Offshore Energy and a Strategic Vision for U.S. Security

Sam Winstel
Posted July 17, 2019

Legislation in Congress that could cripple future U.S. offshore energy development needs to be seen for the longer-term damage it could do to America’s strategic energy and national security.

One House bill would permanently extend a moratorium on development in the Eastern Gulf of Mexico; another would permanently bar leasing in the Atlantic and Pacific oceans.

Given projected growth in America’s energy needs, such shortsighted legislation fails the test of leadership in setting energy policy that will enhance and protect our nation’s strategic interests.

In an op-ed for the Wall Street Journal, Jim Webb, former U.S. senator and Navy secretary, and Jim Nicholson, former Veterans Affairs secretary, write that “draconian” restrictions on America’s offshore development will have economic and security costs and that wise decisions must be made now for American security years down the road:

We don’t know what the world will look like 10 years from now. But it would be foolish to take a known and valuable energy resource off the table instead of working cooperatively and safely to ensure the country’s energy needs are met and its national security protected.

The Bureau of Ocean Energy Management estimates that 90.6 billion barrels of oil and 327.5 trillion cubic feet of natural gas remain undiscovered along the Atlantic, Pacific, Gulf and Alaskan coastal regions, though restrictive permitting processes have prevented the use of safe seismic imaging technology to deliver more accurate assessments. Yet 94% of the federal outer continental shelf remains off limits to oil and natural gas development:

These restrictions stand in stark contrast to the proactive ways other nations are pursuing offshore energy, particularly Russia and China. Given that it typically takes seven to 10 years to explore, develop and produce offshore oil and natural gas, U.S. failure to advance safe and responsible development could have strategic consequences. Explore Offshore national co-chairs Webb and Nicholson:

Many economic and strategic competitors are expanding offshore energy exploration. Nearly 30% of global crude oil output comes from offshore production. World-wide natural-gas output from offshore has risen by 50% since 2000. China and Russia are exploring in the Arctic. Saudi Arabia and Norway remain active. Mexico is expanding its activities in the Gulf of Mexico, including a recent lease for exploration by China. Brazil has become a global leader in deep-water production.

The U.S. is currently producing record amounts of oil and gas, strengthening the nation economically and strategically. But we continue to import more than six million barrels of oil a day. The more oil and gas we produce at home, the less we will be required to rely on unstable foreign resources.

Testifying this week during a House subcommittee hearing, former Obama administration Interior Department official David Hayes rejected the notion of America shelving its public oil and natural gas reserves:

“I believe that’s not a good way to go. The reality is that we have a lot of infrastructure on our public lands to produce oil and gas. It’s providing an important contribution to our economy. … I think good points have been made that if there were not oil and gas drilling on our public lands we’d get oil and gas from somewhere else.”   

To be clear, Hayes is no fan of the current administration’s plans to increase access to U.S. oil and natural gas reserves, onshore and offshore. But he is right about the fundamental necessity of energy and our nation’s need to be more energy self-sufficient. Here’s how a Washington Post editorial put it in early 2018:

We have long supported opening more U.S. waters to offshore drilling. As long as the economy requires oil, it must come from somewhere, and better the United States than a country with much weaker environmental oversight. It is arrogant of Americans to benefit from the interconnected global oil market yet insist that their shores remain closed.

We can develop our offshore energy safely and with great care for the coastal and ocean environments. Offshore operations have been strengthened by initiatives such as the Center for Offshore Safety and state-of-the-art technologies and standards, some of which have since been incorporated into federal regulations. The ongoing application of new equipment and standards across the lifecycle of offshore projects enhances worker safety and environmental sustainability and enables the industry to unlock America’s offshore economic potential.

Expanded resource exploration and energy production helps provide accessible and affordable energy for American consumers, thousands of high-paying jobs for U.S. workers and billions of dollars in state tax revenues – and the impacts could be particularly lucrative for states along the Atlantic and Eastern Gulf Coasts. Research demonstrates that, in 20 years, offshore leasing in the Atlantic, Pacific and Eastern Gulf could create nearly 730,000 jobs, generate $150 billion in government revenue and increase domestic production by the equivalent of 4 million barrels of oil per day. And, Alaska alone could add nearly 7,200 jobs and bring more than $21.6 billion into the state’s economy.

Fundamentally, as we’ve been saying, offshore energy development is a strategic issue that impacts America’s future security and prosperity. Now is the time to plan for that future by advancing safe and responsible development today.