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3/16/2016 Other
Maritime Executive: Industry Groups Support Contested Offshore Lease Sales

Industry Groups Support Contested Offshore Lease Sales

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By MarEx 2016-03-14 19:06:54

The U.S. Bureau of Ocean Energy Management will offer approximately 45 million acres for oil and gas exploration and development in the Gulf of Mexico in two March lease sales. However, concerns have been raised about the use of some areas by the military and may be reconsidered. The Obama administration is reworking its plan to open the southern Atlantic Coast to offshore oil exploration as it could interfered with naval exercises and missile tests.

Officials from the Bureau of Ocean Energy Management are expected to release an updated proposal relating to waters off the coast of Georgia, North Carolina, South Carolina and Virginia. 

This has drawn criticisms from industry groups. National Ocean Industries Association (NOIA) President Randall Luthi has joined API Group Director of Upstream and Industry Operations Erik Milito and International Association of Geophysical Contractors (IAGC) COO and Executive Vice President Walt Rosenbusch to call for a maximum access 2017-2022 Offshore Leasing Program that includes the Atlantic Outer Continental Shelf.

NOIA Objections

Luthi says: “To remain the world’s leading energy producer, the U.S. needs a two pronged approach. First, a broad range of energy sources, both traditional and non-traditional; and second, a broad geographical location of those resources. The Draft Proposed Plan was a step in that two pronged approach. We encourage Secretary Jewell to stay the course.

“Even with today’s low commodity prices, the oil and natural gas industry is a huge driver of our economy and is vital to our long term energy security; the availability of offshore areas for leasing, exploration and potential development greatly enhance both. Wise energy policies today will enable the offshore oil and gas industry to make key decisions that will accelerate U.S. economic growth and energy security tomorrow.

“With lease sales proposed in the Central and Western Gulf of Mexico, the Cook Inlet and Beaufort and Chukchi Seas in Alaska, and the Mid- and South Atlantic, an area last made available in the 1980s, the 2017-2022 Outer Continental Shelf leasing program holds the potential for increased access to offshore resources and greater economic and energy benefits. Proposed Atlantic Lease Sale 260 could create much needed jobs, investment and economic growth for Virginia, North Carolina, South Carolina and Georgia, and provide tremendous economic, consumer and security benefits to the rest of the country.

“It is important to point out that the Draft Proposed Program effectively keeps about 87 percent of the Outer Continental Shelf locked away. It would be energy-foolish and short sighted to remove more areas from consideration in the upcoming Proposed Program.

“Despite the alarmist and scientifically inaccurate rhetoric of anti-fossil fuel environmental groups, polls show that a majority of Americans support offshore oil and gas production, including, by a two-to-one margin, a majority of the residents of Virginia, North Carolina, South Carolina and Georgia. There is also bipartisan and bicameral support in Congress for the safe exploration and production of America’s offshore energy resources.

“The oil and gas industry is committed to the safest possible offshore operations and, despite claims to the contrary, experience has shown that offshore development in the Atlantic will complement, not detract from, rich tourism and fishing industries. In the Gulf of Mexico the offshore oil and gas industry contributes 20 percent of our domestic oil and natural gas production, alongside a recreational fishing industry that employs about 150,000 along the entire Gulf Coast and contributes over $7 billion to states and local economies. In addition, Gulf Coast communities host tens of millions of visitors each year and support a $20 billion tourism industry. For decades, these industries have coexisted and thrived in the Gulf of Mexico. We have no reason to think the Atlantic would be any different.

“The offshore oil and gas industry has continually demonstrated a commitment to providing tremendous economic and energy benefits for our nation, despite the fact that about 87 percent of U.S. offshore areas are closed to leasing and exploratory activities, and have been for decades. Studies show that opening access to these areas would result in hundreds of thousands of new American jobs, billions of dollars in new private investment and millions more barrels per day of oil and natural gas production; not to mention new revenue to the federal government and to local and state governments, assuming wise policy choices. 

“Oil and natural gas will remain major sources of reliable and affordable energy for the foreseeable future, as the global energy demand grows.  Other nations along the Atlantic Ocean, including Canada, Cuba, Mexico, Greenland, Brazil and Ghana, have recognized the energy and economic opportunities off their own shores and are exploring new offshore areas. We should do the same.”

API Voices Support

Allowing more offshore oil and natural gas development is one of the best ways policy makers can grow the economy, strengthen our energy security and raise more revenue for competing priorities – from education to infrastructure and conservation, according to API Director of Upstream and Industry Operations, Erik Milito. 

“This is American energy security, American jobs, U.S. government revenue and American GDP tied up by political red tape. This is a once in a generation opportunity, stuck, off limits to future generations as it waits for forward-looking energy policy.

“Just today, a petition signed by more than 186,000 concerned citizens from around the country – but mostly from coastal states – is being delivered to Secretary Jewell’s office. More and more Americans will continue to write in support as the discussion continues. More than 500,000 energy voters submitted comments during the previous comment period.

“We’ve seen the benefits of our U.S. energy renaissance. U.S. consumers see it at the gasoline pump and in their home energy bills. Americans read about the positive geopolitical impacts on a daily basis. This is a big opportunity and if the U.S. is to continue the success we’ve seen over the past decade of American energy leadership and our ability to compete on the global market, the time to get it right on energy policy is now.

“Keeping federal offshore acreage off limits to development is not in America’s interests. The revenue generated by offshore oil and natural gas production can help state and local governments afford to develop or upgrade tourist attractions, infrastructure and beach projects. A revenue sharing agreement like the one in effect for states bordering the Gulf of Mexico should also be extended to other coastal states. Every state that hosts oil and natural gas development off its shores should get a fair share of the revenue collected by the federal government.”

IAGC Comments

At a press briefing, Rosebusch said: “The United States is virtually the only nation that is not exploring the resource potential of the Atlantic. The US Atlantic Outer Continental Shelf has been excluded from the five-year planning process for several decades – based in large part on the position that the resource potential was not significant. Those estimates are based on 30-plus-year-old seismic data. Because there have been technological advances in geophysical data acquisition and processing, the existing estimates of are out of date. Exploration and development activities generally lead to increased resource estimates.

“It’s been nearly two years since the BOEM’s announcement to consider authorization of permitting geophysical activities on the Atlantic Outer Continental Shelf. Had the Administration moved forward – granting the authorizations to acquire new seismic data – they would have data that would better define the resource potential on the Atlantic Outer Continental Shelf.

“The geophysical permitting process is rigorous – as it should be. In the instances of the permits for geophysical acquisition on the Atlantic Outer Continental Shelf awaiting approval Virginia, North Carolina, South Carolina and Georgia have all determined that geophysical operations off their coast line is consistent with their individual coastal zone management plans. Geophysical activities can coexist with other activities occurring offshore. Geophysical operations have been taking place in the Gulf of Mexico for several decades – where the commercial and recreational fishing industries and tourism flourish.”

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

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