First, some very good news on the energy front: Exxon Mobil is set to drill into a massive, 85-billion-barrel arctic oil reserve that will soon be gushing crude.
Now the bad news: They’re doing it for Russia, not America.
On the surface, the $3.2 billion deal between Exxon Mobil and Russia’s state oil producer, Rosneft, doesn’t look so big. But it could turn into the largest oil deal ever.
Indeed, the projects in Russia’s Arctic region and on the Black Sea could be huge, with oilfields in Russia’s frozen north holding up to 85 billion barrels of crude.
If the oil flows as expected, total investment could hit $500 billion, or 18% of Russia’s gross domestic product, with pumping to begin in 2020.
As part of the deal, Rosneft gets a bigger piece of the U.S. energy market — a one-third stake in three major Exxon Mobil offshore and shale oil projects here in the U.S., the Gulf of Mexico and Canada.
So why can’t Exxon Mobil do a similar gigantic project here? The sadly disturbing answer is, President Obama won’t let them.
Federal lands have largely been closed to all oil development. Roughly 97% of our Offshore Continental Shelf is shut. Major fields in Alaska and the Arctic have likewise been kept from development.
It’s a pity, because there’s an enormous amount of oil in those areas — oil that could be creating wealth, income and jobs for millions of Americans.