American Oil and Gas Reporter - December 2016 - 34

OCS Leasing Plan Disappoints Industry
WASHINGTON-Producer associations
reacted with disappointment to the 201722 Outer Continental Shelf Oil and Gas
Leasing Program announced in November
by the U.S. Department of Interior, referring to it variously as eye-rolling, politically motivated, and a slap in the face.
The proposed final program announced
jointly by Interior Secretary Sally Jewell
and Bureau of Ocean Energy Management
Director Abigail Hopper offers the potential for 10 Gulf of Mexico sales-one
in 2017, two each in 2018, '19, '20 and
'21, and one in 2022-along with one
sale in 2021 in Alaska's Cook Inlet.
As has been the case for recent GOM
lease sales under the 2012-17 program,
BOEM says it intends to combine the
entire Western and Central planning areas,
along with Eastern Gulf of Mexico acreage
not under moratorium, rather than hold
separate sales for each area.
Two Arctic lease sales in the Beaufort
and Chukchi seas proposed in earlier versions of the proposed plan were eliminated
in the final proposed plan. Secretary Jewell
says, "Given the unique and challenging
Arctic environment and industry's declining
interest in the area, forgoing lease sales
in the Arctic is the right path forward."
In its announcement, DOI says its
analysis "identified significant risks to
sensitive marine resources and communities
from potential new leasing in the Arctic."
It adds that it included one sale in the
northern portion of the Cook Inlet Planning
area because it "is a mature basin with a
long history of oil and gas development
in state waters where existing infrastructure
(can) support new activity."
The agency notes that one sale proposed
for the Mid- and South Atlantic Planning
Area in its initial draft released in January
2015 was eliminated in the second draft
proposed program released in March 2016.
Says BOEM Director Hopper, "This
proposal makes available more than 70
percent of the economically recoverable
resources, which is ample opportunity
for oil and gas development to meet the
nation's energy needs."
DOI notes that the secretary may approve
the final 2017-22 program, which may be
viewed at http://www.boem.gov/Five-YearProgram/, after a minimum of 60 days.
The plan then would become effective July
1, 2017.
Politically-Motivated
Oil and gas associations were less than
laudatory. "It is disappointing that this administration has chosen to take the low,
34 THE AMERICAN OIL & GAS REPORTER

politically-motivated path and dictate the
nation's offshore program for the entirety
of President-elect (Donald) Trump's fouryear term," responds Independent Petroleum
Association of America President and
Chief Executive Office Barry Russell.
He adds, "Taking American offshore
energy resources off the table will eliminate
well-paying jobs and reduce the billions of
dollars in revenues that go to fund schools
and road repair projects in local communities.
Locking up our offshore energy supplies
will cause U.S. energy prices to rise, limiting
the amount of hard-earned wages American
families get to keep each month."
National Ocean Industries Association
President Randall Luthi refers to it as
"half a plan. The Obama administration
remains determined to leave a legacy that
keeps much of America's vital offshore
oil and natural gas resources off limits.
The eye-rolling decision to eliminate lease
sales in the Beaufort and Chukchi seas . .
. is a short-sighted political decision that
threatens U.S. energy security, pulls the
rug out from under Alaskans, and is a
slap in the face for consumers."
Luthi says, "More than 70 percent of
Alaskans, including a majority of Alaska
Natives, support offshore development."
American Petroleum Institute President
and CEO Jack Gerard points to the national
security implications of ignoring Arctic
development. "Keeping the Arctic off
limits puts the United States at a serious
competitive disadvantage," he says. "Russia
has been exploring actively in the region,
and military experts warned earlier this
year that removing the Arctic from the
leasing plan would 'signal retreat, needlessly
reducing U.S. flexibility for promoting
our national interests and our ability to
ensure international cooperation.'"
Unfriendly To Consumers
On the other side of the coin, a number
of environmental groups praised the decision not to offer leases in the Arctic.
Published reports cite "20 green groups"
that joined the League of Conservation
Voters in saying, "President Obama listened to coastal and Alaska Native residents, scientists, and the large majority
of Americans who recognize that offshore
drilling is too risky and dirty to allow."
Those sentiments are not shared by
several business and consumer organizations,
however. Karen Harbert, president and
CEO of the U.S. Chamber of Commerce's
Institute for 21st Century Energy, calls the
OCS leasing program "one of the final
nails in the coffin of the Obama adminis-

tration's anti-growth energy agenda . . . ignoring the will of the American people,
who understand that offshore energy production is good for American jobs, economic
growth, and energy security."
Harbert urges the incoming Trump administration and the new Congress "to
immediately rescind and replace this plan."
That plea is seconded by Consumer
Energy Alliance President David Holt,
who says, "The next administration will
have an opportunity to take a much more
responsible approach. The economic wellbeing and quality of life of the American
people and businesses, especially those
in Alaska, depend on it."
Holt recalls that CEA, along with the
National Association of Manufacturers
and the U.S. Chamber, "secured more
than 100 consumer, business and manufacturing group signatories to a letter
urging the Obama administration to fully
maintain the previously-proposed Gulf
of Mexico and Alaska lease sales."
Alaska's congressional delegation indicates it is ready to stand with any efforts
to rework the 2017-22 leasing program.
Senators Lisa Murkowski, R-Ak., and
Dan Sullivan, R-Ak., along with Representative Don Young, R-Ak., released a
statement calling it "the weakest offshore
development plan in American history."
Says Senator Murkowski, "President
Obama is well aware that the vast majority
of Alaskans want OCS development, and
I am infuriated that he has once again ignored our voices. I will do all I can to
counteract this shortsighted decision."
"This blatant disregard for Alaska's
social and economic future will be overturned," vows Representative Young.
CoAI Lawsuit
Meanwhile, NOIA reports that the
Cause of Action Institute (CoAI) filed a
complaint against DOI in an attempt to
learn whether the department's decision
to withdraw Atlantic OCS areas was politically motivated.
In the lawsuit filed Nov. 15 in the U.S.
District Court for the District of Columbia,
NOIA says CoAI is seeking all communications related to the sale planning process
"between or among DOI and its bureaus,
as well as the communications about the
program between the White House, Department of Defense, and the office of
Senator (Timothy) Kaine, D-Va."
NOIA says in August, CoAI filed a
Freedom of Information Act request for
related communications, "but DOI failed
to turn over any responsive records." r
American Oil and Gas Reporter - December 2016

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