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Providing coverage of Alaska and northern Canada's oil and gas industry
October 2008

Vol. 13, No. 41 Week of October 12, 2008

Congress removes 26-year ban on offshore exploration; oil from offshore years away

A quarter-century ban on offshore exploration off the Atlantic and Pacific coasts expired Oct. 1, but don’t expect to see a chain of drilling platforms from the beaches anytime soon.

It will take a couple of years, at least, before any oil or natural gas leases are issued, years more before any oil is found and perhaps a decade before any of it begins to flow to refineries.

And what if Congress, after completing a bill Sept. 27 that removes the freeze, changes its mind next year and again puts some of the coastal waters off-limits?

For 26 years, Congress has issued an annual directive barring the Interior Department from issuing any leases for oil and gas drilling in federal waters on both coasts.

The prohibition has blocked access by energy companies to what the government estimates to be 18 billion barrels of recoverable oil and 76 trillion cubic feet of natural gas beneath the country’s Outer Continental Shelf.

Next president biggest factor

Who wins the Nov. 4 presidential election is the biggest factor.

The Interior Department, directed by the White House, will have wide discretion over where leases will be made available and how soon. The Bush administration and the industry already were trying to speed up the leasing process to include off-limits waters.

The current five-year plan does not expire until 2012. But Interior Secretary Dirk Kempthorne has directed his department to provide the next president “a jump start” toward incorporating some of the newly available offshore waters into the leasing process as soon as possible. The new five-year plan could be in place as early as 2010, with areas that have been off-limits available during the 2010-2015 period.






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