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Press briefing on the BOEM 2017-2022 five year plan Erik Milito, API director upstream and industry operations

Press briefing on the BOEM 2017-2022 five year plan 
Erik Milito, API director upstream and industry operations 
Tuesday, April 26, 2016 

Opening statement as prepared for delivery

Good afternoon, all. Thank you for joining today’s call to discuss the importance of ensuring the Department of Interior continues to offer the maximum offshore acreage allowed as the 2017-2022 five year program is finalized. 

The five year program up for discussion at today’s public meeting here in Washington, D.C., proposes lease sales so that industry can continue to develop the plentiful oil and natural gas resources available in these areas, and their significance for the nation’s future cannot be overlooked.

In fact, a majority of the more that 1.1 million comments submitted on the draft proposed program were supportive of increased offshore exploration and production opportunities and underscored the importance of future oil and natural production to fuel our economy, increase job opportunities and strengthen our national security.

In 2010, over 30 percent of the oil and 11 percent of the natural gas produced in the United States was produced in the Gulf of Mexico. According to the EIA, Gulf of Mexico production is estimated to increase to record high levels in 2017. This increase in production is a result of the leasing decisions made a decade or more ago.

Long-lead times are needed for offshore development, especially in frontier areas. For this reason, current oil and natural gas prices should not factor into BOEM’s lease sale planning in the next decade. In fact, BOEM agrees. Within the BOEM’s Proposed Program Decision Document, the agency states: “there is no reason to exclude any of the proposed program areas in the Proposed Program Options based purely on the price of oil and gas.”  

The EIA data shows that the industry has the ability to plan ahead and develop innovative technologies to meet all U.S. energy needs. The U.S. needs energy policies to match.

Unfortunately, and despite strong statewide public support for offshore development in North Carolina (64 percent), South Carolina (67 percent) and Virginia (65 percent), the proposed program does not call for expanded development off the Atlantic Coast.

These recent statewide polls show that American voters get it: Energy security depends on our ability to produce domestic oil and natural gas. The administration should not exclude additional areas or reduce the number of proposed lease sales. Too many promising areas, like the Atlantic, are already excluded, taking off the table hundreds of thousands of potential jobs and tens of billions of dollars in government revenue that more forward-looking policy would support.

Increases in U.S. production have dramatically increased our resistance to energy shocks, but our long-term energy security can only be ensured with a lasting commitment to expanding offshore oil and natural gas development to new areas.

In the Arctic, the U.S. has large oil and gas potential where expanded access could contribute significantly to meeting future U.S. and global energy needs. The majority of the U.S. Arctic potential is undiscovered and offshore, in relatively shallow water depths of less than 100 meters.

The technology to explore for and develop the majority of this is available today, based on a long history of technology development and partnerships already applied in the U.S. and global Arctic. There have also been significant recent U.S. led technology advances in oil spill prevention and response. Application of these technologies in the U.S. Arctic would improve environmental stewardship and reduce costs.

Thanks to this industry-led dedication to constant improvement, the United States is leading the world in oil and natural gas production as well as in reduced emissions, which are near 20-year lows.

Increased energy production and achieving climate goals are not mutually exclusive. This example by the private sector has also allowed the industry to keep energy reliable and affordable for consumers.

Other nations, such as Russia, are moving forward with Arctic economic development.

We will be submitting our comments during this public process and, as we’ve repeated over the long, thorough discussion leading up to these hearings, the oil and natural gas industry is poised to continue its role in responsibly delivering reliable, affordable oil and natural gas to meet American energy demands and support the nation’s role as a global energy leader.

Last year, API joined in submitting such comments to BOEM with the National Ocean Industries Association, the Independent Petroleum Association of America, the U.S. Oil and Gas Association, the American Exploration & Production Council, the International Association of Geophysical Contractors, the Petroleum Equipment and Services Association and the Alaska Oil and Gas Association.

Safe and responsible offshore energy development is occurring and generating important energy and economic benefits for the country.

The Obama administration should carefully consider America’s long-term energy needs because these decisions will impact the availability of affordable energy for American consumers and the country’s national security for decades to come.