U.S. appeals court affirms Arctic, Atlantic leasing bans

A U.S. federal appeals court has confirmed bans on offshore oil leasing in most federal Arctic waters in the Atlantic which Trump attempted to open for development.

The ban on offshore oil leasing in Arctic waters goes back to a decision made by former U.S. President Barack Obama in 2016 when he withdrew millions of acres in the Arctic and the Atlantic Ocean from future oil and gas activity.

The ban meant that 3.8 million acres in the north and mid-Atlantic Ocean off the U.S. East Coast and 115 million acres in the U.S. Arctic Ocean was made unavailable for oil and gas companies.

Including previous presidential withdrawals, the action makes nearly 125 million acres in the offshore Arctic unavailable for oil and gas exploration.

This was done during President Obama’s final days in office. When Donald Trump took office, his administration pressed for oil-and-gas development throughout the United States.

In April 2017, Trump issued Executive Order 13795 which aimed to revoke the ban made by Obama and open up oil leasing in the Chukchi Sea, in protected areas of the Beaufort Sea and protected areas of the Atlantic. Trump’s executive order was deemed illegal and invalid by a federal judge in Alaska in spring 2019. The Trump administration, backed by the state of Alaska and oil industry groups, appealed the decision.

According to an article by Reuters, the appeals court judges stated in their decision that the Biden administration’s restored no-lease protections removed the grounds for the appeal.

“The court ruling ends a legal effort to resurrect a plan from early in Trump’s administration for certain offshore areas that had been protected”, the media outlet stated.

The 9th Circuit Court of Appeals said President Joe Biden’s reinstatement of Obama-era protections makes moot the previous administration’s attempts to allow oil development there. President Biden also put a stop to federal oil and gas leasing indefinitely.

According to the court, with the executive order no longer in effect, the areas that had been subject to possible development “will be withdrawn from exploration and development activities regardless of the outcome of these appeals”.  

It is worth stating that the oil development in federal Arctic waters has also been limited by high costs, environmental and regulatory complications, and forbidding conditions.

The last Arctic offshore lease happened in 2008 and supermajor Shell spent $2.1 billion to acquire leases. The company ended up abandoning its Arctic exploration program in 2015 after not finding enough oil and gas deposits in the Burger J well located in the Chukchi Sea, some 150 miles off Barrow.