American Oil and Gas Reporter - April 2016 - 119

Outer Continental Shelf

DOI On Atlantic Leasing: Never Mind
WASHINGTON-Like Lucy in a
Peanuts cartoon yanking back a football
before Charlie Brown can kick it, the
Obama administration is withdrawing
preliminary plans it offered last year to
open some areas off the Atlantic Coast
to oil and gas leasing.
The Department of Interior acknowledges its Bureau of Ocean Energy Management is nixing the possibility of Atlantic
lease sales in a March 15 press release announcing its Outer Continental Shelf Oil
and Gas Leasing Program for 2017-22, in
which it proposes 10 potential sales in the
Gulf of Mexico and three off the coast of
Alaska. According to DOI, it killed the
Mid- and South-Atlantic proposed sales
from its draft proposal after weighing numerous factors and extensive public input.
"We heard from many corners that
now is not the time to offer oil and gas
leasing off the Atlantic Coast," states Interior Secretary Sally Jewell. "When you
factor in conflicts with national defense,
economic activities such as fishing and
tourism, and opposition from many local
communities, it simply doesn't make
sense to move forward with any lease
sales in the coming five years."
DOI notes that the proposed program
includes 10 sales in the Gulf, suggesting
two annual lease sales that include all the
Western, Central and the portion of the
Eastern Gulf not subject to moratoria. The
agency describes the shift to two annual
sales as more flexible for Gulf investment
than the traditional approach of single and
separate sales in the Western Gulf and
Central Gulf each year. The Arctic portions
of the proposed program evaluate one potential sale each in the Chukchi Sea, Beaufort Sea and Cook Inlet planning areas.
BOEM also indicates it has deemed
several areas in Alaska and one in the
Gulf of Mexico to be environmentally
important areas (EIAs), for which it is soliciting further information and comment
about whether those areas warrant mitigation measures or exclusion from leasing.
The bureau adds that although an area
included in the proposed program still
may be removed before the program's
finalization, areas not included in the
proposed program cannot be added. DOI's
March 15 press release indicates that
aside from deleting the Atlantic acreage
and the EIA designations, the proposed
program follows the draft proposed program BOEM published in January 2015.

Poor Politics, Minimal Merit
Oil and gas advocates have not been
the only voices to pan the administration's
move. An editorial in the Baton Rouge
Advocate notes how the proposed leasing
schedule contradicts Obama's campaign
rhetoric in 2012, when the president touted
the country's growing energy output. The
piece observes that although BLM depicts
withdrawal of the Atlantic OCS as a nod
to public sentiment, that seems to ignore
a significant portion of the public.
"We think this policy reversal is both
shortsighted and politically very strange,"
The Advocate describes. "Backers of Atlantic
drilling include not only Republicans, but
Democrats; it has support from governors
of the coastal states of Virginia, North and
South Carolina, and Georgia. While some
politicians of both parties line up on different
sides of the question, one of the backers of
Atlantic drilling used to be Obama."
National Ocean Industries Association
President Randall Luthi also says the
decision ignores pro-development opinions.
"Several polls have indicated repeatedly
that a majority of residents in the Atlantic
states favor exploration and drilling off
their coasts," he reports. "Various state and
local elected officials and stakeholder groups
across a wide array of industries, such as
manufacturing and agriculture, support the
safe exploration and production of offshore
oil and natural gas in the Atlantic.
"In addition, there is longstanding bipartisan and bicameral support in Congress
for offshore development," Luthi points
out. "For the president to unilaterally ignore
those wishes, and instead cater to a loud
minority, is disappointing and is a prime
example of 'Washington knows best.'"
Groups including the Independent Petroleum Association of America and
American Petroleum Institute fault the
decision as a matter of policy.
IPAA observes that federal minerals belong not only to policymakers and anti-development activists, but every American.
The group also points to the significant lag
between a lease sale and potential development. "Even if the offshore industry was
able to explore along the East Coast, it
would be a multiyear process with all the
proper planning and environmental controls
in place," comments President Barry Russell.
"Instead, the Obama administration chose
to reverse course and place additional restrictions on these offshore areas, which
takes these opportunities off the table until
at least 2022 and likely beyond."

"The decision appeases extremists
who seek to stop oil and gas production,
which would increase the cost of energy
for American consumers and close the
door for years to creating new jobs and
investments, and boosting energy security,"
assesses API President and Chief Executive Officer Jack Gerard. "This is not
how you harness America's economic
and diplomatic potential."
Heartland Institute Research Fellow H.
Sterling Burnett says the move represents
another volley against the oil and gas industry in the name of global climate. "In
one sense, this is a hollow act. With oil
prices as low as they are, it is unlikely offshore oil and gas development will happen
in the near future," he considers. "But it is
symbolically powerful, showing the continued hostility Obama has to oil and gas
producers in his inane and vain attempt to
control the weather 100 years from now."
Finally, Institute for Energy Research
President Thomas Pyle claims the administration's previous decision to include
the Atlantic Coast areas in the 2017-22
leasing plan was always a feint. "The
president didn't reverse course on his
offshore plan because he never intended
to allow energy production off the Atlantic
Coast," Pyle asserts. "This administration's
energy agenda centers on blocking access
to America's most viable natural resources,
so the fact that he is pulling these offshore
lease sales shouldn't come as a surprise."
Other Factors
DOI also cites feedback it received
from the U.S. Department of Defense as
reason to pull the Atlantic acreage. "DOD's
assessment identifies much of the areas
offshore Virginia, as well as portions of
the program area offshore North Carolina,
South Carolina and Georgia, as areas
that should not be made available for oil
and gas development or where permanent
oil and gas structures should not be
located at this time," Interior says.
Luthi expresses skepticism. "Using
our nation's military to justify this decision
is a red herring," he maintains. "Military
and oil and gas activities have coexisted
for years in the Gulf of Mexico. By removing the Atlantic sale, we are saying
the military and industry cannot figure
out a way to make it work. That does not
even come close to passing the red-face
test."
Meanwhile, NOIA also expresses wariness about DOI's use of EIAs in the ArcAPRIL 2016 119

American Oil and Gas Reporter - April 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - April 2016