Obama Said to Block Selling New Drilling Rights in U.S. Arctic

The Shell-contracted Noble Discoverer drilling rig in Dutch Harbor in Summer 2012. Photo: Shell Alaska

By Jennifer A. Dlouhy

(Bloomberg) — The Obama administration is set to block the sale of new oil and gas drilling rights in U.S. Arctic waters under a five-year blueprint, handing a victory to environmentalists who said the activity threatened whales, walruses and other wildlife in the region.

The details were confirmed by people familiar with the plan who were not authorized to speak publicly before it is issued, something that is expected within days. It is subject to a 60-day congressional review and could be rewritten by President-elect Donald Trump, in a process that could take months or years.

Because the Interior Department had already removed Atlantic waters from consideration, the decision to leave out the Chukchi and Beaufort seas north of Alaska largely limits new drilling lease auctions between 2017 and 2022 to the Gulf of Mexico. The fate of a proposed sale in Alaska’s Cook Inlet could not be learned.

The move is a blow to oil companies that have pressed the Obama administration to open up more areas for offshore drilling, arguing new territory is needed to build on decades of energy development in the Gulf of Mexico. Oil companies had largely abandoned existing tracts in the Chukchi Sea, after Royal Dutch Shell Plc’s 2015 drilling campaign there did not yield a commercial discovery.

Environmental activists have pressed President Barack Obama to go further and use a provision in a 1953 law to permanently restrict oil development in U.S. Atlantic and Arctic waters.

© 2016 Bloomberg L.P

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