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Bans on Offshore Drilling: Will It Affect The Oil And Gas Industry?

Bans on Offshore Drilling: Will It Affect The Oil And Gas Industry?

Environmentalists and conservation groups are hailing the decisions made by the United States and Canada the bans on offshore drilling for oil and gas off the coasts of the Arctic and Atlantic Ocean.

However, critics claim the move is damaging for the oil and gas industry, and the United States’ national security depends on its ability to produce reserves on home ground.

Here, looks at the bold impact this change will have on the energy industry and what it means for the environment.

President Obama used the Outer Continental Shelf Lands Act to protect large portions of the Chukchi and Beaufort seas and underwater canyons in the Atlantic, while Canadian Prime Minister Justin Trudeau made similar steps to shield large areas of Arctic waters from drilling.

Although existing drilling sites are unaffected by the ban, oil companies will be unable to tap into new sources of natural resources in the areas.

The White House has justified the controversial step by stating that “the risks of an oil spill in this region are significant and our ability to clean up from a spill in the region’s harsh conditions is limited.”

The Beaufort and Chukchi seas are “habitat for several species listed as endangered” and are widely recognized as “major biodiversity hotspots that are critical to fisheries.”

The American Petroleum Institute (API) has publicly denounced the decision, stating that it “ignores congressional intent, our national security, and vital, good-paying job opportunities for our shipyards, unions, and businesses of all types across the country.”

The API says that this proposal would take America in the wrong direction just as it has become “world leader in production and refining of oil and natural gas and in reduction of carbon emissions.”

However, it’s not all doom and gloom. Investments in refining other types of energy solutions are rapidly increasing as companies move away from the costly mining of oil and gas reserves.

The United States is the world’s largest producer of nuclear power, accounting for more than 30 percent of the nuclear generation of electricity globally, and is set to expand over the coming years.

Liquefied natural gas (LNG) production has surged in the United States, and with the increased need for LNG around the globe exports are set to rise.

As the world moves closer to adopting a low-carbon economy, more cost-effective and environmentally-friendly technologies are being developed to increase the clean energy market.

What’s more, the resurrection of the coal sector is thanks to new technologies that reduce carbon emissions and decrease carbon footprint, making this a viable new (but old) energy source.

According to the Washington Post, oil produced in the Arctic represents a “tenth of one percent of America’s oil production” and the area is so sensitive and remote that the “economics of exploration is costly” – therefore, will it really be missed?

As the development of other forms of energy supplies increase and advanced technologies are being designed to source, mine and produce reserves, it would appear the United States of America is in a good position to lead the global energy industry in 2017 and beyond.

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