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Obama Blocks Further Arctic Drilling

Obama Blocks Further Arctic Drilling

The Obama administration recently reported that they would be blocking all new oil drilling in the Arctic. A total of two potential lease auctions in Beaufort and Chukchi were both canceled by the Interior Department, and all requests by companies within the Arctic region to renew their existing leases have been refused. While leasing is theoretically still open, the new lease conditions that have been enacted make it nearly impossible.

The Obama Administration and the Arctic

Environmental critics have been encouraging the Obama Administration to cease Arctic drilling for some time. President Obama was criticized earlier this year for approving Shell’s Arctic permits, despite the nation’s long-term energy goals. At the time, the President had rightfully pointed out that the administration could not and would not prevent oil exploration throughout the Arctic. The administration’s stance at this time was that the Arctic would be carefully managed but that exploratory drilling would still continue.

Though environmental concerns have been loudest, the Obama administration actually cited industry concerns regarding the blocking of new oil drilling. The administration stated that “current market conditions and low industry interest” had inclined them towards suspending these leases. Indications suggest that the Obama administration may be concerned that auctioning off leases at this time would not be profitable or fruitful, as there has been no interest towards them. However, this would not explain why extant leases are failing to be renewed. Of this, the Interior Department stated, “The companies did not demonstrate a reasonable schedule of work for exploration and development under the leases.”

Consequences for Arctic Drilling and the Oil Industry


The importance of the Arctic as an oil resource cannot be underestimated. The Arctic potentially holds up to 13% of the as-yet-undiscovered oil reserves in the world. Additional Arctic drilling meant additional oil for the country. Additional oil leads to lower oil prices, decreased dependency on foreign oil, and an improved economy. Climate change has made oil more accessible throughout the Arctic region and a stall in Arctic drilling does not reduce this climate change, it only makes it impossible to take advantage of the environmental and unavoidable consequences of climate change.

The megalith company Shell had already moved away from drilling in the Arctic, despite an investment of nearly $7 billion in the region. Shell was unable to continue drilling in the area both due to disappointing yields and the increased regulations within the area. It is not known if the company would have continued to pursue drilling in the area if these regulatory concerns were not in place, but it is likely; regulatory issues have vastly increased the costs related to drilling within the Arctic. By stalling exploratory drilling in the area, it becomes more likely that oil resources will not be available when they are needed.

The blocking of drilling throughout the Arctic by the Obama administration appears to be an attempt to end drilling in the region through a multi-pronged attempt. New leases are not being sold because of a lack of interest, while old leases are not being renewed because of a lack of adherence to regulatory standards. The end result is that Arctic drilling may entirely cease to be… a situation that could be incredibly hurtful to the economy and to the country’s long-term energy goals.