Trump offshore plan tests oil execs' risk tolerance — and 2028 fault lines
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If you lease it, will they come? Oil companies could soon(ish) start answering that question under President Trump's new plan for offshore drilling lease auctions.
Why it matters: The Interior Department proposal envisions vast expansion in federal waters beyond the Gulf of America (renamed from Gulf of Mexico), where almost all action occurs today.
- The 2026-2031 draft unveiled on Thursday has sales up and down California's coast, Alaska's Arctic seas and other shores, and closer to Florida, in addition to current hubs.
Catch up quick: Lease sales off Alaska would start next year, with California auctions starting in 2027 and eastern Gulf bidding in 2029.
- It also offers lots of tracts in the western and central Gulf, where drilling and production are already common.
A few things on our radar...
🍔 Industry's uncertain Alaskan appetite. Oil groups applauded the plan, and they're certainly psyched for more Gulf sales after Biden-era reticence.
- But interest in remote, costly, and controversial projects off Alaska is a big question mark.
- It'll depend how companies with the money and know-how to operate there see future prices and demand. Also in the mix: risks that a future White House won't be supportive of these years-long projects.
🗳️ The high-energy politics. It's a new collision between Trump officials and California Gov. Gavin Newsom (D), who's weighing a 2028 run.
- Newsom, California AG Rob Bonta, and the state's senators pledged to fight the plan. So did environmental groups.
- Waters off California's southern coast were once an industry hot spot. There's still some legacy production there.
- It's also an intra-GOP fight, with Florida Gov. Ron DeSantis (R) criticizing Interior's proposal via aides.
What we're watching: Potential changes to the plan — and court battles once it's final.
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