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Producers Protest Decision to Stall Bush-Era Leasing Plan

February 16, 2009
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The Obama administration last Tuesday delivered its second blow to domestic oil and natural gas producers in less than a week -- this time considerably stalling the process for review of the new five-year offshore leasing plan (2010-2015) that was issued in the final days of the Bush administration. The action elicited widespread protests from producers.

"I am once again taking steps to change the way the Department of Interior does business," Interior Secretary Ken Salazar said during a press briefing in Washington, DC. The proposed leasing plan, which would open banned areas off the Atlantic and Pacific coasts and in the eastern Gulf of Mexico, was issued on Jan. 16, the last business day of the Bush administration (see NGI, Jan. 19). This action, if left unchecked, would have accelerated by two years the regular process for creating a new plan for the Outer Continental Shelf (OCS), with it being finalized in 2010, he said.

"In my view it was a headlong rush of the worst kind," Salazar said. Moreover, the process during the Bush era was "tilted toward the usual energy players, while renewable energy companies and interests...were being overlooked."

To delay the process, Salazar has added 180 days to the time period for public comment on the proposed leasing plan. Comments initially were due March 23, but the deadline has been extended to Sept. 23. He further has directed Interior's Minerals Management Service and the U.S. Geological Survey to issue a report on traditional and renewable OCS resources in 45 days. And 30 days following the issuance of the report, Salazar said he will host four regional meetings on the OCS in Alaska and along the Eastern Seaboard, West Coast and Gulf of Mexico.

"We need to set aside the Bush administration's midnight timetable for its OCS drilling plan and create our own timetable," he said. "The additional time will allow us to restore an orderly process to our offshore energy planning."

In the meantime, "we will stay with the current five-year plan," he said.

He also said he was committed to issuing a final rulemaking on offshore renewable resources in the coming months. The Bush administration "torpedoed" offshore renewable energy development in favor of the more traditional fuels, he said. "This rulemaking will allow us to move from the 'oil and gas only' approach of the previous administration to the comprehensive energy plan that we need."

Salazar said the Obama administration was not turning its back on the oil and gas industry. "For those of you in the oil and gas industry...I pledge to all of you that you will have a seat at the table. We need your expertise and your resources" in developing a comprehensive approach to energy. The energy contributions made by oil and gas is "something that we welcome."

But he stressed that "a drilling-only approach onshore and offshore is not enough."

Salazar's latest action came less than a week after he directed the Bureau of Land Management (BLM) to withdraw leases to develop oil and gas on more than 100,000 acres in Northeast Utah (see NGI, Feb. 9). His action overturned the results of an oil and gas lease auction held in the final days of the Bush administration.

Major producer groups protested the Obama administration's decision to slow review of the Bush-era five-year leasing plan. "Congress made the American people wait nearly 30 years to address our immediate energy challenges," and Salazar last Tuesday "told the American people they must continue to wait -- even though more than two-thirds of them want to tap our vast domestic resources for the benefit of all Americans," said Jack Gerard, president of the American Petroleum Institute (API).

"The accelerated Outer Continental Shelf five-year plan process, which the secretary placed on hold...was designed to address the critical energy concerns facing Americans," he said. Gerard noted that the draft plan already has received a record 120,000 comments from states, environmental groups, industry, labor groups and the public -- with 87,000 of the comments supporting expanded and expeditious development.

"Secretary Salazar's announcement means that development of our offshore resources could be stalled indefinitely...Salazar's delay does a disservice to all Americans. We should be moving as quickly as possible to develop more of our own oil and natural gas to benefit all Americans," Gerard said.

The Independent Petroleum Association of America (IPAA) echoed the API's sentiments. "I am disappointed by the Obama administration's decision to delay moving forward on domestic energy development -- especially at a time when our economy is struggling, unemployment is rising and state treasuries are suffering," said IPAA President Barry Russell.

"Poll after poll confirms that the American people understand the imperative of producing more of our energy resources right here at home, support it and are prepared to take the steps necessary to ensure it remains a top national priority," he said.

"We need to act quickly and aggressively to develop domestic energy resources...This unnecessary delay will hold America back, at the precise moment when we need to move forward the most," Russell said.

On Capitol Hill Sen. Lisa Murkowski (R-AK) reminded President Obama that during his run for the White House he supported including offshore drilling in a comprehensive energy package, but she noted that his administration so far has taken no steps to encourage domestic production of conventional oil and natural gas (see NGI, Aug. 11, 2008).

"If past policies are to be dismissed, it should be those that locked away vital resources and left our nation nearly 60% dependent on foreign oil," said Murkowski, the ranking Republican member of the Senate Energy and Natural Resources Committee.

"Every state should have the opportunity to decide for itself whether it wants to develop its offshore resources. Those states that choose to allow development should benefit by receiving a fair share of federal revenues from production," she noted.

Democrats mostly supported Salazar's decision to put the five-year leasing plan on hold. "Secretary Salazar's strategy for developing offshore energy is both thoughtful and balanced. Public opinion on offshore development varies from region to region, so his plan to hold regional conferences makes a good deal of sense," said Senate Energy Committee Chairman Jeff Bingaman (D-NM).

"This is very good news from the Interior Department...I look forward to turning the page on the false promise of new offshore drilling -- and instead focus on making the shift to a cleaner and greener energy policy," said Sen. Dianne Feinstein (D-CA).

"The new administration is stopping this headlong rush to open new offshore areas [to] drilling, calling for a thorough review with much greater public participation," said House Speaker Nancy Pelosi (D-CA).

Ted Danson, film and television star turned ocean conservationist, last Wednesday called on Congress and President Obama to reinstate the bans on drilling off the East and West coasts, as well as to block drilling in Alaska's Bristol Bay.

"The harm posed by oil and gas activities in the Outer Continental Shelf [OCS] is too large to ignore. As a result, it is incumbent upon the Congress to reinstate the OCS moratoriums as soon as possible," Danson told the House Natural Resources Committee during the first of a series of oversight hearings on offshore exploration and development.

The president also should reinstate the executive moratorium to provide an "added layer of protection for our marine life and coasts," said Danson, a member of the board of directors of Oceana, a global ocean conservation group based in Washington, DC. "The worsening threat of climate change imposes a new urgency" for reinstating the OCS ban, he noted.

The API responded quickly to Danson's testimony. "Renewable energy sources will be a growing part of America's energy future. But it is wrong to suggest that reimposing the federal moratoria on offshore exploration and development is a step torward that goal," said the producer group.

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