Government report calls for hike in offshore drilling fees



Biden administration calls for hike in federal drilling fees in report that largely sidesteps climate issues

By Jim Heintz, CNN Washington Bureau

On the same day that a new report affirms that there will be less ice in the Arctic by the end of the century, a key Obama administration report says the United States can maintain economic growth and has more to gain from opening up new areas for oil and gas drilling, even as the federal government looks to increase licensing fees for the offshore industry.

The environmental report from the US Geological Survey, released Tuesday, calls climate change a threat to the U.S. economy. It said the polar ice cap will be free of a significant part of its major sea ice for the first time ever by the end of the century.

But as President Donald Trump prepares to announce the future of the Paris climate deal on Friday, a report from the Obama administration suggests his administration can maintain economic growth without jeopardizing states’ climate goals.

“Keeping our energy portfolio diverse and resilient means energy can play a major role in building a low-carbon future that’s good for our economy, climate, and environment,” Environmental Protection Agency administrator Scott Pruitt said in a statement.

“The report notes that the United States is fortunate to possess two, but not exclusive, world-class natural resources,” Pruitt added. “The American energy sector is among the most economically diverse the world has ever seen, an attractive commodity to foreign investors.”

The environment report said the U.S. must move away from coal and toward cleaner energy sources such as natural gas, but the federal government can impose drilling fees that it says could jump from about $7.00 per barrel to $200 per barrel.

The report said natural gas could be a bridge fuel to reducing emissions, while states that rely heavily on coal would be better served by embracing clean energy sources such as wind and solar. Natural gas, according to the report, can provide a “significant opportunity to reduce carbon emissions”.

The environment report cites the 2016 Clean Power Plan as a prime example of a federal program hindering states and municipalities from pursuing green initiatives. It says the rule needs to be repealed, partly due to the inflated fees, although states would be restricted from pursuing clean energy sources.

The report does not say states should seize coal, though it calls on the federal government to step in and offer support for coal-related facilities.

The report concludes with a call for policymakers to take a strong stand on climate change because “historically the reduction of greenhouse gas emissions has had a significant impact on economic growth, productivity, quality of life, and the competitiveness of U.S. products and services,” according to the report.

The report comes as the environment secretary prepares to exit and just days before Trump is expected to meet with British Prime Minister Theresa May, who is expected to discuss a post-Brexit exit agreement that requires a ramp up in British fossil fuel extraction.

The resource report offers a largely overlooked look at the economic impact of oil and gas drilling activities. But the report does not take on the question of whether or not oil and gas exploration should continue in areas where climate change poses a threat to human health and the environment.

This lack of critical research by the Obama administration could get worse in the Trump administration, who’s expected to take steps to slash environmental agencies under a 2017 executive order from former President Barack Obama.

Leave a Comment