Tuesday, May 2, 2017

Trump’s Order on Offshore Drilling

 

Russian Minister of Natural Resources comments on US President Donald Trump's recent executive order.

Russia's Arctic Trefoil military base
© PHOTO: VADIM SAVITSKY/RUSSIAN DEFENSE MINISTRY
MOSCOW (Sputnik) — US President Donald Trump's recent executive order, which is aimed at reopening Arctic waters to oil and gas drilling, indicates not only "the end of shale era," but also that the focus of the US administration has moved toward oil production in the Northern region, Russian Minister of Natural Resources Sergei Donskoi said Tuesday.
On Friday, Trump signed an executive order that directs the Department of Interior to conduct a review of the existing five-year program for oil and gas development for the US Outer Continental Shelfб which was approved in the final days of former US President Barack Obama's administration.
“The end of shale era. On April 28, Trump signed a new five-year program of licensing the US continental shelf in the waters of Alaska, Middle and South Atlantic, in the Mexican Gulf. It means that the new administration is focusing on the offshore production, despite a significantly higher volume of expenditure in comparison to the projects of oil shale drilling,” Donskoi wrote on his Facebook.
The shift in the administration's policy explains why Washington is trying to block Russia’s offshore projects, the Russian minister continued while referring to US Treasury Department's recent refusal to issue waivers to authorize drilling, prohibited by the US sanctions against Russia, to US companies. One such company is Exxon Mobil, which happens to be part of a joint project with Russian oil giant Rosneft, Donskoi said.
“Currently the US continental shelf provides 18 percent of oil production and 4 percent of natural gas production, while only 26,000 square miles of overall 2,7 million are licensed for drilling,” Donskoi added.
The issue of extending offshore drilling has long been controversial in the United States due to numerous environmental concerns. In December 2016, Obama banned oil and gas drilling off the northern shores of Alaska in both the Chukchi and Beaufort seas, as well as along the East Coast of the United States. One month later, Ryan Zinke, who was a nominee for US Interior Secretary at that time, said the new administration should revise Obama's regulations on new gas or oil drilling in the Arctic and Atlantic Ocean.
In April, according to media reports, Exxon Mobil reapplied to the US Department of the Treasury for a waiver from US sanctions on Russia to resume its business with Rosneft. Exxon has been seeking to return to its projects with the Russian company since 2015, but efforts for cooperation were blocked by the former US administration.

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