Interior Secretary Ken Salazar told a Senate panel Tuesday that he expects the department to have a revised five-year plan for leasing on the Outer Continental Shelf (OCS) ready by September 2010 or possibly earlier.

“Sometime within the year after those comments are all in [on Sept. 23], I hope that we are able to then have a comprehensive plan with respect to the future of the [OCS],” he said during a Senate Energy and Natural Resources Committee hearing on energy development on public lands and the OCS. “I think the renewable energy [rulemaking], part of it frankly is probably going to be easier than the parts that will deal with additional production in the offshore.”

In February Salazar delivered a blow to domestic oil and natural gas producers when he took steps to delay the completion of a Bush-era five-year offshore leasing plan (2010-2015) that proposed lease sales in previously banned areas of the OCS. He extended the public comment period by 180 days to Sept. 23. Salazar further directed Interior’s Minerals Management Service (MMS) and the U.S. Geological Survey to issue a report on traditional and renewable OCS resources in 45 days. He is scheduled to host four regional meetings (New Jersey, Louisiana, California and Alaska) in April to receive feedback on OCS oil and gas development (see Daily GPI, Feb. 11).

“I was disappointed by your decision” to stall the Bush-era offshore leasing plan, said Sen. Jim Bunning (R-KY). There “was no need” for the Bush administration — prior to leaving office in January — to reopen the existing five-year (2007-2012) leasing plan for the OCS, Salazar answered (see Daily GPI, Jan. 20).

“The time that we have chosen [for review] gives us ample time…to figure out a way forward” on the 1.75 million-acre offshore “asset” that belongs to the American public, Salazar noted. The Obama administration is facing a “new reality” with no drilling restrictions in the OCS, and so it “[needs] to be thoughtful” in drafting a future plan for development of the federal offshore.

He sidestepped a question by Sen. John McCain (R-AZ) about which parts of the OCS did President Obama support opening to oil and gas drilling. Salazar responded that the president backed offshore development as part of a comprehensive energy bill. But “the devil’s in the details,” said McCain.

Sen. Robert Menendez (D-NJ) applauded Salazar’s decision to extend the comment period on the “hastily constructed” five-year leasing plan that was issued at the end of the Bush’s term. He questioned why producers needed more areas to drill when the rig activity has fallen to 1,200 nationwide from 2,400 last year.

Some critics have accused the Obama administration of “rolling back” opportunities for oil and natural gas production, Salazar said, but he noted that “it is very much a part of our energy future.” The department has held seven onshore oil and gas lease sales since Obama took office, with producers purchasing 326 leases, covering 250,000 acres, for more than $32 million, according to Salazar. Interior’s Bureau of Land Management (BLM) is scheduled to hold an additional 32 oil and gas auctions for onshore public lands throughout the year.

Salazar also said he will serve as “auctioneer” for an MMS lease sale Wednesday offering 34.6 million acres in the Central Gulf of Mexico, including 4.2 million acres in the prized “181 South” area. This is the first of two Gulf of Mexico lease sales scheduled for this year. These oil and gas lease sales “should speak very loudly” of the Obama administration’s support for producers, he noted.

Under questioning from Sen. Robert Bennett (R-UT), Salazar said the agency was still reviewing the 77 parcels that Interior withdrew in February following an auction in Utah (see Daily GPI, Feb. 5). He stressed that the leases, which are near Arches and Canyonlands national parks, Dinosaur National Monument and Nine Mile Canyon, have not been canceled as of yet. Producers bid about $6 million on the 77 parcels that were auctioned off during a BLM sale on Dec. 19.

As for directional drilling of the Arctic National Wildlife Refuge (ANWR), Salazar said that while drilling technology has “significantly change” over time to minimize ecological harm, the Obama administration believes ANWR “needs to be protected.”

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