Apr 26, 2019

Trump's big chill on offshore drilling

Photo: Win McNamee/Getty Images

President Trump's bid to vastly expand areas available for offshore drilling is on ice — a development rooted in politics, oil markets, and the legal hurdle of unwinding a predecessor's policies.

Driving the news: A judge's ruling in March upholding President Obama's ban on Arctic development has delayed the wider 2019–2024 U.S. offshore leasing plan, Interior Secretary David Bernhardt told the Wall Street Journal.

  • But, but, but: It's political, man! Bloomberg reported yesterday that the plan is delayed until after the 2020 elections amid bipartisan concern among Atlantic Coast politicians.
My thought bubbles

1. Bureaucracy is hard. Bernhardt told WSJ that completing the plan may wait until U.S. District Court Judge Sharon Gleason's decision goes through appeals.

  1. Her ruling thwarted Trump's executive order reversing an Obama-era move to permanently put vast Arctic regions off limits. She said Congress would need to do that.
  • It's the latest sign of the roadblocks inherent in making sure-to-be-litigated regulatory decisions, especially without new legislation.

2. Politics is hard. Expanding Lower 48 offshore drilling outside of the central and western Gulf of Mexico has long been a politically volatile idea.

  • "Administration officials are worried that the president and Republican leaders in the southeast U.S. would lose votes if they pushed forward with the plan to sell new drilling rights in the Atlantic, Arctic and Pacific oceans," Bloomberg's Jennifer Dlouhy reports.
  • Regional politics vary. There's also widespread opposition on the West Coast, while Alaska politicians back offshore development.

3. Markets aren't helping Trump here. The onshore shale boom of the last decade and modest prices have sapped the urgency around widening offshore leasing, especially in the Arctic.

  • Arctic seas are thought to hold massive hydrocarbon deposits, but projects in the harsh region would be complex and expensive. Companies have a wealth of other opportunities to pursue in the Lower 48. 
  • Sure, industry is keen to see offerings outside the western and central Gulf. But the whole thing just isn't the pressure cooker it was circa mid-2008, when oil and gasoline prices were vastly higher, the shale oil production surge hadn't started, and Congress let East and West Coast leasing bans lapse.

Flashback: Last year Interior floated expansive draft plans for offshore leasing in 2019–2024 that envisioned a huge expansion beyond the Gulf of Mexico.

  • It included areas off both coasts and Arctic waters off Alaska. Much of the eastern Gulf areas is under a congressional moratoria until 2022.
  • Draft offshore plans get scaled back en route to completion, but it was nonetheless a clear sign that Trump wants to provide the industry with much wider access.

Go deeper: Trump executive order on Arctic Ocean drilling unlawful, judge rules

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Democratic presidential candidate Sen. Elizabeth Warren at a rally in Nevada. Photo: Alex Wong/Getty Images

A group of women progressives who back Sen. Elizabeth Warren has formed Persist PAC, a super PAC airing pro-Warren ads starting Wednesday in an effort to boost her performance ahead of Saturday's crucial Nevada caucuses, a spokesman told Axios.

Why it matters: Warren has spoken adamantly against the influence of unlimited spending and dark money in politics. But these supporters have concluded that before Warren can reform the system, she must win under the rules that exist — and that whether she likes it or not, their uncoordinated help may be needed to keep her viable through this weekend's contest and into South Carolina and Super Tuesday.

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John Rood. Photo: Mark Wilson/Getty Images

John Rood, the Pentagon's top policy official, will resign from his post on Feb. 28, CNN first reported and President Trump confirmed.

The state of play: CNN said Rood "was perceived as not embracing some of the changes in policy the White House and senior Pentagon officials wanted," such as peace talks in Afghanistan with the Taliban and a decision to cut back on military exercises with South Korea as the president courted North Korea's Kim Jong-un.

Coronavirus cases rise, as warnings of global pandemic grow

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

We may be "at the brink" of a global pandemic, warns a top U.S. public health official, as cases continue to spread despite containment efforts. Meanwhile, the global economy is being affected, including the tech manufacturing industry.

The big picture: COVID-19 has now killed more than 2,000 people and infected over 75,000 others, mostly in mainland China, where the National Health Commission announced 136 new deaths since Tuesday.

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