U.S. President Barack Obama, Canadian Prime Minister Justin Trudeau Announce Ban On Offshore Drilling

President Barack Obama has announced a plan that, according to Bloomberg, will ban “new offshore oil and gas drilling in more than 100 million acres of the U.S. Arctic and undersea canyons in the Atlantic Ocean …” The ban will not affect waters in the Pacific Ocean, in some parts of the Atlantic Ocean, or in the Gulf of Mexico. 

As part of the announcement, Canadian Prime Minister Justin Trudeau said he would freeze offshore drilling in the Artic. (Newfoundland and Labrador will not be affected by Trudeau’s new plan.) 

Bloomberg said there is “scant precedent” for such a sweeping move by a U.S. president and that the new policy “is sure to draw a legal challenge …” Indeed, MSCI’s partners at the U.S. Chamber of Commerce are considering whether to challenge the ban in federal court. If the Chamber opts to take that course, MSCI will support those efforts. President-elect Donald Trump also could reverse the ban. 

While Prime Minister Trudeau supports broader restrictions on offshore drilling, he has signaled that he wants to work with the incoming Trump administration to finally approve the Keystone XL Pipeline, which was previously rejected by the Obama White House. (Click here to read MSCI’s statement on that rejection.) At an event with oil industry executives, Trudeau said President-elect Trump had brought up the pipeline in a recent conversation. The prime minister told the oil industry gathering, “I will work with the new administration when it gets sworn in … I’m confident that the right decisions will be taken.” As Telesur TV pointed out, the pipeline is expected to carry 830,000 barrels of oil per day from Alberta to the U.S. Midwest.