A Bipartisan Call for Offshore Energy

Mark Green
Posted August 4, 2014

Members of the U.S. House and Senate are weighing in with Interior Secretary Sally Jewell on the administration’s new five-year oil and natural gas leasing program, and the message is fairly simple: open more of the outer continental shelf (OCS) for exploration and development.

Interior has begun work on the new leasing program that will cover 2017 to 2022. The plan is critical to offshore development because it lists areas where the federal government could hold auctions for oil and natural gas drilling leases. It lets energy companies know where to concentrate research efforts that guide bids on specific lease blocks. Currently, 87 percent of the offshore area under federal control is closed to development:

In their letter to Jewell, 164 House Republicans note that oil and natural gas development onshore is boosting the U.S. economy, creating jobs and increasing revenues to governments:

The energy boom on state and private lands stands as a paradigm of our nation's entrepreneurial spirit. There is no reason why we cannot replicate this vigorous job growth in more states by opening new OCS areas for development as was envisioned in 2008 when the moratoria on the OCS was lifted in a bipartisan fashion between the then Democrat Majority House and President Bush.

The House letter calls for expanding offshore development opportunity:

... we believe the (Interior) Department must move forward with a Five Year Program that continues to lease in the Gulf of Mexico but also includes new areas with the greatest resource potential as well as areas such as the Mid- and South-Atlantic, or the Arctic, where there is strong bipartisan support from members of Congress, governors, state legislators, local leaders and the general public for allowing oil and natural gas development.

House members say limiting leasing to areas where leasing already has occurred will hinder offshore energy development:

With the formation of the 2017-2022 Five Year Program , this administration will be responsible for a decade of offshore lease planning; a legacy of leasing in existing areas will not put our nation's offshore energy production on sound footing.  We cannot afford to pass up this pivotal opportunity to expand safe and responsible OCS energy development.

A group of Senate Democrats likewise urges Jewell’s department to expand OCS access in the next federal leasing plan:

We believe the Department should move forward with a Five Year Program that continues to lease currently open areas but also allows for the consideration of exploration for all areas with reasonable potential for future resource development. We know from experience in the Gulf of Mexico that these unexplored areas very likely hold much more potential than outdated resource estimates suggest.

The last point about outdated resource estimates is critically important. Last month the Bureau of Ocean Energy Management (BOEM) issued new estimates for the oil and natural gas that could be found on the Atlantic OCS that were 43 percent and 20 percent higher, respectively, than the agency’s previous estimate done in 2011. And BOEM acknowledged its estimate could be low. Safe seismic surveying is needed to determine the actual size of the resource, and including areas in the federal five-year plan is key to getting sophisticated testing done.

The senators – Louisiana’s Mary Landrieu, Alaska’s Mark Begich, Virginia’s Mark Warner and West Virginia’s Joe Manchin – note strong support for expanded offshore development from governors, state legislators, local leaders and the general public:

Areas that have not seen the direct benefits of offshore development are anxious to reap them. Offshore energy production must play a key role as we continue down the path as an energy superpower creating more American jobs, providing much­ needed federal and local government revenue, and enhancing our nation 's energy security.

The senators urge an “equitable distribution of revenues to states supporting” offshore production to fund needed energy infrastructure and coastal protection:

These investments are vital to the continued productivity of the Federal OCS, as it is the states along the coast who house the workers, the resupply ports and the pipeline networks needed to produce this energy, whether traditional or renewable, and move it to market. With over $7 billion sent each year to the Federal treasury and billions more expected, it is both fair and forward thinking to use a portion of these revenues to support the coastal states who host this energy production for our country.

As the lawmakers say, offshore development is important to sustaining and growing America’s energy revolution. While U.S. oil and natural gas production has surged ahead in recent years, virtually all of the growth is occurring on state and private lands. Increased offshore access will create jobs, boost the economy and strengthen America’s status as an energy superpower.