The White House executive order to free up more of America’s offshore economic zone for oil and gas drilling may have about as much effect against market forces as Donald Trump’s continuing rhetoric about making coal great again.
Last month, Trump signed an executive order intended to reopen 120 million acres of Arctic and Atlantic Ocean waters that President Barack Obama had sought to permanently protect. But opening the areas doesn’t mean the industry will necessarily rush in, the Houston Chronicle reports.
Industry interest even in the relatively sheltered Gulf of Mexico deepwater basin—to say nothing of truly hostile and expensive operating environments such as the Arctic—has sunk almost without a trace in the last three years, the Chronicle reports, citing data from the International Energy Agency. “The energy industry’s search for deep-sea pools of oil has almost completely stalled in the energy slump,” the paper notes.
Global investment in “frontier ventures” tumbled by two thirds between 2013 and 2016, from US$94 billion to $34 billion. Only 13% of new exploration greenlit in 2016 was offshore, less than half the average of the previous 15 years. The IEA, the Chronicle adds, “believes exploration spending will sink lower this year, to half of its 2014 level.”
In the American portion of the Gulf of Mexico, the 80 exploration wells drilled last year were down a third from the number in 2012, while deepwater development wells that actually deliver oil for sale declined 80%.