By Avi Salzman

President Joe Biden is putting roadblocks in the way of Donald Trump's plans to increase American oil and gas drilling.

The tactics won't change Trump's ambitions, but they will impose administrative and legal delays that could slow his plans. It is another sign that the time when oil companies just "drill, baby, drill" could take months or years to arrive, if it happens at all.

Biden imposed a ban on Monday on oil-drilling in 625 million acres off certain parts of the U.S. coast, but that had little to no impact on the stocks of oil-services companies, such as Transocean, that drill offshore. The areas he blocked aren't currently producing oil anyway, and most weren't likely to be the site of new drilling for several years, if ever.

Transocean was up 0.5%, while Nabors Industries fell 1% and SLB rose 1%.

"The near-to-medium-term impact on offshore operators and service companies appears negligible as activity in the central planning area (offshore Alabama, Mississippi and Louisiana) and western planning area (offshore Texas) of the Gulf of Mexico are unaffected," wrote Citi analyst Scott Gruber.

While Trump made oil drilling a central plank of his campaign for president. Biden has now snarled Trump's plans in at least two ways. In addition to Monday's ban, the Biden administration published a study in December that questioned whether the U.S. should continue to increase how much natural gas it sends overseas because of the environmental and economic effects. Trump has vowed to push ahead with new permits for export terminals for liquefied natural gas, but the study could help opponents of LNG develop a legal case against the industry, or delay approval of new permits.

Monday's ban could also slow Trump down. The areas where Biden banned drilling include the entire East Coast, the eastern Gulf of Mexico, the waters off California, Washington and Oregon, and areas around the Bering Strait near Alaska. Oil drilling isn't happening in those areas today, and Biden said exploration there isn't worth the potential environmental harm.

"It is clear to me that the relatively minimal fossil fuel potential in the areas I am withdrawing do not justify the environmental, public health, and economic risks that would come from new leasing and drilling, " Biden said.

The Trump campaign said the ban was a "disgraceful decision," and vowed to overturn it. "Rest assured, Joe Biden will fail, and we will drill, baby, drill."

Biden's ban may be somewhat difficult to reverse, however. He imposed it under a law called the Outer Continental Shelf Lands Act, which allows the president to block drilling in certain areas. To overturn the decision, Trump may need help from Congress.

Biden has never been a close ally of the oil-and-gas industry, but his administration has generally been favorable to it, even opening up areas for drilling in Alaska. On his way out, however, he is putting up barriers that could take time to circumvent.

Write to Avi Salzman at avi.salzman@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 06, 2025 15:46 ET (20:46 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.