Erik Milito's remarks at press briefing on opening new areas for offshore oil and gas leasing
Press briefing on opening new areas for offshore oil and gas leasing
Erik Milito, API director upstream and industry operations
Tuesday, January 27, 2015
Opening statement as prepared for delivery:
America has become a global energy superpower thanks to an energy renaissance that is often thought of as purely an onshore phenomenon. But offshore development still represents a large chunk of U.S. oil and natural gas production.
The Gulf of Mexico alone accounts for about 16 percent of the oil and 4.5 percent of the natural gas produced in the U.S. today. That's enough energy to fuel 18.4 million cars and heat 17 million homes.
And the contribution from offshore development could be much higher. Considering the enormous benefits that oil and natural gas development brings to our economy – including millions of jobs, billions of dollars for the government and the widespread impact of greater energy security – one might wonder why the government keeps 87 percent of federal waters off-limits to oil and gas exploration.
This is the question that should guide the federal Bureau of Ocean Energy Management as it develops the next 5-year plan for offshore leasing.
By keeping so much locked away, the U.S. government is saying “No thanks” to 840,000 new American jobs, 3.5 million barrels of oil equivalent per day, and more than $200 billion in government revenue.
But all these benefits and more are possible if the government changes course and holds offshore oil and gas lease sales in the Atlantic, Pacific and Eastern Gulf of Mexico, according to studies by Quest Offshore Resources.
Keeping our role as the world leader in energy will require a commitment from America’s leaders to opening new areas to offshore oil and natural gas development. The government should also continue to offer new leases in the Arctic and the Western and Central areas of the Gulf of Mexico.
Few areas of the world are thought to contain more undiscovered oil and natural gas resources than the Arctic. The Beaufort and Chukchi Seas alone could hold more potential resources than our Atlantic and Pacific coasts combined.
Americans strongly support expanding offshore oil and gas development. We saw this on election night in a Harris Poll of actual voters in the November elections, and it is evident once again in new polls that the Harris Poll recently conducted in Florida, Georgia, South Carolina, North Carolina and Virginia.
Support for offshore drilling ranges from about two-thirds to more than three-quarters of registered voters in these states.
Each of the polls found strong majorities who want to see the U.S. produce more oil and natural gas here at home because they agree it will create jobs, stimulate our economy, strengthen the country’s energy security and benefit American consumers.
Unfortunately, voters also agree that the federal government does not do enough to encourage domestic oil and natural gas development. The Obama administration has a chance today to show that it is listening.
This will be a real test of the administration’s commitment to America being the world leader in energy.
The next step for BOEM is to publish a draft proposed program outlining which of the 26 offshore planning areas remain in consideration for leasing beginning in 2017. We expect the regulator to take this step very soon.
At this early stage, it would be premature and irresponsible to leave out of the draft program any area that holds the potential for significant discoveries of oil and natural gas.
There will be many opportunities for public comment and input as part of the BOEM's decision-making process, so the government's first draft should permit full consideration of all planning areas where significant discoveries are possible.
Opening new areas offshore is critical to continuing America's energy renaissance.
Offshore oil and natural gas development is a long-term investment, and it's not uncommon for a decade or more to pass between a lease sale and the first barrel of commercial production. The energy America produces offshore today is only possible because of decisions made over several decades by both regulators and the private sector.
For the same reason, how much energy we produce offshore fifteen and twenty years from now depends on the decisions being made today.
There is no question about the world's need for this energy. Independent experts expect global demand for oil and natural gas to continue growing for decades. The only question is whether the federal government will allow the U.S. to remain an energy superpower in the years to come.
Having said that, if those of you on the phone have any questions, I'd be happy to take them.