Jim Armitage: Obama’s swipe at Big Oil will not stop the drillers

When Bill Clinton was handing over his White House to George “Dubya” Bush, his staff went out of their way to make life difficult for the new tenants, even removing the “W” keys from the office keyboards. Barack Obama seems to be doing the same for Donald Trump.

Last night, he used an archaic presidential right to declare it permanently illegal to drill for oil and gas in the US-owned Arctic and parts of the Atlantic Ocean.

While Obama justified his deployment of the obscure section 12 (a) of the 1953 Outer Continental Shelf Lands Act on environmental grounds, it’s clearly also a poke in the eye for the President-elect.

Trump has made it an electoral pledge to deregulate US oil, and hired the biggest oil baron in the country — Exxon chief executive Rex Tillerson — as his next secretary of state.

It’s not just Tillerson who’s been plucked from the oil world to serve: shale oil advocate Scott Pruitt is taking over the Environmental Protection Agency, oil and gas consultant Ryan Zinke is to head up the interior department, and Rick Perry, former Texas governor and climate change sceptic, is to run the Energy Department, which he once pledged to abolish.

Big Oil is cock-a-hoop. Obama’s administration made itself a major nuisance to the energy industry, imposing a welter of rules making life harder for oil drillers both on and offshore.

Unsurprisingly, the oil industry spent today howling and decrying his last-ditch, Commie measures as a grave and unforgivable assault on US energy security and jobs. Doubtless, they and the new government will fight for years to overturn them. Doubtless they’ll eventually succeed.

But in the meantime, are the curbs really that meaningful? Well, no. They only ban future licences, so sites already being explored by BP, Repsol and Exxon in the Atlantic can carry on, and the Gulf of Mexico is unaffected.

As for the Arctic, in the US Chukchi Sea, only one licence has ever been granted — to Shell, which abandoned drilling last year after massive costs, disappointing results and environmental concerns. While there may be more action in the Beaufort Sea, at $50 a barrel, there has been no clamour for new drilling rights in this most expensive and inhospitable territory.

For the foreseeable future, Big Oil is only interested in guaranteed winners already discovered by small explorers (for whom the Arctic will never be economic) or onshore in the US. Fracking in Montana can be done cheaply and profitably even at today’s energy prices. Trump and his crew will make hay in deregulating those industries, and Obama is powerless to stop him.