Energy Tomorrow Blog
Posted October 24, 2019
As the New York Times launches another attack on congressionally mandated support for U.S. offshore development in the Gulf of Mexico, some facts are in order:
The Deep Water Royalty Relief Act enacted by Congress in 1995 was designed to help spur deep water offshore production as the U.S. faced increasing dependence on imported oil – and the courts found that its intent is clear. Background on the act here and here.
The false claim that there is a royalty relief “loophole,” asserted by the Times and others, omits the fact that between 2000 and 2018 natural gas and oil companies paid more than $122 billion to the government in high bids, royalties and rents. Add to that tens of billions the industry spent to develop those leases, creating jobs and boosting local and regional economies – an integral part of industry’s $1.3 trillion overall support for the U.S. economy.
Today, U.S. Gulf production is setting records, averaging 1.8 million barrels per day (b/d) in 2018 and expected by the government to reach 1.9 million b/d this year and 2 million b/d in 2020. This production generates millions in revenue-sharing dollars for coastal states, as well as the Land and Water Conservation Fund, which supports state conservation and outdoor recreation projects all across the country.
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.
Posted May 10, 2019
Headlines announcing big oil discoveries in the U.S. Gulf of Mexico (GOM) – such as the Blacktip deepwater find last month – are something we’ve come to expect. Gulf production long has been strategically important to the United States, accounting for 17 percent of total U.S. crude oil production, and it’s easy to take for granted that the basin will just keep producing and producing.
Yet, two recent analyses, IHS Markit’s report for the U.S. Bureau of Ocean Energy Management and a Crystol Energy report, caution that the Central and Western Gulf, currently open to oil and natural gas development, are maturing, having been developed for several decades, and production could begin to decline before long. GOM development must compete globally with other offshore and onshore prospects or face declining interest in exploration, falling investment and decommissioning of critical infrastructure.
Posted July 10, 2018
Offshore energy development works for the states – all of them.
The U.S. Interior Department recently announced that $61.6 million in revenues from offshore oil and natural gas will be distributed to all 50 states, U.S. territories and the District of Columbia – via grants that support state conservation and outdoor recreation projects.Ponder that: You don’t have to be a coastal state; you don’t have to be a producing state. Under the Gulf of Mexico Energy Security Act (GOMESA), everyone benefits from offshore natural gas and oil revenues that are earmarked for Land and Water Conservation Fund (LWCF) grants.
Posted May 16, 2018
For some time we’ve stressed that offshore oil and natural gas production is compatible with a variety of other ocean uses such as fishing and tourism – and most significantly, with the U.S. military’s need for open-water areas to conduct training exercises, advanced weapons testing and the like. Industry has a long track record of developing offshore energy in a manner that successfully coexists with the military’s needs in the Gulf of Mexico and other areas.
The same would be true in the Eastern Gulf of Mexico if a moratorium on offshore development there, in place since 2006, is allowed to expire in 2022 – creating access to key new areas for safe exploration and development of strategically important oil and natural gas. A new analysis by the Defense Department agrees.
Posted May 2, 2018
The most recent federal Gulf of Mexico oil and natural gas lease sale was described in some media reports as “disappointing,” “modest” and “tepid.” But there’s another, more positive way to look at it.
First, every offshore lease sale the federal government holds is welcome by industry, because each represents new opportunity for the market to work as it should – with companies making investment decisions based on the potential for significant natural gas and oil production.
A more important point underscored with the Gulf sale is one we’ve been making for some time – that the federal government needs to make available new offshore areas for study, research, exploration and development.
Posted March 6, 2018
Since Interior Secretary Ryan Zinke proposed opening most of the nation’s outer continental shelf to offshore leasing, we keep getting asked whether offshore energy development can coexist with tourism and fishing?
The answer is absolutely yes. And there’s a pretty good case study backing that up: The Gulf of Mexico.
While surging onshore oil and natural gas production have grabbed headlines the past few years, oil and natural gas production in the Gulf continues to play a critical role in meeting the nation’s energy needs.
Posted August 18, 2017
Here’s the case for expanded opportunity within a new offshore oil and natural gas leasing program that federal officials are assembling: Safely developing American oil and natural gas on the outer continental shelf (OCS) is vital to the United States’ long-term energy and national security; we need new access to offshore areas, such as the Eastern Gulf of Mexico. Including them in the federal five-year plan will allow surveying to determine the location and size of oil and gas reserves; safe oil and natural gas production on the OCS could significantly boost local, regional and state economies; and advanced technologies, strong industry standards and a robust regulatory system work effectively together to protect workers, communities and the environment.
Posted May 1, 2017
Last week’s presidential executive order embracing increased access to America’s offshore natural gas and oil reserves jumpstarts an important conversation about the needed, positive steps to make the United States’ energy future more secure. With 94 percent of federal offshore acreage currently off limits to development, there are more questions about that future than if safe offshore access was the rule instead of the exception to the rule. The president’s order begins the process of changing the offshore equation. API Upstream Group Director Erik Milito talked about the offshore executive order and the need to build on it during a conference call with reporters.
Posted April 28, 2017