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Andy Radford's remarks at press briefing on beginning of 5-year offshore plan development

Press briefing on beginning of 5-year offshore plan development
Andy Radford, API senior policy advisor for offshore
Friday, June 13, 2014

Opening statement as prepared for delivery:

Good morning.

The United States has a long and successful history of producing oil and natural gas offshore, but the federal government has largely chosen to restrict activity to the western and central Gulf of Mexico and select areas in Alaska.

These restrictions keep 87 percent of federal offshore waters locked away – along with the potential to develop the vast energy resources they contain.

The Interior Department will soon begin the important process of developing the government’s next five year plan for offshore lease sales, which will take effect in 2017. Decisions made now, especially in unexplored areas, will have impacts well into the future.

Knowing this, the department should thoroughly analyze the resource-rich areas of interest throughout the entire U.S. Outer Continental Shelf and draft an expansive leasing plan that maintains current leasing areas and seeks to unlock new areas that are currently off-limits, such as the Atlantic and the eastern Gulf of Mexico.

The U.S. recently became the world’s largest producer of oil and natural gas. This energy renaissance has put millions of Americans to work, generated billions of dollars in revenue for the government, and put downward pressure on prices for consumers.

But earlier this month, the International Energy Agency reported that we could fall behind OPEC countries if U.S. production plateaus, which IEA says could result in “tighter and more volatile oil markets” and add $15 per barrel to the price of oil.

Growing U.S. production has dramatically increased our resistance to energy shocks, but our long-term energy security can only be ensured with a lasting commitment to expanding oil and natural gas development both on and offshore.

For the offshore, that commitment starts with the next five year leasing plan.

Pro-development energy policies that allow oil and natural gas development in areas that are currently off-limits could generate more than 1 million new jobs and 4 million additional barrels per day in under 10 years, according to one study by Wood Mackenzie.

Offshore specifically, Quest Offshore Resources recently concluded that development in the Atlantic could create nearly 280,000 new jobs along the East Coast and across the country, grow our economy by up to $23.5 billion per year, and add 1.3 million barrels of oil equivalent per day to U.S. production. That equals about 70% of current production from the Gulf of Mexico.

Jobs and government revenue are also locked away with large energy reserves in the Pacific and eastern Gulf of Mexico, totaling over 200,000 jobs, $218 billion and 2.6 million barrels per day according to Wood Mackenzie.

Including these areas in the next leasing plan would send a signal to the markets and to the world that America’s oil and natural gas renaissance is here to stay.

Accessing this bounty is also safer now than ever before. In the last four years, the oil and natural gas industry has worked both independently and with the regulators to enhance the safety of offshore operations.

As the co-chairs of the national spill commission formed after Macondo recently said, offshore development is safer today because industry and the government have enhanced spill prevention, containment and response, revised existing standards and regulations and created new ones, and worked hard to foster a strong industry safety culture.

The Center for Offshore Safety in Houston continues to work with companies and the regulators to engrain safety culture even more deeply into day-to-day operations. And if an incident does occur, state-of-the-art well containment technology can now be rapidly deployed from strategically placed locations.

While the administration works to develop the next five year offshore leasing plan, it should also act quickly to issue permits for the collection of new seismic survey data in the Atlantic.

Seismic surveys are the best way to safely explore for oil and natural gas offshore, and technological advances in the three decades since the last surveys occurred in the Atlantic have made existing estimates of potential energy resources in the area out of date.

To avoid discouraging much needed seismic exploration, the operational permit requirements must be based on the best available science and the real operational experience we have, which continue to show that seismic surveys are safe and have little-to-no impact on marine mammal populations.

America’s oil and natural gas renaissance has nurtured our economy with good jobs, affordable energy, and stable prices, but if we want these benefits last for the long-term, we cannot afford to make short-sighted decisions about our energy future.

The U.S. has an unprecedented opportunity to be the global leader in energy for decades to come, but achieving our true potential will take leadership and foresight from those in government who hold the key to accessing our offshore energy reserves.

The time has come to open the lock and allow safe and responsible energy production throughout the U.S. Outer Continental Shelf.

Thank you again for your time, and I will now take your questions.