Guest post by David Middleton
The plan is to open almost everything in the 2019-2024 OCS Oil and Gas Leasing Program, with Eastern Gulf leasing beginning when the Congressional moratorium expires after 2022.
Secretary Zinke Announces Plan For Unleashing America’s Offshore Oil and Gas Potential
Draft Proposed Program considers nearly the entire U.S. Outer Continental Shelf for potential oil and gas lease sales
WASHINGTON – U.S. Secretary of the Interior Ryan Zinke today announced the next step for responsibly developing the National Outer Continental Shelf Oil and Gas Leasing Program (National OCS Program) for 2019-2024, which proposes to make over 90 percent of the total OCS acreage and more than 98 percent of undiscovered, technically recoverable oil and gas resources in federal offshore areas available to consider for future exploration and development. By comparison, the current program puts 94 percent of the OCS off limits. In addition, the program proposes the largest number of lease sales in U.S. history.
“Responsibly developing our energy resources on the Outer Continental Shelf in a safe and well-regulated way is important to our economy and energy security, and it provides billions of dollars to fund the conservation of our coastlines, public lands and parks,” said Secretary Zinke. “Today’s announcement lays out the options that are on the table and starts a lengthy and robust public comment period. Just like with mining, not all areas are appropriate for offshore drilling, and we will take that into consideration in the coming weeks. The important thing is we strike the right balance to protect our coasts and people while still powering America and achieving American Energy Dominance”
Earlier this year, 155 Members of both the U.S. House of Representatives and the U.S. Senate sent letters to Secretary Zinke in support of a new 5-year plan that recognizes America’s potential for energy dominance.
The Draft Proposed Program (DPP) includes 47 potential lease sales in 25 of the 26 planning areas – 19 sales off the coast of Alaska, 7 in the Pacific Region, 12 in the Gulf of Mexico, and 9 in the Atlantic Region. This is the largest number of lease sales ever proposed for the National OCS Program’s 5-year lease schedule.
“By proposing to open up nearly the entire OCS for potential oil and gas exploration, the United States can advance the goal of moving from aspiring for energy independence to attaining energy dominance,” said Vincent DeVito, Counselor for Energy Policy at Interior. “This decision could bring unprecedented access to America’s extensive offshore oil and gas resources and allows us to better compete with other oil-rich nations.”
Release of the DPP is an early step in a multi-year process to develop a final National OCS Program for 2019-2024. Today’s draft proposal was informed by approximately 816,000 comments from a wide variety of stakeholders, including state governments, federal agencies, public interest groups, industry, and the public. Before the program is finalized, the public will have additional opportunities to provide input. The 2017-2022 Five Year Program will continue to be implemented until the new National OCS Program is approved.
“This plan is an early signal to the global marketplace that the United States intends to remain a global leader in responsible offshore energy development and produce affordable American energy for many decades to come,” said Katharine MacGregor, Principal Deputy Assistant Secretary for Land and Minerals Management. “This proposed plan shows our commitment to a vibrant offshore energy economy that supports the thousands of men and women working in the offshore energy industry, from supply vessels to rig crews.”
Inclusion of an area in the DPP is not a final indication that it will be included in the approved Program or offered in a lease sale, because many decision points still remain. By proposing to open these areas for consideration, the Secretary ensures that he will receive public input and analysis on all of the available OCS to better inform future decisions on the National OCS Program. Prior to any individual lease sale in the future, BOEM will continue to incorporate new scientific information and stakeholder feedback in its reviews to further refine the geographic scope of the lease areas.
“American energy production can be competitive while remaining safe and environmentally sound,” said Acting BOEM Director Walter Cruickshank. “Public input is a crucial part of this process, and we hope to hear from industry groups, elected officials, other government agencies, concerned citizens and others as we move forward with developing the 2019-2024 National OCS Program.”
The Outer Continental Shelf Lands Act requires the Secretary of the Interior, through BOEM, to prepare and maintain a schedule of proposed oil and gas lease sales in federal waters, indicating the size, timing, and location of leasing activity that would best meet national energy needs for the five-year period following Program approval. In developing the National OCS Program, the Secretary is required to achieve an appropriate balance among the potential for environmental impacts, for discovery of oil and gas, and for adverse effects on the coastal zone.
BOEM currently manages about 2,900 active OCS leases, covering almost 15.3 million acres – the vast majority in the Gulf of Mexico. In fiscal year 2016, oil and gas leases on the OCS accounted for approximately 18 percent of domestic oil production and 4 percent of domestic natural gas production. This production generates billions of dollars in revenue for state and local governments and the U.S. taxpayer, while supporting hundreds of thousands of jobs.
Gulf of Mexico:
The DPP includes 12 sales in the Gulf of Mexico, one of the most productive basins in the world and where oil and gas infrastructure is well established. The draft proposal continues the current approach to lease sales in the Gulf of Mexico by proposing 10 biannual lease sales in those areas of the Western, Central, and Eastern Gulf of Mexico that are not subject to Congressional moratorium or otherwise unavailable, and two sales in the portions of the Eastern and Central Gulf of Mexico after the expiration of the Congressional moratorium in 2022. This is the first time the majority of the Eastern GOM Planning Area would be available for leasing since 1988.
