Late Friday afternoon, a time particularly convenient for the announcement of unpopular decisions, the Department of the Interior announced it would cancel oil and gas lease sales in the Arctic and not renew existing leases to Shell or Statoil. The move effectively closes the door to oil and gas exploration in these resource-rich areas.
The immediate sting comes from broken promises, as the Administration has done a full 180 on its prior commitment to develop oil and gas on American soil. But the longer-term pain may come from the stifling impact these new barriers will have on innovation.
The Administration made development of Shell’s existing lease as difficult as humanly possible, and Shell stepped up and was able to drill its wells while keeping the environment safe. The new technologies, processes and techniques developed during the Arctic exploration will be used throughout Shell’s operations around the world to make those wells safer.
That’s how innovation happens: you have to do it and learn from it. Yet, today, it became clear that the Administration would prefer oil and gas exploration not be done at all. It’s become an all-too-familiar theme across energy-producing sectors. And it’s the wrong decision every time.
Friday’s announcement spells danger for development promised by the President off the Atlantic coast and for the 2017-22 leasing plan. It could signal trouble for energy export terminals and that still-yet-to-be-approved pipeline from Canada to the United States you may have heard about once or twice.
Manufacturers hope this Administration or a future one will come to see the error made today and reverse course. And we continue to call on this Administration to remove barriers to the development of energy, instead of erecting new ones.