the platform is semisubmersible which means station position will vary. Gone are rigid platform or even tension leg . One platform services multiple wells over hundreds of acres. Then there are tiebacks which can be miles from the platform.

First, a suitable field must be found. Then the money will flow. The majors plan 20 years in the future. Big projects like Crazy Horse ( renamed Thunder Horse) and Atlantis were planned when crude was under $15 a barrel.

John W. Garrett
December 13, 2017 6:43 am

Johns Hopkins University’s Board (Mikie Bloomberg is a very big donor) voted to divest all thermal coal stocks from the university’s endowment funds.

This follows on the heels of Hopkins’ divestment of tobacco stocks in 1991. Of course, from 1998 ’til the present, the stocks of Philip Morris, R.J. Reynolds, British American Tobacco PLC, U.S. Tobacco (UST Corp) and Gallaher Group PLC (including the companies that were subsequently spun out of Philip Morris such as Kraft Foods, Altria, and Philip Morris International) proved to be fantastic investments providing spectacular returns for shareholders.

Over many years, managing endowments in accord with the latest politically correct cause de jour has proven to be a colossally counter-productive endeavor, producing sub-standard returns. It’s one reason (among many) that I will never again provide financial support to my various alma maters.

Reply to  John W. Garrett
December 13, 2017 10:10 am

Such divestment moves just means that there is a buying opportunity for investors that aren’t crazy.

December 13, 2017 6:48 am

Not opening the eastern gulf is stupid to the max……when all the current wells are upstream

December 13, 2017 7:02 am

Massachusetts politics can be a strange beast. The state is as liberal as can be, with a host of liberal policies, like support for wind, solar, RGGI (the Regional Greenhouse Gas Initiate), opposition to a new natural gas pipeline.
Curiously, when last checked to get a sense of things, the politicians were quietly *pro* offshore oil development. (very quietly).
It seems they got a whiff of that fantastic substance which allows them to set aside all principles, Money.
Whether they will support a republican president in this matter is another question entirely.

December 13, 2017 7:26 am

As the green blob’s heads are already exploding over Trump’s current energy policies, there are no reasons to not lease both the east and west coast offshore. Doing away with the Carter era nuclear rules would be a really good idea as well. Give the organized greens multiple things to oppose, and spread their efforts thin.

Jeroen B.
Reply to  Tom Halla
December 13, 2017 7:30 am

I wonder if green blob head explosions are a viable alternative energy source 😉

Reply to  Jeroen B.
December 13, 2017 7:32 am

Render their heads for biodiesel?/sarc

Reply to  Jeroen B.
December 13, 2017 10:11 am

I suspect it’s more an implosion rather than an explosion.

December 13, 2017 7:27 am

Good. Keep it coming!

Alan Robertson
December 13, 2017 7:29 am

In 1975, I listened to a Park Ranger in Maine go on about how offshore drilling would be bad for fisheries and lobsters, etc. The world had just suffered through a couple of lean years after the price shock of the Arab oil embargo of 1973, but officialdom was against the big bad oil companies, even then.

Retired Kit P
Reply to  Alan Robertson
December 13, 2017 8:15 am

People who fish are worried about their ability to earn a living.

At the time I was in the navy and stationed in New England and enjoyed lobster from the market down where the boats docked. If you can boil water you can cook lobster.

Being on a fixed income at a time when oil prices were increasing limited our ability to enjoy lobster.

Talking Econ 101 does not make me an economist but a low cost supply of energy is good for the economy and therefore the environment.

Alan Robertson
Reply to  Retired Kit P
December 13, 2017 9:25 am

I was also stationed in New England, at the time. The Ranger’s main point was that if an oil spill occurred during the annual lobster spawn, an entire year’s production would be lost, as he talked about the dependence of the Maine economy on fishing and lobstering, with NIMBY points sprinkled throughout his talk.

I couldn’t help wondering if the Maine lobstermen might be better off if it didn’t cost them so much to fuel their boats and pay for everything they need, (just like their neighbors,) while risking localized, temporary setbacks to their harvest.
Having been raised in a family employed in the Western US oil industry, his rationale seemed shortsighted and a bit selfish, albeit political, since the ecosystem back home was at risk (minimal) to provide him with fuel.

John W. Garrett
December 13, 2017 7:39 am

David Middleton
We’re drilling like crazy in the deepwater of the US Gulf of Mexico…

As much as I wish you were correct, TransOcean, Diamond Offshore and Tidewater would vehemently disagree.

John W. Garrett
Reply to  David Middleton
December 13, 2017 11:44 am

With all due respect, DO will lose money this year. RIG is marginally profitable. Both have suspended their dividends. DO’s fleet has been reduced to 19 from a peak in the high 30s and has a number of cold-stacked floaters. TDW (the largest offshore supply vessel/crewboat/anchor handling operator in the GOM) went through a “pre-pack” bankruptcy reorganization this year. Long term day rates negotiated 3 and 4 years (or more) ago, continue to roll over to lower day rates. While there are pockets of relative strength offshore, on the whole, things are not all “beer and skittles.”

December 13, 2017 7:49 am

As an aside, I see extensions of state boundaries extending into the shelf. How big an influence do the individual states have on permits and operations?
Georgia must not have gotten the notice about the meeting that divvied up the parcels, They seem to have been squeezed out. 🙂

michael hart
December 13, 2017 7:56 am

I guess the “green” activist shareholders at Exxon will now take the opportunity to point out how much money could be saved by not drilling at all in these areas. In Greenpeace-accounting that would be called profits. It’s a similar calculus to that used by NIMBYs who believe we don’t need industry and can all get rich just by re-selling our existing houses to each other for ever-increasing prices.

December 13, 2017 8:19 am

Still gonna need certainty. The first seimic data will be large spec surveys and they will need large amounts of prefunding for the seismic industry to take the chance, So the oil majors are gonna need to know that prefunding is worth it and the area wont be shut down by the next administration. Trump being a lock for a 2nd term is far from certain. And the majors are gonna want to know if they start investing in drilling they will be able to produce if anything is found. There was more certainty when Mexico opend up its waters than there is for the eastern seaboard.

Reply to  David Middleton
December 13, 2017 3:50 pm

Surely not a reference to the Obama presidency?


December 13, 2017 9:45 am

Who knows, we might actually get some real data out of this.

Bob Denby
December 13, 2017 10:16 am

Trump again proves the wisdom of respecting common sense, transcending the minutiae of opposition!

December 13, 2017 3:12 pm

Talking about winter and gas supply, some green chickens 🐓 are coming home to roost:

“If the rule you lived by brought you to this, what use was the rule?”

John W. Garrett
December 14, 2017 7:56 am

I enjoy (and benefit from) Mr. Middleton’s knowledge.

December 16, 2017 9:16 am

This is great news. Opening up ANWAR is also a very important link providing for greater utilization of the Alaskan pipeline and eventually further exploration of the Artic outer shelf which holds the promise of huge oil deposits. The Russians have a head start on Artic exploration and have expanded their military in the area to protect their interests or possibly to try and expand them. Trump is building a foundation for not only energy independence but a return to being the solid world’s leader in energy exportation. This nation became great on plentiful. affordable energy and this goes a long way to making the US great again.

December 22, 2017 8:44 pm

I have seen DOE estimates of gas reserves off of New England at about 17 trillion cubic meters. Been looking for it scarce!

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