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Vol. 14, No. 7 Week of February 15, 2009
Providing coverage of Alaska and northern Canada's oil and gas industry

Think again on OCS plan

Salazar extends the public review period for the draft 5-year leasing program

Alan Bailey

Petroleum News

Less than a month ago the outgoing Bush administration threw down an energy gauntlet to the incoming Obama administration by announcing a proposed new outer continental shelf oil and gas leasing program covering the years 2010 to 2015. And the new administration has picked up that gauntlet by extending the public review period for the proposed program by 180 days, with the intention of gathering more information and expanding the discussion of offshore leasing to encompass renewable energy and the need for a national energy plan.

“Today I am once again taking steps to change the way that the Department of the Interior does business so that we can fulfill President Obama’s commitment to make government that is open, inclusive and makes decisions based on sound science and the public interest,” said Secretary of the Interior Ken Salazar Feb. 10 when announcing the extended review period.

In July the then Secretary of the Interior Dirk Kempthorne announced that the U.S. Minerals Management Service would be developing a new five-year oil and gas leasing program that would overlap with the current OCS leasing program’s timeframe of 2007 to 2012. The announcement came hard on the heels of President Bush lifting an executive ban on oil and gas leasing in many areas of the outer continental shelf.

Then on Jan. 16, a few days before the inauguration of President Obama, MMS published the draft new 2010 to 2015 lease sale program. That program included planned lease sales in areas offshore the Lower 48 that had previously been subject to the executive ban, as well as an area in the eastern Gulf of Mexico that is still subject to a congressional moratorium. The program included lease sales on much of the outer continental shelf off the U.S. East Coast.

Accelerated process

Under the regular process for developing a new five-year oil and gas lease sale program, MMS would not have to finalize a new program until 2012, Salazar said.

“The Bush administration’s midnight action accelerated by two years the regular process for creating a new plan for the outer continental shelf,” Salazar said. “It opened up the possibility for oil and gas leasing along the entire eastern seaboard, portions of offshore California and the far eastern Gulf of Mexico. There was almost no consideration of state, industry and community input, and in the case of the Atlantic coast, the very limited information about the nature of the offshore energy resources.”

And public comments on the program were required by March 23.

“In my view it was a headlong rush of the worst kind,” Salazar said. “It was a process rigged to force a hurried decision based on bad information.”

Salazar has now extended the public review period into September.

“This additional time will give the states, stakeholders and affected communities the opportunity to provide input on the future of our offshore areas,” Salazar said. “The additional time will also allow us to restore an orderly process to our offshore energy planning program.”

And Salazar has instructed the U.S. Geological Survey and MMS to provide within 45 days a report on potential energy resources on the U.S. outer continental shelf, including both conventional and renewable energy. That report will pull together existing information about offshore resources, as well as identifying where there are gaps in that information.

“We will begin this orderly process by gathering better information about what resources may be available on the outer continental shelf,” Salazar said.

Four meetings

Following the publication of the USGS-MMS report, DOI will convene meetings in Alaska, on the Pacific coast, on the Atlantic coast and on the coast of the Gulf of Mexico to gather ideas on how to move forward with energy development on the outer continental shelf.

“I will be asking all interested parties, including the oil and gas industry, including governors, including the environmental community, a simple question: ‘What are your recommendations on how we define the future of the OCS to incorporate changes in the five-year plan?’” Salazar said.

And as part of a push towards the use of renewable energy sources, DOI will publish a final rule for offshore renewable resources within the next few months. The Bush administration was so intent on opening up areas for offshore oil and gas development that it torpedoed offshore renewable energy efforts, Salazar said.

“I intend to do what the previous administration failed to do and that’s to build a framework for offshore renewable energy development, so that we incorporate the great potential for wind, wave and ocean current energy into our offshore energy strategy,” he said.

U.S. Energy plan

The steps that DOI is now taking in relation to the five-year offshore leasing program form part of a wider goal of the Obama administration to develop a U.S. energy plan that includes a broad array of energy sources and that will eventually lead to U.S. energy independence while also addressing climate change, Salazar said.

On the other hand, Salazar sees a continuing need for oil and gas. And the existing 2007 to 2012 outer continental shelf oil and gas leasing program will remain in operation.

“The energy contribution that is made by the oil and gas companies that are exploring … and developing in the Gulf coast is very much something that we welcome, and there may in fact be additional areas where we need to develop those resources,” Salazar said. “But as we move forward, we need to have a portfolio of energy resources that really is going to bring about the independence that we want, and that will include what we can do with renewable energy, it will include what we can do with conservation, and it will include what we can do with the advanced technologies.”

Salazar said that the United States “has slept for 30 years” since President Nixon first coined the term “energy independence” in the wake of the formation of the Organization of Petroleum Exporting Countries. But national security, the need for environmental security in the face of global warming, and huge opportunities for domestic energy development, are driving the need for the United States to finally move towards that energy independence vision.

“A drill only approach onshore and offshore is not enough,” Salazar said. “We need a comprehensive energy plan that takes us to the new energy frontier that America so much desires. And we need to secure the energy independence of the United States of America with a broad portfolio of energy supplies.”



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