On Thursday, the Department of the Interior (DOI) announced a proposal to expand federal offshore drilling areas substantially, which could put more than 90 percent of the federal offshore land known to contain oil and gas up for auction in the five years between 2019 and 2024.
The offshore drilling areas include areas off the coast of Alaska, in the Pacific Region, in the Gulf of Mexico, and in the Atlantic Region. But states like California, Oregon, and Washington, as well as Virginia and Florida, are likely to push back on federal approval to drill off their coasts—even if the state itself doesn't have jurisdiction over the federally-owned ocean floor being sold.This week's announcement comes just a week after the Trump Administration's DOI proposed a rollback of rules promulgated after the Deepwater Horizon explosion in 2010. The Deepwater explosion killed 11 oil rig workers and resulted in millions of gallons of oil spilled in the Gulf of Mexico, followed by widespread environmental devastation. After the spill, the Obama Administration proposed rules requiring third-party certifications of certain equipment used on oil rigs, expanded failure reporting requirements, and new system design safety requirements among other things. The Trump Administration contends that these requirements are burdensome for oil drillers (PDF).
Coupled with those potentially relaxed offshore oil drilling rules, Arctic, Pacific, and Atlantic lease sales are particularly contentious.
In Alaska, the DOI noted that it won't be pursuing lease sales of an area in the North Aleutian Basin Planning Area due to a 2014 withdrawal from lease consideration by President Obama. But the proposal documents claim that an Executive Order made by Trump in April reverses a December 2016 decision by former President Obama to withdraw an additional 100 million acres of Arctic as well as Atlantic offshore land, so those lands could potentially be up for lease.
In the Pacific, California has prohibited new offshore drilling leases in state waters since 1969, and the state has successfully blocked federal attempts to lease non-state-owned land.
What happens 3 miles offshore doesn't stay 3 miles offshore
Other states may be looking to do the same. According to the New York Times and McClatchy, state leaders who oppose offshore oil drilling are as varied. Republican Governor Rick Scott of Florida said in a statement yesterday that he had requested an immediate meeting with Interior Secretary Ryan Zinke to have coastal regions near Florida removed from the list. Democratic and Republican governors of New Jersey, Delaware, Maryland, Virginia, North Carolina, South Carolina, California, Oregon, and Washington all oppose the practice. And Democratic senators from Florida and Massachusetts, California Attorney General Xavier Becerra, and Republican South Carolina Representative Mark Sanford have also come out in opposition to new leases being auctioned off outside of their constituency.
In fact, of the 32 potentially-affected governors and state agencies that the DOI surveyed, only seven offered full support of the department's plan (Section 9-2). Two offered conditional support, and 23 opposed the plan.
Opposition may be for a variety of reasons. For Pacific coast states, concerns about repeating the misfortune of the Deepwater Horizon disaster, the 1989 Exxon Valdez disaster, or the 1969 Santa Barbara oil spill may be at the forefront. Florida's tourism industry also took a hit after Deepwater, which is something costal constituencies in that state aren't eager to revisit. Other states that have climate change-specific legislation may object to adding refineries to their coastlines.
Still other regions might have more practical concerns: although revenues from leases and oil production are generally shared with the state, the Department of the Interior admits that it "cannot expand, extend, or otherwise revise revenue sharing provisions to further the equitable sharing of the developmental benefits and environmental risks" that stem from drilling. Instead, any revision of revenue sharing would have to go through Congress.
Of course, this is all several steps ahead of where we are now. Currently the DOI has only proposed this Outer Continental Shelf Oil and Gas leasing program. Public meetings will be held around the country according to the DOI, and public comments will be solicited starting Monday.
Still, making outer continental shelf areas available to oil and gas industry was a major cornerstone of Trump's campaign, and the practice stands to bring in significant revenue to the Treasury in royalty payments. But if states don't want the risk, do they have the power to block federal leases on the outer continental shelf?
According to the Interior Department's Bureau of Ocean Energy Management (BOEM), state waters extend three miles off a state's "submerged lands boundary" in most cases, and beyond that boundary, the federal government can put oceanic area up for lease. After a particularly devastating oil spill off the coast of Santa Barbara in 1969, Congress amended the rules that permit federal leasing of the outer continental shelf, requiring "a detailed environmental review before any major or controversial federal action" and creating the Coastal Zone Management Act (CZMA), which allows states to review any federal action that could affect their coasts.
According to Holly Doremus, a professor of environmental regulation at UC Berkeley Law, the CZMA would be key to any state's challenge of a federal lease off its shoreline. Under that Act, states have the right to demand that federal actions be consistent with state plans, which can disqualify certain leases from the auction block.
Still, there have been challenges to how broadly a state can define its plans, and the President is allowed to override a state's opposition to a lease if he determines that it's paramount to the interests of the nation. "I think that's only been invoked once, in the case of Navy exercises using sub-detecting sonar off the coast of California," Doremus told Ars in an e-mail. "At worst for the states, though, consistency review is a powerful way to slow down any federal move toward opening offshore waters."
Undoubtedly, there will be objections raised by states based on the impact of the Deepwater Horizon disaster on the ecology and tourism industries of the Gulf Coast in 2010. Jordan Master, the Executive Director for the Center for Law, Energy, and the Environment (also at UC Berkeley), told Ars, "we are proposing opening up vastly increased offshore areas to oil production, many of which are in ecologically extremely sensitive areas, while we remove safety regulations and operate under an outdated restoration framework." That would be a hard sell for representatives in certain coastal regions.
Options down the road
Doremus added that there's another way states can make trouble for the federal government: by denying permits for onshore support equipment. "It's tough to have an offshore oil production facility without some onshore support activities," the professor wrote. "States control whether and where those can be built within state boundaries, including things like pipelines that would have to cross state offshore lands (the first three miles out in most states) to get onshore."
Another option could potentially be used by South Carolina and has been used by Florida to prevent offshore oil wells: invoking military training needs to prevent drilling. Florida legislators have been hoping to extend a provision that has protected the Eastern Gulf from oil drilling for years due to a drilling moratorium in the area so the military can test "emerging technologies such as hypersonics, autonomous systems, and advanced sub-surface systems," according to a May letter from the Department of Defense to a Florida congressman.
Another issue with the Trump Administration's efforts to assert "energy dominance" over the oil at the bottom of the ocean is simple economics. The plan the DOI is proposing is a five-year plan—spanning 2019 to 2024—and whether giant oil companies want to buy leases in those five years will depend on the price of a barrel of oil, projections for the price of a barrel of oil over a standard 10-year lease period, and how much it would cost to get that oil out of the ground deep below the sea.