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Trade Groups to BOEM: Open More of Offshore to Drilling

Eleven oil and gas trade associations have signed a letter urging the Interior Department's Bureau of Ocean Energy Management (BOEM) to make new areas of the Atlantic and Pacific oceans, as well as the eastern Gulf of Mexico (GOM), available for leasing.

In a 16-page letter to Kelly Hammerle, program manager for BOEM's 2017-2022 Outer Continental Shelf (OCS) Oil and Gas Leasing Program, representatives from the trade associations said the agency "should fully consider all areas for inclusion in the program and keep as many areas as feasible in the draft proposed program."

"It is important for BOEM's evaluation of the OCS areas to be all-inclusive and not prematurely eliminate areas that have resource development potential," the representatives said. "The multi-step program development process is designed to collect information from all stakeholders, provide the opportunity for careful analysis and consideration of available information, and allow the Secretary of the Interior to decide on what areas are best suited for future offshore exploration and development activities.

"However, the existing process does not allow an area removed from consideration at an early stage to be added back in at a later stage, thus highlighting the importance of not prematurely eliminating areas from consideration."

The representatives added that the Atlantic OCS has not been explored for decades, and no lease sales for the Atlantic were included in the 2012-2017 leasing program, despite strong support from Virginia, North Carolina and South Carolina (see Daily GPI, June 22, 2011). They said the Atlantic was excluded for a variety of reasons, including a lack of information on potential resources, a lack of preparedness for oil spills and potential conflicts with the military.

"BOEM has undertaken efforts to address all of these areas," the representatives said, adding that a programmatic environmental impact statement (PEIS) will allow seismic surveys in the Mid- and South Atlantic to move forward. Last month, BOEM Acting Director Walter Cruickshank issued a decision authorizing seismic surveying based upon the PEIS (see Daily GPI, July 21).

"With new seismic data in hand, even better informed decisions can be made as to the true resource potential in these areas," the representatives said, but they added that the timing between the 2017-2022 program and the industry's collection of seismic data is “out of sync. BOEM will need to make decisions regarding which areas to include in the draft proposed program well before industry collects and analyzes any seismic data."

The representatives said that as many as eight applications have been submitted to BOEM to conduct seismic surveys in the Atlantic. Since the permitting process is expected to take anywhere from nine to 18 months, oil and gas companies may not have any data until 2015 at the earliest.

"Factoring in data processing time, 2016 would be the earliest time frame for BOEM and industry to have additional information upon which to base future leasing decisions," the representatives said. "If the Atlantic OCS is not included in the draft proposed program, then new seismic data will likely not be available since the incentive for companies to collect the data -- and the prospect of a future lease sale -- will be gone...

"We respectfully request that, at a minimum, the Mid- and South Atlantic OCS planning areas be included in the draft proposed program."

The trade associations are the American Petroleum Institute, the National Ocean Industries Association, the Independent Petroleum Association of America, the U.S. Oil and Gas Association, the American Exploration & Production Council, America's Natural Gas Alliance, the Natural Gas Supply Association, the International Association of Geophysical Contractors, the Petroleum Equipment Suppliers Association, the Energy Equipment and Infrastructure Alliance and the Alaska Oil and Gas Association.

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