The Oil and Gas Industry Isn’t Sold on Trump’s Offshore Drilling Push

The Trump administration is looking to expand offshore oil and gas drilling. It’s finding that may not be so easy.

Oil companies had a lackluster response this month to the Trump administration’s announcement that it would invest in Venezuela’s oil resources. But the hesitation isn’t just about betting big in another country — it’s also evident around the administration’s new domestic push to expand offshore drilling.

“It would be conceivable that companies don’t bid because of all the aboveground issues that they’d have to deal with,” Skip York, an energy and global oil fellow at Rice University’s Baker Institute for Public Policy and a former oil industry employee, told NOTUS. “It’s going to take a lot of work to get from leasing to production.”

The Department of the Interior in November proposed opening up 34 new leases off the coasts of California, Alaska and the Gulf states from 2026 to 2031 — including in areas previously withdrawn from offshore drilling due to state regulations or policies set by former Democratic presidents or by President Donald Trump himself during his first term.

The plan is a draft and the department will release multiple other iterations before approving a new leasing schedule, but early opposition points to the administration’s quest falling flat.

Public comments on the first iteration of the proposal have been overwhelmingly negative. And high-profile environmental groups are signaling they could take legal action if the plan moves forward — particularly if leasing is approved in areas that have not seen oil and gas drilling historically and are expected to pose risky, environmentally threatening conditions.

“Opening California, the Gulf of Mexico, parts of Florida, and large areas of Alaska puts coastal economies, communities, and wildlife at risk,” Taryn Kiekow Heimer, the ocean energy director at the Natural Resources Defense Council, said in a statement. “Worse, pushing into the Arctic is especially reckless as cleanup is nearly impossible in the hostile conditions that exist there.”

The Department of the Interior did not respond to a request for comment.

The Trump administration could also see pushback from its own party. Republican lawmakers who represent areas along the Gulf Coast have criticized the plan and asked the Interior Department to exclude waters around their states or drop the plan entirely, citing risks to tourism from possible oil spills and risks to national security.

Rep. Vern Buchanan, a Republican from Florida, said the proposal would take the state in the “wrong direction” and vowed to oppose the final plan if it included areas around Florida.

The plan largely mirrors an offshore drilling proposal released by Trump’s first-term Interior Department in 2018, which invited a lawsuit over drilling in waters around Alaska that the administration ultimately lost. With the same areas at issue in this plan, similar legal problems could arise.

That’s also particularly true in California, where the Interior Department’s proposal would invite new offshore resource extraction for the first time in almost four decades. The state has restricted offshore drilling in state waters, which encompass the first three miles off the state’s coast, since a major oil spill in Santa Barbara in 1969, and there have also been no new federal leases in the area since the 1980s.

Though the restrictions in federal waters further off the state’s coast are murkier, any offshore activity that involves transporting oil and gas onshore in pipelines could be blocked by state laws. For industry players, that makes California among the least attractive areas for offshore drilling, experts told the Los Angeles Times last year.

And existing attempts to circumvent state waters, and thus state laws, are proving pricey and slow: Sable Offshore Corp, a company attempting to restart offshore drilling on three existing rigs near the California coast, said last year that storing and treating oil entirely offshore in federal waters would require almost $2 billion.

There’s some degree of enthusiasm about Trump’s plan from oil and gas companies. But it seems to stop at the Gulf region.

The American Petroleum Institute’s chief executive, Mike Sommers, said the industry group is “incredibly supportive” of Trump’s attempts to expand leasing in federal waters, praising “new access to the Gulf of America” created by the proposal and by other offshore leases sales spurred by Trump’s signature tax legislation.

The Gulf was the only area mentioned by name for offshore drilling in API’s 2026 policy agenda, which was released this week.

Even so, Sommers told NOTUS in a separate conversation that the industry thinks the new leasing proposal is important to signal future interest, but that “there might not be interest now.”

“Are there going to be rigs set up 100 miles off Florida tomorrow? Absolutely not,” Sommers said. “But it is an important signal to signal that these areas are open for development into the future.”

The Bureau of Ocean Energy Management, the Interior Department subagency that oversees oil and gas leasing, also does not have a positive assessment of some areas outside the Gulf Coast. BOEM said in the department’s draft plan that 15 of the areas it’s looking to sell leases in have “negligible resources” or “negligible development value.”

The bulk of those areas — most off the Alaska coast, including some that have no existing drilling infrastructure — remain on the department’s proposed leasing schedule. York told NOTUS that could be because there’s potential for some recoverable oil and gas resources there despite BOEM’s assessment.

But the Alaskan market is facing its own pressures that could be driving away industry interest.

Previous offshore exploration efforts off the northern Alaska coast were costly, and multiple were abandoned because of high costs and operational failures. And even existing drilling in Alaska has happened against the backdrop of a struggling oil and gas industry that’s had to deal with declining supply, shuttering facilities and low demand in the region.

One oil and gas company owner told the Alaska Beacon last year that Alaskans have “given up” on drilling in Cook Inlet, where the Trump administration is proposing six new lease sales in its draft plan.

And Trump’s recent push to take over Venezuela’s oil market is creating even more complications.

“Anything that we’re looking to do in Venezuela is going to be competing with these offshore leases that we’re going to get, because it’s about the same time frame,” York told NOTUS. “We might see less interest in the next couple of lease rounds, because the companies that have interest in U.S. offshore and Venezuela might be spending some time on Venezuela.”

The industry’s lukewarm embrace of the offshore proposal comes as the Trump administration is struggling more broadly to translate its “drill, baby, drill” ethos into results on the ground — even onshore.

The Bureau of Land Management did not receive any bids on an onshore oil and gas auction in Colorado this month, and it postponed a series of coal lease sales last year after an initial sale in Montana brought in only one bid at less than one cent per ton.