Daily GPI / NGI The Weekly Gas Market Report / Production / Regulatory / NGI All News Access

Interior's 2017-2022 OCS Lease Plan Includes Atlantic and Limited Alaska

A draft strategy for offshore oil and natural gas leasing, released Tuesday by Secretary of Interior Sally Jewell and Bureau of Ocean Energy Management (BOEM) Director Abigail Ross Hopper, includes for the first time a portion of the Mid- and South Atlantic outer continental shelf (OCS) from Virginia to Georgia.

The Draft Proposed Program seeks public comment on 14 potential lease sales in eight planning areas -- 10 sales in the Gulf of Mexico (GOM), three off the coast of Alaska, and one, late in the 2017-2022 program, in areas offshore Virginia, North and South Carolina and Georgia.

"At this early stage in considering a lease sale in the Atlantic, we are looking to build up our understanding of resource potential, as well as risks to the environment and other uses," said Jewell.

The potential lease sale would require a 50-mile coastal buffer to minimize multiple use conflicts, such as those from Department of Defense and NASA activities, renewable energy activities, commercial and recreational fishing, critical habitat needs for wildlife and other environmental concerns. The proposal "is in line with comments received from adjacent states and reflects the administration's thoughtful approach to potential lease sales in new areas, pending further public review and comment," Interior said.

The draft also proposes one sale each in the Chukchi Sea, Beaufort Sea, and Cook Inlet areas. Not included in those proposed lease sales are 9.8 million acres of the Beaufort and Chukchi seas that President Obama on Tuesday designated off limits to oil and natural gas leasing "in order to protect areas of critical importance to subsistence use by Alaska Natives, as well as for their unique and sensitive environmental resources," Interior said. Last month, Obama extended indefinitely a four-year-old freeze for oil and natural gas leasing in the waters of Alaska's Bristol Bay, a move criticized by industry representatives (see Daily GPIDec. 17, 2014). The North Aleutian Basin Planning Area, which includes Bristol Bay, consists of about 32.5 million acres, a portion of which was leased in the mid-1980s but never developed due to litigation, according to the White House.

Tuesday's proposal follows closely on the heels of the Obama administration's recommendation to designate core areas and the coastal plain of the Arctic National Wildlife Refuge (ANWR) as wilderness, a move that infuriated Alaska's independent governor and its all-Republican contingent in Congress (see Daily GPIJan. 26). If approved by Congress, the wilderness designation would be the largest in Interior's history and would designate nearly all of ANWR's total 19.8 million acres as wilderness. Currently, more than 7 million acres of ANWR are managed as wilderness.

Sen. Lisa Murkowski (R-AK), who was sharply critical of that move, slammed the proposed lease plan as well.

"This administration is determined to shut down oil and gas production in Alaska's federal areas -- and this offshore plan is yet another example of their short-sighted thinking," according to Murkowski, the chairman of the Senate Energy and Natural Resources Committee. "The president's indefinite withdrawal of broad areas of the Beaufort and Chukchi seas is the same unilateral approach this administration is taking in placing restrictions on the vast energy resources in ANWR and the NPR-A [National Petroleum Reserve in Alaska].

"This administration is once again promising Alaskans that it will allow exploration sometime in the future -- but not right now. I think we all know what promises from this administration are worth. They promised Alaska multiple lease sales under the current five-year plan, but so far there have been none, as sales continue to be postponed even past when the president will no longer be in office. Promises will not fill the Trans-Alaska pipeline."

Four of the five areas withdrawn by Obama Tuesday were previously excluded from leasing in the current 2012-2017 oil and gas program, and three of the five were also excluded by the Bush administration, Interior said. And the proposed Alaska sales would be scheduled late in the 2017-2022 program to provide additional opportunity to gather and evaluate information regarding environmental issues, subsistence use needs, infrastructure capabilities, and results from any exploration activity associated with existing leases from previous sales.

"We know the Arctic is an incredibly unique environment, so we're continuing to take a balanced and careful approach to development," Jewell said. "At the same time, the President is taking thoughtful action to protect areas that are critical to the needs of Alaska Natives and wildlife."

As usual, a majority of the proposed sales would be for GOM properties, but Interior included a new approach to lease sales by proposing two annual lease sales in the Western, Central, and the portion of the Eastern GOM that is not subject to congressional moratoria. Traditionally, the approach has been one sale in the Western and a separate sale in the Central GOM each year.

"This new approach will allow for BOEM to more effectively balance the sales while providing greater flexibility to industry to invest in the Gulf, particularly given the significant energy reforms recently adopted by the Mexican government [see Daily GPIDec. 11, 2014]," Hopper said.

No Pacific coast lease sales are proposed in the draft.

"The draft proposal prioritizes development in the Gulf of Mexico, which is rich in resources and has well-established infrastructure to support offshore oil and gas programs," Jewell said. "We continue to consider oil and gas exploration in the Arctic and propose for further consideration a new area in the Atlantic Ocean, and we are committed to gathering the necessary science and information to develop resources the right way and in the right places. We look forward to continuing to hear from the public as we work to finalize the proposal."

The proposal wasn't fully endorsed by environmental groups. The Sierra Club applauded Obama's decision to limit drilling in the Arctic Ocean, but said they were "disappointed...that the administration continues to consider opening up new areas offshore to drilling, including off the Atlantic coast and in other parts of the Arctic Ocean.  Opening these areas to dirty fuel development is incompatible with a healthy future for America's coastlines, coastal communities, or our climate, and the Sierra Club will oppose these plans vigorously."

Release of the draft is an early step in a multi-year process to develop a final offshore leasing program for 2017-2022. Interior took the initial step to develop the 2017-2022 schedule of potential offshore oil and natural gas lease sales in June (see Daily GPIJune 13, 2014).

In conjunction with the announcement, Interior published a Notice of Intent to Develop a Draft Environmental Impact Statement in accordance with the National Environmental Policy Act. Following public comment and environmental review, the department will prepare a Draft EIS and Proposed Program, and a Final EIS with the Proposed Final Program. The Draft Proposed Program and the Notice of Intent to Develop a Draft Environmental Impact Statement will be available for public comment for 60 days following the publication of the documents in the Federal Register.

The OCS leasing plan now in place was published in mid-2012 and extended to 2017 (see Daily GPIJune 29, 2012Dec. 18, 2012). That plan proposed 15 lease sales in six offshore areas, including three in the Western and Central Gulf of Mexico (GOM), and the portion of the Eastern GOM not under a Congressional moratorium (see Daily GPIDec. 2, 2010). The program also included three potential lease sales in Alaska's Cook Inlet, Chukchi and Beaufort seas. No sales were scheduled for the Atlantic or Pacific coasts.

ISSN © 2577-9877 | ISSN © 1532-1231 | ISSN © 1532-1266

Recent Articles by David Bradley

Comments powered by Disqus