The Polar Pioneer drilling rig. Photo: Shell Alaska
by Jennifer A. Dlouhy
(Bloomberg) — Environmental activists who dangled from bridges and paddled kayaks around an Arctic rig have a new strategy for stopping oil development off U.S. coasts: persuading President Barack Obama to use a 1953 law to bar offshore drilling permanently.
An obscure provision that’s been used to preserve coral reefs and walrus feeding grounds empowers presidents to exclude waters from future oil and gas development. Environmentalists want Obama to invoke that statute before leaving office to indefinitely block drilling in the U.S. Atlantic and Arctic.
They saw the opportunity after Royal Dutch Shell Plc abandoned Arctic drilling and Obama rejected the Keystone XL pipeline last year.
“We think this is a moment in time,” said Niel Lawrence, Alaska director of the Natural Resources Defense Council. “The last big thing this administration can do is take off the table the places where the government is not in the oil business, where the communities are not reliant on it, where the infrastructure isn’t in place and where the oil couldn’t come for 25 or 30 years.”
The idea pits old-school, conservation-minded environmentalists against activists focused on blocking development of fossil fuels that drive climate change. It comes as oil companies are backpedaling from the polar region amid a long streak of record low oil prices. Even so, it’s also vehemently opposed by oil industry leaders who say the U.S. needs access to more areas — not less.
“It’d be incredibly short-sighted for the administration,” said Louis Finkel, executive vice president of the American Petroleum Institute. The Arctic and Atlantic are essential to meet energy demand that the U.S. government expects to climb through 2040, he said.
The Obama administration has already ruled out an auction of Atlantic drilling rights as part of a proposed offshore leasing plan spanning 2017 to 2022. And the Interior Department is weighing whether to shrink or eliminate two other proposed sales of Arctic acreage still in that five-year blueprint.
But what the NRDC, the League of Conservation Voters and other offshore drilling foes envision are broader protections that could endure long after Obama’s five-year leasing plan has expired. It’s a political long-shot, but supporters believe it’s possible because Obama has already taken surprising steps to combat climate change.
“President Obama is stepping outside the normal, limited parameters of political calculus, which tends to operate on four-year-or-less timelines” and is “acting based on generational concerns,” said Franz Matzner, director of the NRDC’s Beyond Oil Initiative. “In the context of climate change, that means taking concrete steps now to trigger results 30 years from now.”
Advocates of the approach have scoured old documents to buttress their argument that Obama should act now, seizing his express authority under provision 12(a) of the Outer Continental Shelf Lands Act, which sets the framework for leasing U.S. coastal waters for oil, gas and other mineral development. There, a 24-word provision empowers the president to “from time to time, withdraw from disposition any of the unleased lands of the outer continental shelf.”
When lawmakers wrote the offshore law more than 50 years ago, they deliberately made the president’s power broad and open ended, without any limit on size or rationale.
While presidents have modified decisions from their predecessors to withdraw areas from drilling, they have never rescinded them altogether. And it’s not clear they would have the power to. A legal opinion from the U.S. attorney general in 1938 said similar designations “do not imply a power to undo.” And there have been no federal court rulings on the provision.
Activists say the action would help cement Obama’s legacy combating climate change and underscore the U.S. commitment to slash greenhouse gas emissions. It would also capitalize on the oil industry’s waning enthusiasm for the Arctic, as high development costs and persistently low crude prices spur Shell and other energy companies to forfeit drilling rights in the region.
“There’s a lot of momentum here,” said Alex Taurel, deputy legislative director for the League of Conservation Voters. It would be a signal to the world that Obama is “hastening the clean energy transition that allows the world to win on climate change.”
Unlike other environmental steps Obama can take during his final days in office, this one wouldn’t depend on action by Congress or federal agencies that can spend years getting a single rule across the finish line.
Key Largo Reef
It would be a novel — some conservationists say radical — use of a tool that has mostly served to permanently protect discrete, ecologically sensitive areas.
President Dwight Eisenhower kicked that tradition off in 1960, when he issued a proclamation creating a “Key Largo Coral Reef Preserve” in cooperation with the state of Florida. That open-ended proclamation contained no termination date, and the area remains protected today.
Former President George H.W. Bush used the provision to withdraw large swaths off the West Coast, the north Atlantic and southern Florida from oil and gas leasing — but just for 10 years. Former President Bill Clinton expanded and extended those Bush withdrawals through 2012, though his successor, George W. Bush, moved up the expiration date when oil prices spiked in 2008.
Obama has already used the 12(a) provision to protect Alaska’s Bristol Bay and parts of the Chukchi and Beaufort seas north of the state, including the Hanna Shoal area, a major walrus feeding ground. Those protections followed a multiyear campaign by Native Alaskans, fishermen and conservationists united to prevent oil and gas development there.
Some conservationists want to focus first on the immediate threat: potential Arctic lease sales in the next five-year offshore leasing plan. And they worry that the aggressive approach by climate-change activists could jeopardize a proven method for insulating pockets of the coast from industrial oil and gas activity — effectively goading congressional critics into repealing the provision.
Those concerns illustrate the escalating tension between a new generation of climate activists who have embraced a “keep it in the ground” approach to fossil fuels and traditional environmentalists who are focused on ecological safeguards, protecting certain species and conserving their habitat.
A White House spokesman did not respond to a request for comment. But in a May 16 response to a petition asking Obama to halt fossil-fuel development on public lands and waters, the administration delivered one line in boldface: “Even as we move full steam ahead towards cleaner energy, the United States will still need to use fossil fuels in the near term.”
It isn’t clear how many greenhouse gas emissions would be unleashed if energy companies tapped U.S. Arctic and Atlantic resources, but calculations from the Stockholm Environment Institute suggest a halt to oil and gas leasing on both federal lands and waters would keep 5 gigatons of carbon dioxide from entering the atmosphere between now and 2040.
Walling off the Arctic would show the U.S. is committed to a lower-carbon future, instead of keeping the options on the table just in case, said Representative Jared Huffman, a Democrat from California.
“We have to keep 80 percent of the world’s known fossil fuel reserves in the ground or we are going to irreparably damage this planet,” Huffman said. “It’s time to start taking these areas off the map” and “draw the line that all of the science is telling us we need to draw.”
© 2016 Bloomberg L.P
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