Politics took center stage on two fronts this week. First, following last week’s move by the Trump administration to reopen 98% of the Outer Continental Shelf for offshore drilling, the Interior Department reversed course this week, at least as far as offshore Florida is concerned. At the urging of Florida Gov. Rick Scott, Interior Secretary Ryan Zinke removed the state from the proposal citing the need to consider Florida’s unique needs. That left governors from other states wondering how they too could be removed. Governors from Delaware, North Carolina and South Carolina sought meetings with Zinke to press their cases that drilling would pose risks to coastal tourism. And, New York Governor Andrew Cuomo took to Twitter to express his disapproval.
Regardless of where industry is allowed to drill, analysts say don’t expect a rush to jump on the available leases. Hart Energy’s Senior Editor Velda Addison spoke to several analysts who pointed to factors that will most likely slow response by the industry including old seismic data, technical and geological risk and, of course, the ongoing lower for longer price environment. We all know, offshore drilling is not cheap.
Meanwhile, New York became the latest city to file a lawsuit against five oil majors over climate change. The same five companies are already fighting similar cases in California. In a court filing this week, ExxonMobil described those actions as “abusive law enforcement tactics and litigation.” The company said the suits were attempting to stifle its right to participate in the national dialogue about climate change and climate policy. Shell said, in part, climate change is a complex societal challenge, and should be addressed by policy and not the courts.
And are there dark clouds forming over U.S. natural gas pipeline exports to Mexico? Hart Energy Senior Editor Joe Markman reports that a recent Mizuho Securities research note expressed concern about a Platts estimate that as many as nine pipeline project delays could force 2018 exports to remain at the current level. But don’t fear. Mizuho’s Timothy Rezvan told Hart Energy Mexico is committed to U.S. natural gas, just not as quickly as had been hoped.