A proposed Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2012-2017 announced by the Department of Interior Tuesday will make more than 75% of estimated undiscovered but technically recoverable oil and gas resources in federal offshore areas available for exploration and development, according to Secretary of the Interior Ken Salazar.
The 217-page proposal is “regionally tailored” to the unique resources, needs and infrastructure of different parts of the OCS, Salazar said. It calls for 15 lease sales in six offshore areas where there are currently active leases and exploration and where there is “known or anticipated hydrocarbon potential.” It includes plans for five annual area-wide lease sales in the Western Gulf of Mexico (GOM), beginning in fall of 2012; five sales in the Central GOM, beginning in the spring of 2013; two sales in the Eastern GOM in 2014 and 2016; one sale in the Beaufort Sea in 2015; one sale in the Chukchi Sea in 2016; and one special interest sale in Cook Inlet, “which is initially scheduled for 2013 but may be moved to later in the program depending on industry interest in the sale.”
Excluded from the proposed program are areas in the Eastern GOM and Straits of Florida that are subject to a congressional moratorium, as well as the Mid- and Central Atlantic and areas of the Pacific.
“This proposed leasing program represents a major step forward in the way the U.S. government and the Interior Department oversee resource development offshore,” said Bureau of Ocean Energy Management (BOEM) Director Tommy P. Beaudreau. The tailored, region-specific approach to leasing “is a break from the historical ‘one size fits all’ approach,” he said.
But to Rep. Doc Hastings (R-WA), chairman of the House Natural Resources Committee, the proposed lease sale program amounted to little more than a five-year drilling ban on most offshore areas.
“No new drilling or new lease sales will occur during President Obama’s term in office, despite the overwhelming support of the American people for new offshore energy production,” Hastings said. “The president’s plan is to simply say ‘no’ to new energy production and ‘no’ to new American jobs created by new offshore drilling. It’s a plan that is sending American jobs overseas, forfeiting new revenue, and denying access to American energy that would lessen our dependence on hostile Middle Eastern oil.”
The proposed program reflects changes that have taken place in the industry and in its regulation since the Macondo well blowout in April 2010. The plan was “designed to promote the diligent development of the nation’s offshore oil and gas resources” and at the same time “is grounded in the lessons learned from last year’s Deepwater Horizon tragedy,” according to the Interior Department.
“Offshore drilling will never be risk-free, but over the last 18 months we have moved quickly and aggressively with the most significant oil and gas reforms in the history of the United States,” Salazar said. “We have done it not only here in the United States, but we have engaged the international community on safer drilling practices around the world because at the end of the day, the oil and gas industry is a global industry, not just an industry that operates in the Gulf of Mexico.”
Last month BP plc received a permit to drill in the Keathley Canyon of the GOM, making it the first drilling permit approved for the producer since the Macondo well blowout (see Daily GPI, Oct. 27; April 22, 2010). The Interior Department’s Bureau of Safety and Environmental Enforcement (BSEE) approved the permit less than a week after its sister agency, BOEM, preliminarily approved BP’s 214-page exploration blueprint to drill four deepwater wells in the GOM’s Keathley Canyon off the southern coast of Louisiana (see Daily GPI, Oct. 25).
Sen. Jim Webb (D-VA), whose state has sought federal approval to move forward with offshore drilling (see Daily GPI, July 7), on Tuesday called on the Obama administration to consider including Virginia in the final five-year lease plan.
“Oil and gas exploration within the Virginia Outer Continental Shelf — if coupled with an equitable formula for sharing revenues between the state and federal governments — would boost domestic energy production while benefiting the commonwealth’s economy,” Webb said. “As we work to address our energy future here in Congress, it is important to note the administration’s existing authority to include Virginia in the current five-year lease plan, and I once again urge the president to exercise that authority.”
Similarly, the American Petroleum Institute (API) said the proposal, while a “good first step,” should have included Virginia, the eastern GOM and other areas. “Opening these areas could create additional jobs, enhance our economic growth and energy security, and create a national energy policy that our country needs. Unfortunately, the proposed plan falls short of this approach,” API said.
The National Ocean Industries Association (NOIA) was also critical of the omission of Virginia’s offshore areas. “This ill-conceived plan leaves us looking in the same areas we have looked for over a generation and would cast our energy reliability and security lot to the whims of other, often unfriendly nations. While today’s decision is not unexpected, the lack of new access is deeply disappointing and frankly bears little resemblance to the president’s announcement in March of this year — amid high energy prices — that it had set the goal of reducing oil imports by one-third by 2025,” NOIA said.
According to Interior’s proposal, BOEM “is moving forward expeditiously to facilitate resource evaluation” in the Mid- and South-Atlantic planning areas, where “the oil and gas resource potential…is not well understood.”
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