States should have the authority to decide the level of activity on the Outer Continental Shelf (OCS), a group of Republican governors said this week at the Offshore Technology Conference (OTC) in Houston.
The OCS Governors Coalition, which includes the governors of Alabama, Alaska, Louisiana, Mississippi, North Carolina, South Carolina, Texas and Virginia, was formed two years ago to promote a dialogue with the federal government on responsible development of offshore energy resources. The federal OCS extends from three to 200 miles offshore across close to 1.76 billion acres.
The coalition last year called on the Obama administration to expand drilling access offshore, including in areas that today are closed to development (see Daily GPI, Aug. 15, 2012). A formal request also was made last year for coastal states to receive a share of the revenue associated with the production.
At the OTC on Monday, the coalition underscored its support for federal legislation to mandate revenue sharing from developing oil, natural gas and renewables in the OCS.
Alaska Gov. Sean Parnell, who chairs the coalition this year, applauded an effort by Congress for “a serious look at legislation that would share federal revenues from OCS energy development, whether it is from oil, gas, wind or tidal sources…In a challenging economic environment, with tightened budgets on both state and federal levels, such new revenues would be a welcome option to not only reduce deficits, but to create much needed jobs and put our nation on a path toward energy independence.”
Today, he said, “Eastern Seaboard states and Alaska are generally not eligible to share in revenues generated by oil, gas, and renewables in the OCS. These states should be treated equitably with other coastal states…We continue to urge the Obama administration to provide efficient and consistent regulatory approval” to develop OCS resources. “This will increase regulatory certainty and will result in jobs and additional revenue to reduce our nation’s growing debt.”
Alabama Gov. Robert Bentley said he thought that “the significant revenues generated from oil and gas operations in federal waters should be shared in a fair way, with the coastal states that assume the risk and provide the support for those offshore operations.”
Pointing to the Department of Interior’s five-year leasing plan for 2012-2017, Parnell said new areas were not part of the plan through 2017, including leases in the Atlantic Ocean, even though a lease sale off Virginia’s cost had been included in the previous five-year plan.
“What’s more, Interior postponed all Arctic OCS lease sales by one year from the date proposed in the draft plan,” said the Alaska governor. “As it stands, 85% of America’s OCS is closed to oil and natural gas exploration. This is unacceptable.”
The federal government, he said, is “preventing independence, preventing the effectiveness of our industry…Those places that are open to development, that are allowed to grow, do and are profiting beautifully…We are in the business of creating thousands of high-paying American jobs in an effort to decrease the amount of Americans that are unemployed, specifically 11.7 million.”
“There’s an imaginary line between state and federal waters,” said Mississippi Gov. Phil Bryant. “How does the government determine what is right for our waters?” Bureaucrats now in Washington, DC, are “trying to tell us what to do,” but they weren’t “there that day we were struggling” with the Macondo spill aftermath. “But now they believe they know better than us, and that somehow our input is not necessary for us to go forth.”
Texas Gov. Rick Perry claimed that offshore development remained slower than it was before the Macondo well blowout in April 2010, but that statement doesn’t match industry or federal figures. Several operators are operating more rigs and drilling more wells than they were pre-Macondo, including BP plc, which has seven rigs now in operation, its highest level ever.
The Texas governor also claimed that states along the Gulf Coast still are feeling the effects of the drilling moratorium, which was lifted in 2011.
“States need to be given the freedom to expand areas of exploration, and the leeway to work with the energy industry to develop the resources that we have on hand,” said Perry. “That’s a vital part of any ‘all of the above’ energy policy and would be a major benefit to both the individual states and to the nation as a whole.”
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