The DPP proposes 19 lease sales in the Alaska Region (3 in the Chukchi Sea, 3 in the Beaufort Sea, 2 in Cook Inlet, and 1 sale each in 11 other program areas in Alaska). These 11 program areas consist of the Gulf of Alaska, Kodiak, Shumagin, Aleutian Arc, St. George Basin, Bowers Basin, Aleutian Basin, Navarin Basin, St. Matthew-Hall, Norton Basin, and Hope Basin. No sales are proposed in the North Aleutian Basin Planning Area that has been under Presidential withdrawal since December 2014.
The DPP proposes 7 lease sales in the Pacific Region (2 each for Northern California, Central California, and Southern California, and 1 for Washington/Oregon). There have been no sales in the Pacific Region since 1984. Currently there are 43 leases in producing status in the Southern California Planning Area.
The DPP proposes 9 lease sales in the Atlantic Region (3 sales each for the Mid- and South Atlantic, 2 for the North Atlantic, and 1 for the Straits of Florida). There have been no sales in the Atlantic since 1983 and there are no existing leases.
Trump aims to open nearly all federal waters to offshore drilling in biggest lease sale ever
- The Trump administration announced Thursday a draft proposal to offer offshore blocks to oil and gas drillers in almost all of the U.S. outer continental shelf.
- The plan opens the door to drilling in the Atlantic and Pacific oceans, marking a break with previous administrations.
- The proposal faces challenges from coastal governors and an uncertain oil price environment that could keep many drillers from bidding for blocks in uncharted territory.
The Trump Interior Department announced Thursday plans to offer blocks in the Arctic, Atlantic and Pacific oceans for oil and gas exploration in an ambitious new five-year offshore lease plan.
Interior Secretary Ryan Zinke said the draft proposal for offshore leasing between 2019 and 2024 would offer about 90 percent of the U.S. outer continental shelf, the largest lease sale ever. The only area that will not be included is the North Aleutian Basin in Alaska.
The plan would open the door for drilling in areas far beyond the U.S. epicenter of offshore drilling in the central and western Gulf of Mexico, giving oil and gas companies the opportunity to explore areas left out of leases for decades.
But the move also sets up a battle with environmental groups and coastal governors opposed to drilling off the shores of states from California to North Carolina. Additionally, it comes at a time when oil prices are on the rise, but stuck in a range that makes multibillion-dollar projects in new offshore areas unattractive for many drillers.
It would also overturn indefinite bans on drilling in much of the Arctic Ocean and parts of the Atlantic announced during the final days of the Obama administration, potentially sparking a court battle over executive authority.
The administration’s expansive lease schedule was widely anticipated.
In April, Trump signed the America First Offshore Energy Executive Order instructing Zinke to revise the current five-year schedule for leasing blocks of the U.S. outer continental shelf, the waters off the U.S. shore that the federal government governs. At the time, he explicitly said it reversed the Obama administration’s ban on Arctic leases.
The drilling regulation rollbacks and modifications are not nearly as significant as portrayed by the lamestream media; but they are certainly a step in the right direction.
BSEE Proposes Revisions to Production Safety Systems Regulations
WASHINGTON – In response to a Presidential Order to reduce undue burden on industry, the Bureau of Safety and Environmental Enforcement (BSEE) completed a comprehensive review of the Production Safety Systems regulations. The proposed regulations will be published Friday in the Federal Register. The announcement describes the proposed revisions and invites public comment on the proposal.
“I am confident that this revision of the Production Safety Systems Rule moves us forward toward meeting the Administration’s goal of achieving energy dominance without sacrificing safety,” said Director Scott A. Angelle. “By reducing the regulatory burden on industry, we are encouraging increased domestic oil and gas production while maintaining a high bar for safety and environmental sustainability.”
The Production Safety Systems Rule addresses safety and pollution prevention equipment, subsea safety devices and safety device testing for the production of oil and gas resources on the U.S. outer continental shelf (OCS). The proposed amendments address provisions of the regulations that create an unnecessary burden on operators, while providing the same level of safety and protection of the environment. BSEE’s initial regulatory impact analysis estimates that the proposed amendments would reduce industry compliance burdens by at least $228 million over 10 years.
“It’s time for a paradigm shift in the way we regulate the OCS,” Angelle said. “There was an assumption made previously that only more rules would increase safety, but ultimately it is not an either/or proposition. We can actually increase domestic energy production and increase safety and environmental protection.”
One out of every six barrels of oil produced in the United States is produced on the OCS. Annual production on the OCS totals over 550 million barrels of oil and 1.3 trillion cubic feet of natural gas. BSEE permits operations and conducts inspections on approximately 2,400 production platforms located in the three OCS regions: Arctic, Gulf of Mexico, and Pacific.
Stakeholders can view and provide comment on the proposed amendments to the Production Safety Systems Rule via regulations.gov, the federal government’s official rulemaking portal. The proposed regulations are also available here. The public comment period for will remain open for 30 days.