August 27, 2020 Read More →

Trump wants Arctic drilling but oil companies not so sure

Sierra:

In mid-August, the Trump administration finalized its plan to auction leases for oil and gas development in the Arctic National Wildlife Refuge, a remote tundra wilderness on Alaska’s North Slope. Secretary of the Interior David Bernhardt, a former oil and gas lobbyist, suggested that auctions could take place by the end of this year, praising the move as a boost for jobs and a step towards greater energy independence for the country.  

But the administration’s announcement comes at a tumultuous time for the oil and gas industry. As such, it remains unclear whether oil companies will purchase the leases, let alone whether such a step would create jobs. Given the unfavorable economy, an upcoming election, and the inevitable lawsuits from Indigenous and environmental groups, the future of the Arctic Refuge is far from certain.

How oil and gas companies are responding to this new reality varies greatly. According to Kathy Hipple, a financial analyst at the Institute for Energy Economics and Financial Analysis and a professor at Bard College, oil executives at major companies make decisions about exploration and development based on long-term forecasts—sometimes decades out. “We see that the oil companies are starting to diverge on where they view peak oil demand,” says Hipple. “Some of the companies such as Exxon are saying, as recently as its second-quarter earnings call, nothing has fundamentally changed. Whereas BP has said, ‘Things have fundamentally changed; we are radically rethinking our business.’” 

[Jacob Shea]

More: The Trump Administration Wants to Drill in the Arctic. Do Oil Companies?

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