Energy industry expected to zero in on Gulf as Trump expands offshore drilling

The energy industry is expected to target the eastern Gulf of Mexico as the Trump administration plans to open almost all federal waters to oil and natural gas drilling.

“Of all the areas, the eastern Gulf of Mexico is the crown jewel,” said William Turner, a senior research analyst at energy consultant Wood Mackenzie. “It would gather the most interest because it seems it has the least amount of political risk, and technically, it is an area the industry knows, the way the waters behave, what geology is expected.”

The government currently has a moratorium on offshore drilling in the eastern Gulf until June 30, 2022, imposed partly because the Pentagon worries oil development would interfere with military testing and training in the area.

Oil and gas production in the Gulf of Mexico, which accounts for almost all current U.S. offshore production, is expected to hit a record high in 2018, after suffering three years of losses. Opening up areas east toward the coast of Florida would offer companies strong prospects for oil and gas and easy connections to existing infrastructure.

“There is more applicable data in the Gulf than anywhere else, which reduces the risk significantly,” said Christopher Guith, senior vice president of the Global Energy Institute at the U.S. Chamber of Commerce.