Wednesday, November 09, 2011

Few Pleased With Administration's OCS 2012-2017 Leasing Program

Nov 8: On November 8, 2011, Department of Interior (DOI) Secretary Ken Salazar announced the Proposed Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2012-2017, which he said makes more than 75 percent of undiscovered technically recoverable oil and gas resources estimated in Federal offshore areas available for exploration and development [See WIMS 11/8/11]. The Proposed Program, which he said is in line with President Obama's direction to continue to expand safe and responsible domestic production, includes six offshore areas where there are currently active leases and exploration, and where there is known or anticipated hydrocarbon potential. The plan schedules 15 potential lease sales for the 2012-2017 period -- 12 in the Gulf of Mexico and three off the coast of Alaska. Industry and environmental interests both appear to be opposed to the proposals and House Republicans were very critical.
    One of the few positive statements came from Senator Lisa Murkowski (R-AK), Ranking Member of the Senate Energy & Natural Resources Committee. Senator Murkowski said, "The lease sales the administration has proposed in the coming five years are a positive sign for our energy security. While the administration has not opened any new areas to leasing, I'm encouraged that they are moving forward with offering sales in both the Beaufort and Chukchi seas. Leasing is only half the story, however. The permitting process will be the determining factor as to whether these lease sales are ultimately successful or not. Any company interested in exploring for oil and gas off the coast of Alaska must have a reasonable expectation that the permitting process will be robust but with a timeline that is not unreasonable. We can't expect companies to invest billions of dollars and then subject them to a permitting process that drags on for years with no end in sight."
    Senator Mary Landrieu (D-LA) said, "I am still reviewing the details of this plan, but I am not yet confident that it is strong enough to meet our nation's energy needs or will help us reduce our dependence on foreign oil. . . areas offshore of Virginia that were included in the previous five-year plan are not part of the current proposal.  This represents a step backward, not forward, for our nation's offshore energy production.  Additionally, if the permitting process continues to move at a glacial pace, there is no way that this plan will meet our energy needs or result in the stepped-up production we require. . ."
    House Natural Resources Committee Chairman Doc Hastings (R-WA) was highly critical of the proposal and called it a 5-year drilling ban on the majority of offshore areas. He said, "After imposing a nearly three-year moratorium on new offshore drilling by discarding the 2010-2015 lease plan that allowed for new development on the Outer Continental Shelf (OCS), the Obama Administration announced a draft plan today that closes the majority of the OCS to new energy production through 2017. The Administration's draft five-year plan prohibits new offshore drilling and only allows lease sales to occur in areas that are already open. The draft plan includes lease sales in the Gulf of Mexico and the Arctic -- leaving portions of Alaska and the entire Atlantic and Pacific Coasts off-limits to new energy production and job creation."

    Rep. Hastings continued, "In 2008, a bipartisan agreement was reached to lift the decades-long ban on new offshore drilling and open new areas off the Atlantic, Pacific and Arctic coasts. Since President Obama took office, he has systematically taken steps to re-impose an offshore drilling moratorium and today he is one step closer to making that a reality for the next five years. The Obama Administration's draft plan places some of the most promising energy resources in the world off-limits and indefinitely abandons the scheduled lease sale off the coast of Virginia that was supposed to take place last year.

"No new drilling or new lease sales will occur during President Obama's term in office -- despite the overwhelming support of the American people for new offshore energy production. The President's plan is to simply say 'no' to new energy production and 'no' to new American jobs created by new offshore drilling. It's a plan that is sending American jobs overseas, forfeiting new revenue, and denying access to American energy that would lessen our dependence on hostile Middle Eastern oil. Developing the United State's offshore resources would create over a million jobs, generate billions in revenue and significantly reduce foreign oil imports. It's been six months since the House has passed bipartisan bills to reverse the Obama moratorium and allow new offshore drilling and the Democrat-controlled Senate has failed to act."

    American Petroleum Institute (API) Group Director of Upstream and Industry Operations Erik Milito said he welcomed the announcement but said it he was disappointed with the "trimmed down" proposal. He said, "Moving forward with the proposed 2012-2017 five-year OCS leasing program is a good first step. However, this is a missed opportunity to open additional areas that could have helped address rising energy demand, create American jobs and reduce the federal deficit.  

    "There is significant public support for policies that expand our domestic energy development, diversify our energy sources, and advance energy technologies. We hope that many more lease sales will follow in the Gulf and in Alaska. And we urge the administration to reconsider its decision to exclude other offshore regions, such as the vast majority of the eastern Gulf of Mexico, offshore Virginia, and elsewhere off of the Atlantic Coast, from lease sales until 2017. Taking these areas off the table at this stage could impede the nation's drive toward enhancing both its economic and energy security. Opening these areas could create additional jobs, enhance our economic growth and energy security, and create a national energy policy that our country needs. Unfortunately, the proposed plan falls short of this approach."  

