President Obama rejects plans for offshore oil drilling on Atlantic coast of the US

 
Caitlin Morrison
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The US said it doesn't make sense to make lease sales in the Atlantic in the coming five years (Source: Getty)

The US government has decided to abandon plans to allow new offshore oil drilling on the south east coast of the US, citing local opposition, current market dynamics, and conflicts with competing commercial and military ocean uses.

The US Interior Department said in a statement today that it had "heard from many corners that now is not the time to offer oil and gas leasing off the Atlantic coast".

"When you factor in conflicts with national defense, economic activities such as fishing and tourism, and opposition from many local communities, it simply doesn’t make sense to move forward with any lease sales in the coming five years," said secretary of the interior Sally Jewell.

The news follows last week's announcement by President Barack Obama that the US will explore offshore opportunities in the Arctic.

Today's announcement was slammed by the American Petroleum Institute (API), which counts several oil and gas companies among its 650 members.

"“The decision appeases extremists who seek to stop oil and natural gas production which would increase the cost of energy for American consumers and close the door for years to creating new jobs, new investments and boosting energy security,” said API boss Jack Gerard. “This is not how you harness America’s economic and diplomatic potential.

"While benefiting from energy policy choices made more than a decade ago, this inconsistent policy leads to unravelling the nation's ability to be a global energy leader and has left the future of American energy and national security vulnerable for the geopolitical challenges that lie ahead."

Oil companies are feeling the pinch, with prices for the black stuff below $40 a barrel yesterday. Oil is trading about 70 per cent lower than it was in June 2014, due to concerns of over-supply and a failure by the world's biggest oil producers to cap output.

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