Should the Trump Administration Get to Play Politics with Offshore Federal Oil and Gas Resources?

How should state and federal governments make decisions concerning offshore federal resources the development of which may affect nearby states? Two approaches: one, give the Trump administration a huge political negotiating chip, with which it can reward friendly politicians, or two, a transparent system that seeks to treat all U.S. citizens fairly.

Pick one.

Last week the Secretary of the Interior Ryan Zilke announced a revised National Outer Continental Shelf Oil and Gas Leasing Program (National OCS Program):

[The revised Program would] make over 90 percent of the total OCS acreage and more than 98 percent of undiscovered, technically recoverable oil and gas resources in federal offshore areas available to consider for future exploration and development. By comparison, the current program puts 94 percent of the OCS off limits. In addition, the program proposes the largest number of lease sales in U.S. history.

“Responsibly developing our energy resources on the Outer Continental Shelf in a safe and well-regulated way is important to our economy and energy security, and it provides billions of dollars to fund the conservation of our coastlines, public lands and parks,” said Secretary Zinke. “Today’s announcement lays out the options that are on the table and starts a lengthy and robust public comment period. … The important thing is we strike the right balance to protect our coasts and people while still powering America and achieving American Energy Dominance”

Some details here. Of course some folks are alarmed that the Trump administration would undertake review of actions taken by the Obama administration (actions taken by the previous administration “for good reasons,” the New York Times editorial board assures us).

The Los Angeles Times news report warned the Trump administration was “inviting a political backlash,” and it was not long in coming. Senators and governors from Atlantic and Pacific coasts rushed to tweet, speak, propound, and declare: “Of course I oppose drilling off of [insert state name]’s coastline.”

Then, a few days after the announcement, Retreat! 

From Reuters:

President Donald Trump’s administration will not allow drilling for oil and gas off the coast of Florida after urging from the state’s governor, Interior Secretary Ryan Zinke said on Tuesday.

“I support the governor’s position that Florida is unique and its coasts are heavily reliant on tourism as an economic driver,” Zinke said in a statement. “As a result of discussion with Governor (Rick) Scott and his leadership, I am removing Florida from consideration for any new oil and gas platforms.”

You know which other coastal states are “heavily reliant on tourism”? Yep. All of them, just ask the governors, senators, and any other coastal state political official.

When federal oil and gas resources are developed offshore, a bit more than a third of the money goes to affected nearby state and county governments, another bit goes to the federal Land and Water Conservation Fund, and the remainder goes directly to the federal treasury. When Florida gets a political veto, federal resources are withheld from potential development at a cost to the federal treasury.

Which raises questions about fairness. The federal resources are, in Sec. Zilke’s words, “our energy resources.” If Florida (or California, or Maine, or New Hampshire, etc., etc.) want to withhold federal resources from development, ought not the federal citizenry be compensated? Surely the state of Florida would be willing to pay a few million per year to hold federal oil and gas lease rights out of development.

Overall in 2016 about $2.7 billion in revenue went to the federal government from offshore oil and gas leasing. Granted, just a splash in a U.S. budget pool of around $4 trillion. A few million dollars coming from Florida and other states wishing to block federal resource development would be the slightest of froth on that splash.

But consider the typical citizen in Portland, Oregon or Portland, Maine or somewhere in between. They see a bit of money flowing into federal coffers from development of offshore federal resources in the Gulf and a few other small patches east and west (and more from onshore development of federal resources), but not an extra dime from Florida’s tourist industry. Not a dime extra, even though the Florida industry apparently depends upon blocking income from federal oil and gas resources.

A Washington Post analysis: “Why is offshore drilling again banned in Florida? Well, it’s a red state.” The Hill reported former White House ethics chief Walter Shaub’s tweet suggesting the political favoritism for the homestate of Trump’s Mar-a-Lago house showed the country is headed in the direction of a “banana republic.”

When federal resources can be a tool for one administration to reward its political allies, they can be a tool for the next administration to reward its political allies. But rather than letting federal offshore resources be a political pie to share with “friends” after backroom negotiations, why not an open, public process?

Auction off the rights and let Florida’s tourist industry bid! Even a fee negotiated between the state and federal governments would be preferred. Let’s have a transparent system for states to withhold federal resources from development and reduce the ability of the White House and the Department of Interior to play politics with “our energy resources.”

MORE federal oil and gas leasing coverage.

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One thought on “Should the Trump Administration Get to Play Politics with Offshore Federal Oil and Gas Resources?

  1. I think that any state that will not allow drilling should be forbidden from importing petroleum. Let them freeze in the dark.

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