Trump Has a Plan to Preserve Benefits for Oil Drillers in Future
(Bloomberg) -- A top Interior Department official told oil industry leaders the Trump administration is seeking to sign contracts leasing new coastal waters for oil drilling under favorable terms that will be difficult for future presidents to revoke or rewrite.
Joe Balash, the assistant secretary for land and minerals management, outlined that approach to oil industry leaders attending an International Association of Geophysical Contractors conference in Houston last month, according to audio obtained by Bloomberg News.
“When it comes to our specific royalty terms -- anything that’s under contract -- we still enjoy the sanctity of contracts in this country and I expect that’s going to last for some time,” Balash told the IAGC conference. “So getting our leases out -- and out on terms that are competitive and have the ability to sustain the long life of a property once it goes into production -- is also key.”
The Interior Department is already developing a new five-year plan of offshore oil and gas leases that could give energy companies opportunities to vie for virgin territory in the Atlantic, Pacific and Arctic oceans. But at the conference, Balash was pressed to describe how the Interior Department also is pursuing policy changes that would make the U.S. more attractive to oil companies eyeing cheaper prospects in South America -- and ensure they will endure whenever a new president enters the White House.
That could include lowering royalty rates that energy companies pay the U.S. government on any oil and gas extracted from federal waters. An Interior Department advisory committee has recommended slashing royalty rates for offshore oil and gas production, but so far, the Trump administration has not followed the advice.
Leases set terms for royalty payments that can govern oil production at some offshore sites for decades to come.
Balash also stressed the importance of taking “advantage of the opportunities to open up some of our own areas that have not yet been fully explored” and signaled those areas included the Atlantic Ocean, where the government has given geophysical companies initial authorizations to conduct seismic surveys designed to help seek out potential oil and gas reserves. At least some of those firms were present at the IAGC conference, according to meeting documents.
Representatives of the Interior Department did not immediately respond to an email seeking comment.
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