Will Obama’s offshore ban get the cold shoulder?

Malcolm Latarche
Malcolm Latarche

21 December 2016


It may seem ironic that with 2017 being the year when the IMO Polar Code comes into effect for new ships, some of the perceived need for the regulation may well disappear. This week, Canada and the US have both put in place bans on oil and gas exploration in the Arctic. The Canadian ban is a temporary one for five years but President Obama is apparently using a section of the 1953 Outer Continental Shelf Lands Act to place a permanent ban on future leasing for oil and gas exploration. The latter flies in the face of President-Elect Trumps intent to open up more US government land for energy exploitation and the policies of the Alaskan state government which relies on oil income. President Obama will not be able to amend the act in the remaining time he has in office and in any case it is doubtful that any attempt to do so would get the support of the US senate and congress so he will be obliged to rely on issuing an Executive Order which recent history shows is his preferred method for by-passing the US law making process. It would seem that while the idea has the support of environmentalists, the incoming president could just as easily issue his own Executive Order and overturn the ban. Although traditionally this is not done, Trump has shown that he is not bound by tradition and in any case with a Republican controlled senate and congress there is not likely to be any opposition. The Republican party’s majority is not sufficient to overrule any Obama Executive Order but the opposition is in a worse place regarding President Trump. The argument and indeed the ban itself is presently somewhat academic because the low oil price is a strong disincentive to invest money in Arctic exploration and exploitation. Still it is hard to see Russia or even Norway taking similar actions even though the cost/oil price dilemma affects them also. Although environmental groups may be celebrating, it should not go unnoticed that the Canadian and US governments also said they are launching processes to identify sustainable shipping lanes throughout Arctic waters, including the Beaufort and Chukchi Seas. Potentially this could be more of a problem because it might open up the area to commercial shipping and which despite the Polar Code has the potential for more environmental impact.