Feds urged to put Atlantic waters on auction block

WASHINGTON — Oil development in Atlantic waters from Africa to Canada should encourage the Obama administration to sell drilling leases in waters hugging the East Coast, a leading industry trade group said Wednesday.

The American Petroleum Institute made the plea for new offshore drilling options in comments filed with the Interior Department and in a conference call with reporters.

The Interior Department’s Bureau of Ocean Energy Management is accepting comments through Friday as it takes the first step toward assembling a broad plan for selling offshore drilling leases from 2017 through 2022.

Read more: Feds take first step toward new oil auctions

Required by federal law, the five-year plan dictates the schedule and territory covered by those lease sales, which are a critical first step to oil and gas exploration on the United States’ outer continental shelf. The current schedule spanning 2012-2017 includes 15 sales of territory in the Gulf of Mexico and auctions of waters around Alaska, but no acreage along the East and West coasts.
The American Petroleum Institute wants that to change in the next five-year plan.

Otherwise, said API senior policy adviser Andy Radford, the United States is closing off potential opportunities — and oil and gas resources — lurking under U.S. Atlantic waters.

Evidence of that potential resource lies throughout the Atlantic Ocean, he said, noting production along Canada’s coast, in the Caribbean and in South America. Ongoing oil and gas activity near Africa and in the North Sea also hint at potential finds under the United States’ Atlantic territory.

“You have a notable gap there on the East Coast of the United States,” Radford told reporters.

“We think there are probably some trends that extend down the East Coast from what we see in Canada, but we won’t know until we look.”

Although the best testing tool is a drill bit, the oil industry is hoping to get a look at seismic data from geophysical studies along the East Coast that could be conducted later this year, under a new government plan for the activity.

Related story: Government OKs first-in-decades oil studies off East Coast

API filed its comments jointly with 10 other groups, including the National Ocean Industries Association and the Independent Petroleum Association of America. Together, the organizations urge the Obama administration to adopt “bold, forward-looking decisions” on offshore drilling that keep all areas on the table.

Since it can take 10 to 15 years to develop an offshore oil and gas lease after it is sold, decisions about coastal drilling today will shape U.S. energy production for decades to come, Radford said.

“Decisions the government makes now will impact our economy and our ability to exert diplomatic influence for decades,” he told reporters.

‘Expanding access’

The trade groups insisted the U.S. must “maintain our activity in existing areas of operation and thoroughly consider expanding access to unexplored and undeveloped outer continental shelf areas that have been off limits for decades.”

“Resources from these areas will be needed to replace the onshore and offshore oil and natural gas reserves that we currently produce,” the organizations said.

The value of offshore oil and gas development in U.S. waters has declined slightly, amid a drilling boom that has put rigs to work on land, from Texas to Pennsylvania. For instance, the Gulf of Mexico — where most U.S. offshore oil activity happens — was responsible for roughly 17.5 percent of the United States’ oil production in 2013, according to the U.S. Energy Information Administration, down from 24 percent in 2008.

But Radford said offshore oil and gas development is still essential to keep “advancing America’s energy renaissance” and the jobs and revenue that go along with it.

The federal ocean energy bureau is only at the very start of a long process of assembling the next five-year plan, with public meetings, proposals and environmental analysis spanning years.

Read more: Feds launch planning for future offshore lease sales

The agency’s early start means it could put a new plan in place well before the current one expires on Aug. 26, 2017 — possibly even before President Barack Obama leaves office.

Radford noted that “the potential is there to put the plan in place early,” because of the bureau’s three-year head start. But any move to finalize an offshore leasing schedule before Obama’s successor is sworn in — on Jan. 20, 2017 — would rob the next president of a chance to influence the blueprint.

“It takes any decision on . . . the 2017 to 2022 plan out of the hands of the next president, who will be the person in charge of administering it,” Radford said. “A new president could conceivably come in and start the process over.”