    API indicated that the proposed program will have sales scheduled in the Central and Western Gulf of Mexico and the Beaufort, Chukchi, and Cook Inlet in Alaska. No sales are scheduled for the Atlantic, Pacific, or Eastern Gulf of Mexico. "Despite our disappointment with this trimmed down leasing program, we will continue to seek more robust offshore lease sales in the future. We are confident such sales will highlight the industry's ability to develop American resources responsibly while spurring the economy."

    Karen Harbert, president and CEO of the U.S. Chamber of Commerce's Institute for 21st Century Energy issued a statement saying they were disappointed and stating, "Today the administration's proposed leasing plan rejected the opportunity to create hundreds of thousands of new jobs in this country by taking yet another step to constrain options for increased domestic energy production. Oil and natural gas production on federal lands continues to decline under this administration, and the new Offshore Oil & Gas Program does not provide much hope that this destructive trend will be reversed anytime soon. We are disappointed that the administration is once again forgoing an opportunity to make our energy future more secure and our economy more competitive. We will continue to call on the president to revise this nearsighted approach and include areas in the mid-Atlantic and eastern Gulf of Mexico that were included in previous versions of the Offshore Oil & Gas Program, as well as preserve the opportunity of greater exploration in the Beaufort and Chukchi Seas off of Alaska."

    Jamie Rappaport Clark, president and CEO for Defenders of Wildlife said, "The Obama administration made the wise decision to protect vast tracts of the country's oceans from oil and gas exploration. However, the inclusion of the Arctic Ocean in the country's five-year drilling plan is indefensible. From the extreme and unpredictable conditions of the region to the lack of a realistic spill response, the risks of a drilling disaster in the Arctic remain too high to authorize exploratory drilling. While the announcement proposes to address these threats by deferring drilling for a handful of years, the only way to protect this fragile marine environment from the threats posed by dangerous oil and gas exploration is to take it off the table altogether. Instead of enabling our country's addiction to oil for five more years, the administration should strengthen its efforts to wean America off dirty fossil fuels, accelerating the transition to a clean energy future."

    Earthjustice attorney Holly Harris issued a statement saying, "Secretary Salazar is right to admit that we need more science and the capacity to clean up an oil spill in the icy waters of the Arctic. For those same reasons, he is wrong to propose new leasing in the Arctic and he was wrong in August to have approved part one of the largest Arctic Ocean drilling proposal in the history of our country. Today's announcement also makes clear the government made a serious mistake last month when it affirmed its decision to lease 2.7 million acres of Arctic Ocean bottom in the Chukchi Sea given Secretary Salazar now acknowledges the need to gain a better scientific understanding of this region before developing oil.

    "The federal government scientists admit big gaps in what they know about the basic features of the Arctic Ocean like where various species of fish and marine mammals live and feed at different times of the year, how ocean currents move and affect the food chain in this ocean and how an oil spill could be stopped and cleaned up under frozen ice. It's hard to imagine a responsible way to develop oil now in this largely unknown body of water when we don't understand what harms we need to avoid or how to avoid them."

    Miyoko Sakashita, oceans director at the Center for Biological Diversity (CBD) said, "Last year's disaster in the Gulf of Mexico was supposed to be a wake-up call about the dangers of offshore drilling, but it looks like President Obama hit the snooze button and slept right through it. We just can't keep expanding offshore drilling and not expect to have more disastrous spills. Gulf of Mexico communities are still reeling from the impacts of last year's oil spill, and now the president wants to put those same communities at risk again. The administration's claiming significant steps have been taken to make drilling safer, but in fact there's been no fundamental reform that can keep the Gulf of Mexico or the Arctic safe from the next spill catastrophe. Polar bears are already teetering at the brink of extinction. Policies that worsen climate change and raise the risk of disastrous oil spills in their habitat will push them over the edge."

    Frances Beinecke, President of the Natural Resources Defense Council (NRDC) said, "Green-lighting more oil drilling under inadequate safety measures is a reckless gamble we cannot afford. The President's Oil Spill Commission put forth a gameplan to improve the industry's safety, but it has yet to be realized. Congress has failed to pass a single law to better protect workers or the environment. Industry has not invested sufficiently in developing the technologies needed to prevent future disasters. And the government still needs additional resources and science in order to effectively police an industry that so desperately needs it. Today, the Gulf region is still struggling to rebuild. This is not the time to put the region at greater risk. Nor is it the time to open the doors to drilling in the treacherous and remote Arctic, which is more than a thousand miles from the closest clean-up crew and home to pristine habitat for a range of endangered species. This is just another distraction from our clean energy future. . ."

    Access a release from Senator Murkowski (click here). Access the statement from Sen. Landrieu (click here). Access a release, maps and chronology from Rep. Hastings (click here). Access a release from API (click here). Access the U.S. Chamber statement (click here). Access a release from Defenders (click here). Access a release from Earthjustice (click here). Access a release from CBD (click here). Access a release from NRDC (click here). Access a release from DOI with multiple links to the proposal details and information (click here). [#Energy/OCS]