The Obama administration will not move forward with proposed oil and gas drilling in the Atlantic off the US East Coast. US secretary of the interior Sally Jewell made the announcement on March 15. The move to deny leases means that 104 million acres off the coasts of Virginia, North Carolina, South Carolina and Georgia are effectively closed to oil and gas drilling. The news about Atlantic drilling comes after the administration shut down Arctic drilling last year.
Obama’s decision makes sense for a number of reasons, chief among them is climate change. Given what we know about carbon budgets it makes no sense to expand fossil fuel extraction. To achieve the required level of GHG reductions we need to radically curtail our use of oil and gas. We already have far more fossil fuels than can be safely burned. In this context looking for new sources hydrocarbons makes no sense.
Any assessment of Atlantic Drilling must also be weighed against potential risks. Such operations must be examined in the context of BP’s massive oil spill in the Gulf of Mexico in 2010. The sinking of the Deepwater Horizon and subsequent months long oil spill was an unmitigated disaster from which the area has yet to recover.
Exxon’s criminal malfeasance and the subterfuge that permeates the entire industry has pushed the public’s perception of the fossil fuel industry to an all time low.
In February Hilary Clinton formally came out against Atlantic drilling. This tack to the left was meant to help her keep pace with her Democrat opponent Benie Sanders, but it was also in response to growing interest in climate action and waning support for the fossil fuel industry.
There are also economic reasons why it makes no sense to drill in the Atlantic. The low price of oil cuts into the smaller margins of complicated and expensive offshore drilling. In the longer terms investing a commodity that is destined to be worthless amounts to a ponzi scheme or a pyramid scam. We know beyond a shadow of a doubt that the music is going to stop and a lot of investors are going to get left out in the cold.