DOI starts on new OCS leasing program

The 2010 to 2015 leasing program can apply to the whole U.S. OCS but leasing in some areas would require congressional approval

Alan Bailey

Petroleum News

Secretary of the Interior Dirk Kempthorne announced July 30 that the U.S. Department of the Interior is starting the development of a new five-year oil and gas leasing program for the U.S. outer continental shelf. The program will span the years 2010 to 2015, a time period that overlaps the current OCS leasing program’s timeframe of 2007 to 2012.

DOI said that the start of program development could give the next administration a two-year head start in expanding energy production from federal offshore lands — the Outer Continental Shelf Lands Act Amendments of 1978 give the secretary of the Interior the authority to develop out-of-cycle leasing programs.

“When our current five-year program for outer continental shelf oil and gas leasing was launched in July 2007, oil was selling for $64 a barrel,” Kempthorne said. “Today a barrel of oil costs more than $120, almost double the price a year ago. Clearly, today’s escalating energy prices and the widening gap between U.S. energy consumption and supply has changed the fundamental assumptions on which many of our decisions were based.

“Areas that were considered too expensive to develop a year ago are no longer necessarily out of reach based on improvements to technology and safety. The American people and the president want action and this initiative can accelerate an offshore exploration and development program that can increase production from additional domestic energy resources.”

The announcement comes in the wake of President Bush lifting an executive ban on oil and gas leasing in many areas of the continental shelf. However, any leasing in areas subject to congressional withdrawal would require congressional action. The president has also urged Congress to enact legislation that would give states involvement in offshore oil and gas operations, DOI said.

“The president believes coastal states should have a voice in how outer continental shelf resources are developed off their shores while ensuring those environments are protected. Also, Congress should provide a way for the federal government and states to participate in revenue sharing from those new leases,” Kempthorne said.

The U.S. Minerals Management Service is starting the multi-year process to develop the new leasing program with a call for information about what that program should take into account. MMS is requesting comments to ensure consideration of all concerns regarding oil and gas leasing, exploration and development that result from the new program — the Outer Continental Shelf Lands Act Amendments require several rounds of public comment and multiple environmental reviews for out-of-cycle leasing programs, DOI said.