Wednesday, December 01, 2010

Salazar Announces Updated Oil & Gas OCS Leasing Strategy

Dec 1: Secretary of the Department of Interior (DOI) Ken Salazar announced an updated oil and gas leasing strategy for the Outer Continental Shelf (OCS). DOI indicated that based on lessons learned from the Deepwater Horizon oil spill, the Department has raised the bar in the drilling and production stages for equipment, safety, environmental safeguards, and oversight. In order to focus on implementing the reforms efficiently and effectively, critical Agency resources will be focused on planning areas that currently have leases for potential future development. As a result, the area in the Eastern Gulf of Mexico that remains under a congressional moratorium, and the Mid and South Atlantic planning areas are no longer under consideration for potential development through 2017. The Western Gulf of Mexico, Central Gulf of Mexico, the Cook Inlet, and the Chukchi and Beaufort Seas in the Arctic will continue to be considered for potential leasing before 2017. 

    Secretary Salazar said, "As a result of the Deepwater Horizon oil spill we learned a number of lessons, most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime. As that regime continues to be developed and implemented, we have revised our initial March leasing strategy to focus and expend our critical resources on areas with leases that are currently active [See WIMS 3/31/10]. Our revised strategy lays out a careful, responsible path for meeting our nation's energy needs while protecting our oceans and coastal communities."

    Consistent with the President's Executive Order on National Ocean Policy, the modified plan also confirms many actions announced in March, including environmental analysis to determine whether seismic studies should be conducted in the Mid and South Atlantic, and rigorous scientific analysis of the Arctic to determine if future oil and gas development could be conducted safely. Lease sales in the Western and Central Gulf of Mexico under the 2007-2012 program are currently scheduled to begin in approximately 12 months, after the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) completes appropriate environmental analyses that take into account effects of the Deepwater Horizon oil spill.

    Analyses and public meetings will also take place to help determine if additional lease sales in these areas should proceed as part of the 2012-2017 program. In connection with new announcement, BOEMRE Director Michael Bromwich stated that he is in the process of completing an agreement with the National Oceanic and Atmospheric Administration (NOAA) through which NOAA will collaborate with BOEMRE in the environmental analyses for OCS planning.

    American Petroleum Institute (API) President and CEO Jack Gerard warned that the Administration's decision could result in the loss of tens of thousands of American jobs, billions less in government revenues and an increasing dependence on foreign energy sources. He said, "As our country looks for ways out of the hole of lackluster economic growth and job creation, today's decision shows that this administration would rather keep digging than take the ladder to increased economic prosperity offered by developing our nation's domestic energy resources."

    He continued saying, "The oil and natural gas industry is a reliable vehicle for growing the economy and creating good-paying jobs. This decision shuts the door on new development off our nation's coasts and effectively ensures that new American jobs will not be realized. It will stifle investment, deny billions in revenue for critical government services and increase our dependence on foreign energy sources. The oil and natural gas industry is committed to safe and environmentally responsible operations, and both the industry and regulators have added new safeguards to ensure such operations.This reversal on new lease sales off America's coasts comes on top of a de facto moratorium, which has all but stopped new drilling in the Gulf of Mexico."

    Peter Lehner, executive director of the Natural Resources Defense Council (NRDC) said, "This action creates a no blow-out zone in the Atlantic and Pacific oceans and the Eastern Gulf. It protects these waters and the millions of Americans who depend upon them from the kind of catastrophic spill still poisoning the Gulf seven months after the BP disaster. It puts drilling off-limits in these areas for at least the next seven years. That's the right thing to do. The administration, though, did not go far enough."

    Lehner continued saying, "Leaving the door open to exploratory drilling, and, potentially, additional lease sales starting in 2012, in the Beaufort and Chukchi seas puts precious Arctic waters and habitat at risk. We don't yet know how to clean up oil in sea ice conditions, where oil breaks down slowly, if at all. These seas are home to one-fifth of the world's polar bears, as well as seals, migratory birds, endangered bowhead whales, beluga whales, walrus and other marine life. Until we know how to protect this region from the risk of a blow-out and how to clean up oil spills in Arctic waters, these areas, too, need to be off-limits to drilling. We are troubled, also, by the prospect of seismic testing in the Atlantic. Not only is such activity a general precursor to future drilling, but the tests themselves typically rely on high-intensity sound likened to undersea warfare. It harms endangered whales and fish on a vast scale. New seismic testing -- anywhere -- should use less-harmful technology and it should not be allowed at all in areas like the Atlantic that are not even being opened to leasing."

    Access a release from DOI with additional information and links to a fact sheet on the announcement, a map of the Revised Lower 48 OCS Oil and Gas Strategy, and a map of the Revised Alaska OCS Oil and Gas Strategy (click here). Access a release from API (click here). Access the complete statement from NRDC (click here).