In the final weeks of his presidency, President Joe Biden is poised to issue a landmark executive order permanently banning new offshore oil and gas development in select U.S. coastal waters, according to an exclusive Bloomberg report. This decisive action is likely to restrict the sale of new drilling rights in certain portions of the U.S.’s outer continental shelf. Furthermore, this executive order would lock in protections that are difficult to reverse, complicating President-elect Donald Trump’s agenda to expand domestic energy production.
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Why Is President Biden Considering this Landmark Order?
The announcement, expected within a few days, reflects years of lobbying by congressional Democrats and environmental groups. These environmental groups have argued that such a move is essential to shield coastal communities, safeguard marine ecosystems from oil spills, and combat climate change. Biden’s administration has intensified efforts to finalize these protections since Trump’s election, aiming to emphasize his environmental legacy. This includes measures such as protecting Nevada’s Ruby Mountains from industrial mining and energy development by preventing the sale of new oil, gas and geothermal leases.
What Would Biden’s Offshore Protections Entail?
While the exact scope of the protections remains unclear, they are likely to include areas deemed vital for coastal resilience, such as parts of the Pacific near California and the eastern Gulf of Mexico by Florida. The order won’t affect existing leases, but it draws on the 1953 Outer Continental Shelf Lands Act, which allows presidents to permanently protect waters without explicitly granting their successors the authority to undo those safeguards. Trump is expected to try and reverse this order, but similar efforts during his first term were blocked by the courts.
Why Is Offshore Drilling a Contentious Issue?
Offshore drilling remains a politically contentious issue. Although Republicans typically support it, a Pew Research survey from last year revealed less than 50% of Americans favor expanding it. Meanwhile, industry advocates warn against such restrictions, citing global reliance on fossil fuels. However, leaders from both parties in the coastal states of the U.S., have warned about the economic impact of oil spills on tourism-dependent economies in these regions.
What Is the Best Oil Stock to Buy Right Now?
For investors interested in investing in the oil sector, we have rounded up the best stock in the oil and gas sector that analysts are bullish or cautiously optimistic about, using the TipRanks Stock Comparison tool. From this list, it appears that analysts are bullish about Chevron (CVX), ConocoPhillips (COP) and SLB (SLB).
