Offshore Plan a Key to America’s Energy Future

Mark Green
Posted March 14, 2016

Two charts – as the Obama administration prepares to unveil its offshore oil and natural gas leasing program that will guide U.S. offshore energy development from 2017 to 2022:

The above is a snapshot of tremendous U.S. energy potential – potential that’s being limited by Washington red tape, with 87 percent of federal offshore acreage off limits to oil and natural gas development. To ensure the kind of future offshore development that the United States needs to help fuel its economy, to benefit American consumers and to make the U.S. more secure in the world, we must have a robust offshore leasing program now. Chart No. 2:

Here we see the offshore Atlantic that was included in the draft leasing program released by the U.S. Bureau of Ocean Energy Management (BOEM) last year. When BOEM releases its final program, perhaps this week, watch the Atlantic. A decision to keep the Atlantic lease sale in the five-year plan will say volumes about the administration’s view of offshore energy development. Erik Milito, API director of upstream and industry operations, joined representatives of two other organizations on a conference call with reporters to discuss the next leasing program:

“The possible benefits for developing oil and natural gas off of the Atlantic coast are numerous. The most promising areas for development run all the way from the coasts of Maine to Florida. Official government figures project the possibility of nearly 5 billion barrels of oil and over 37 trillion cubic feet of gas contained by this section of the Atlantic Shelf. This is American energy security, American jobs, U.S. government revenue and American GDP tied up by political red tape. This is a once-in-a-generation opportunity, stuck, off limits to future generations as it waits for forward-looking energy policy.”

Milito said domestic energy development, including offshore oil and gas, is critically important to an ongoing U.S. energy revolution that has benefited consumers at the pump and in their home energy bills, while lowering oil imports and increasing American energy security. 

In addition to keeping the Atlantic area in the leasing plan, the plan also should retain the Arctic. As a planning document, it should have included the Pacific and the Eastern Gulf so that those options would be considered for leasing. The Atlantic was the only new area included in BOEM's draft program, underscoring the need to keep it in the finished leasing plan. 

Retaining the Atlantic in the plan would pave the way for needed geologic research to pinpoint the oil and gas resource base there. Milito said the bulk of the data pertaining to the Atlantic outer continental shelf is 30 years old.

The collection of seismic data needed to detail offshore resources and the offshore development itself are safe. Milito:

“Regulators and the industry together have made great strides to enhance the safety of offshore operations in recent years. Industry launched and completed a comprehensive review of offshore safety measures and operations to identify and implement improvements in spill prevention, intervention and response capabilities. The co-chairs of a national spill commission praised these efforts just over a year ago, saying offshore drilling is safer than ever.”

Randall Luthi, president of the National Ocean Industries Association, and Walt Rosenbusch, chief operating officer and executive vice president of the International Association of Geophysical Contractors, joined the call with Milito.

Rosenbusch said seismic testing can be conducted safely in the Atlantic and other regions but said it has been nearly two years since BOEM authorized it there because of permitting delays. Luthi said offshore energy development in the Gulf of Mexico has shown that operations in the Atlantic will complement, not detract from, the tourism and fishing industries. The Gulf accounts for 20 percent of domestic oil and natural gas production, he said, and contributes more than $7 billion to state and local economies. Luthi:

“It is important to point out that the Draft Proposed Program effectively keeps about 87% of the Outer Continental Shelf locked away. It would be energy-foolish and short sighted to remove more areas from consideration in the upcoming Proposed Program.”

Milito and Luthi said offshore development can work in tandem with the needs of the U.S. military. Milito:

“You wouldn’t want to see this Virginia area taken off (the plan) because we haven’t even had a chance to run seismic there … Industry now can drill directionally, they can do a lot on the subsea with subsea completions. So we want to make sure that we don’t take an opportunity off the table without understanding what the geology looks like. Once we know what the geology looks like then we can move forward based on the latest greatest technology, work with the Department of Defense, work with the Interior Department, to come up with the best plan to solve the problems.”

Keeping America’s offshore energy off limits isn’t in the national interest. As Rosenbusch said, the United States is virtually the only nation that isn’t researching the oil and natural gas resource base in the Atlantic. The U.S. energy revolution depends on access, onshore and offshore,  to be sustained and to grow – creating jobs, boosting the economy and generating revenues for government. Milito:

“Protecting and building on the extensive economic and energy security benefits generated by the American energy revolution should be the Obama administration’s top priority in its next five-year leasing plan. We are a forward-looking industry and have hope that American energy policy can say yes to opening the door to more jobs, domestic investment and government revenue through safe and responsible American energy production.”