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Atlantic OCS Survey Permitting No One-Step Process, BOEM Chief Tells House Subcommittee

Industry is anxious to move forward with geological surveys of the Atlantic Outer Continental Shelf (OCS) to discover the potential of natural gas and oil resources, but input from myriad federal agencies is slowing down those plans, a House subcommittee was told Tuesday.

Last year the Obama administration approved the use of sonic sensors and air guns to explore for resources in the Atlantic OCS through a record of decision (ROD) and programmatic environmental impact statement (PEIS) (see Daily GPIJuly 21, 2014). The move followed Interior's Bureau of Ocean Energy Management (BOEM) geological and geophysical (G&G) mitigation measures that would be used to protect marine life before surveys were performed (see Daily GPI, Feb. 27, 2014).

Industry participants testifying before the House Subcommittee on Energy and Mineral Resources are anxious to get underway on seismic and other types of surveys of the Atlantic OCS. One year past the PEIS approval, companies continue to cool their heels.

ARKek Inc. President Jim White testified on behalf of the International Association of Geophysical Contractors. White's UK-based company, which has offices in Houston, acquires geophysical data using full tensor gravity gradiometry (FTG). Energy operators use FTG in conjunction with separately obtained seismic data. The FTG survey data would be acquired in the Atlantic from a fixed-wing aircraft with no at-sea activities and no component in federal or state waters, White told the committee.

"There is no question that geophysical surveys are greatly needed in the Atlantic," he said. "It has been nearly 40 years since G&G surveys were conducted in Atlantic waters. BOEM currently estimates that the Mid- and South Atlantic OCS contains at least 4.7 billion bbl of oil and 37.5 Tcf of natural gas.

"These estimates are impressive, but it is widely believed that modern seismic imaging using the latest technology will show much greater resources than the 40-year-old estimates. Geologists and geophysicists believe that the Atlantic OCS could have much more abundant oil and gas resources than we previously believed, based on the hydrocarbon productivity of the Atlantic Margin in areas like West Africa, Brazil and Nova Scotia. Thus, current estimates are outdated and, in all likelihood, grossly inaccurate."

BOEM issued its draft five-year leasing plan for offshore oil and gas leasing in January (see Daily GPIJan. 27). At that time Interior Secretary Sally Jewell said she was interested in "learning more about the resource potential" in the Atlantic OCS, White noted.

"Modern geophysical imaging is the only feasible technology available to make this evaluation," he said. "The industry’s array of new tools -- reflection, gravity, magnetics, electromagnetic -- can better help us understand the potential resource."

ARKeK applied for an survey permit in June 2014.

"To our knowledge, every agency has approved and signed off on our permit and our plane is sitting in North Carolina ready to commence operations, awaiting the administration’s final approval," said White. "Now is the time for the nation to take the necessary steps toward continued energy security and independence by allowing geophysical surveys to get underway in the mid- and south Atlantic OCS. We must equip our decisionmakers with the necessary information they need to make sound decisions regarding the future of oil and gas leasing in the Atlantic.

"Americans deserve public policy decisions that are made based on the best information possible, and modern geophysical surveys provide that data."

Subcommittee Chair Doug Lamborn (R-CO) said BOEM appeared to be dragging its feet on permit approvals, but BOEM Director Abigail Ross Hopper said BOEM wants -- and needs -- new seismic data.

Of the nine applications submitted to conduct "conventional energy" surveys, seven have been completed for "deep penetration seismic," while one would collect airborne gravity and magnetic data only, and one is for a high resolution multi-beam and sub-bottom profiler survey to collect sea floor and shallow subsurface information, Hopper said.

From 1966 through 1988, 2-D seismic data were acquired in all areas of the Atlantic OCS, but data since have been eclipsed by new acquisition techniques using more advanced instrumentation, computer capacity and technology, she noted.

"Industry seismic surveys in the Atlantic have not been conducted since the 1980s because of a federal moratorium on oil and gas activities off the Atlantic coast, which expired in 2008," Hopper said. "Additionally, BOEM decided not to begin reviewing permit applications until the PEIS was completed and a decision made on its alternatives..."

The ROD issued last year didn't authorize any G&G activities, Hopper said. Rather, it established a framework for additional mandatory environmental reviews for site-specific actions, and it identified broad measures governing future G&G activities. And permitting isn't a one-step process, she explained.

"Before each permit can be issued, BOEM conducts careful environmental analysis to ensure protection of the marine ecosystem," Hopper said. "The permit applications are also subject to coastal state consistency review determinations pursuant to the Coastal Zone Management Act [CZMA]. Of the nine active permits, seven applications have completed the CZMA review process. Two applications did not require consistency review and five applications that include seismic surveys have conditional concurrences or presumed concurrences from the affected states.

"Further, applicants for seismic surveys need to secure additional authorizations from the National Marine Fisheries Service under the Marine Mammal Protection Act and the Endangered Species Act. BOEM will not issue permits until these processes are complete."

Spectrum Geo Inc. President Richie Miller said the hearing "could not be timelier." His company acquires and processes seismic data, and licenses products to oil and gas companies. Acquiring new data in the Mid- and South Atlantic is a process "wrought with delays and uncertainty," because of the many hoops companies are required to jump through.

Ironically, said Miller, federally funded "academic seismic surveys take place off the U.S. East Coast virtually every year" with all of the various reviews. Other countries also permit seismic operations "much more efficiently," he said. He noted that Spectrum filed a permit with Mexico to conduct a seismic survey in February "and began acquiring data on June 10. This took place after completing an environmental impact statement and a social impact study, submitting those applications and studies and receiving approval from three federal agencies for a program using very similar mitigation techniques to those that would be used in the U.S. Atlantic.

"There are now eight seismic vessels and five companies operating in different areas of the Mexican Gulf of Mexico in a safe and efficient manner."

Over the past two and half years, he said, Spectrum has spent almost $1 million to receive an Atlantic OCS survey permit, a process that he called ineffective and uncertain.

"Spectrum and other companies continue to spend time and money on this broken process, and we may never get the permits necessary to inform the public and decision makers on the Atlantic's true resource potential," Miller warned. "This system needs to be fixed. It is a hindrance not only to our industry's ability to do business in the United States, but also to your ability as elected officials to make informed, science-based decisions."

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