With major cities and states issuing stay-at-home orders as coronavirus cases have swept throughout the United States, the Trump Administration opened the floodgates for more offshore drilling and issued a permit for a long contested gas export project.
On March 18, the Bureau of Ocean Energy Management (BOEM) held a lease sale for 397,285 acres of federal waters in the Gulf of Mexico that attracted bids by companies such as BP, Chevron, Shell, Total, BHP Billiton and a slew of smaller independent drillers. A day later, the Federal Energy Regulatory Commission (FERC) handed a permit to the long-embattled Jordan Cove LNG export facility, located in Coos Bay, Oregon.
The permits came as the administration considers handing a multi-billion dollar bailout to the oil and gas industry, whose financial problems long preexist the nascent economy-wide recession set into motion by COVID-19. Climate advocates have criticized the moves made by the Trump Administration.
Oil Change International, which published a 2018 report concluding that Jordan Cove LNG, and its Pacific Connector feeder pipeline, could release between 36.8 and 52 million metric tons of greenhouse gas emissions annually, slammed the FERC decision.
“The Jordan Cove LNG project would be a climate disaster, responsible for at least 36 million tons of greenhouse gas emissions — more emissions than any other source in the state of Oregon if it were to be built,” Lorne Stockman, Senior Research Analyst with the group Oil Change International, said in a press release. “Governor Brown should do whatever she can to block this inappropriate action by the federal government and keep this project from ever being built.”
Oregon Governor Kate Brown, in turn, expressed strong concerns about Jordan Cove and Pacific Connector getting such a permit in the midst of an international pandemic. The pipeline and LNG terminal have yet to receive any of the permits needed from Oregon's regulatory agencies and it appears it could be awhile, if ever, that they get them.
“Given a national and state emergency, in which the federal government and its agencies are unable to fulfill their basic responsibility to keep citizens safe, it is stunning that the FERC moved forward on this decision today, approving the Jordan Cove project and Pacific Connector Gas Pipeline,” Brown said in a press release. “I want to reiterate that I will not stand for any attempt to ignore Oregon’s authority to protect public safety, health, and the environment. I have asked the state’s lawyers to consider all appropriate legal action to assure that Oregon permitting processes will be followed.”
Brown added that the company, despite getting a federal permit, does not have state authority to seize land or privately-owned property.
“I will use every available tool to prevent the company from taking early action on condemning private property or clearing land,” said Brown.
The project was listed on the Federal Permitting Improvement Steering Council's Permitting Dashboard for federal infrastructure projects. A dashboard created during the Barack Obama presidency, it exists to fast-track the federal permitting process and its creation was lobbied for by the fossil fuel industry, U.S. Chamber of Commerce and hundreds of companies and trade associations.
Alexander Herrgott, Executive Director for the Federal Permitting Improvement Steering Council, formerly worked as a staffer for the climate-science-denying U.S. Sen. James Inhofe (R-OK) and as a lobbyist for the Chamber of Commerce.
The BOEM lease sale included 22 companies and 71 different tracts of land.
“The development of oil and gas assets in the Gulf of Mexico is a highlight of the Outer Continental Shelf,” Mike Celata, BOEM’s Gulf of Mexico Office Regional Director, said in a press release. “The continued presence of large deposits of hydrocarbons in the region will draw the interest of industry for decades to come.”
The offshore drilling industry lobbying group, National Ocean Industries Association, cautiously touted the BOEM lease.
“Today’s Gulf of Mexico oil and natural gas lease sale shows how important long-term offshore energy production is,” the group said in a press release. “While bidding did take a tough hit, it could have been substantially worse due to the unprecedented near-term financial constraints created by the COVID-19 virus and the oil price war between Saudi Arabia and Russia.”
Image Credit: U.S. Bureau of Ocean Energy Management
According to BOEM bidding data, BP won the most bids at 16, while Chevron spent the most on high bids at $24.6 million.
Shell, which has recently rebranded as a climate-friendly company by leaving the American Fuel & Petrochemical Manufacturers (AFPM) lobbying group, walked away as the third-highest spender on high bids at $18.4 million. The company was also the third biggest bid winner at seven plots. BP recently left both AFPM and Western States Petroleum Association on similar grounds.
Image Credit: U.S. Bureau of Ocean Energy Management
Megan Milliken Biven, who worked as a program analyst for BOEM from 2010-2018, said she found the lease sale “not surprising” because it is required statutorily under the Outer Continental Shelf Lands Act, which mandates regular lease sales of the sort. The only cure for ending such lease sales, she added, requires congressional action.
The Center on Western Priorities, which advocates for reform of the Department of Interior leasing program, has called for a temporary stoppage of leasing as the federal bureaucracy and Congress combat coronavirus.
“The Trump administration has already gone to extraordinary lengths to stifle and ignore public input to enact its drill everywhere agenda” Jesse Prentice-Dunn, the group's policy director, said in a press release. “Ramming through major policies while the country battles a global pandemic would only add to its legacy of corporate charity and environmental destruction.”
For now, though, the Trump Administration has indicated lease sales of the Gulf of Mexico offshore drilling variety and rulemaking of the Jordan Cove LNG sort will continue regardless of the global public health crisis. And the climate crisis, for that matter.
Indeed, on the same day as the Jordan Cove permit decision, the Bureau of Land Management announced that it would hold a bid for drilling on 95 parcels totaling over 45,000 acres for its May quarterly lease bidding round. The Department of Interior has already indicated that, after seeing the results of the BOEM bid, it may lower royalty rates for offshore drillers from the current rate of 18.75% to 12.5%.
“The coming weeks are going to be difficult as the full reality of social isolation set in. Many of us are anxious about what COVID-19 will mean for the safety of our family, our society, and ability to recover economically,” wrote Maria Caffrey, a former scientist for the National Park Service who left the agency after coming out as a whistleblower under the Trump Administration, now working for the Union of Concerned Scientists. “Unfortunately, we now have to add to this burden that we cannot rely on some of our government officials entrusted to protect our public lands and interests.”