WASHINGTON — The Obama administration on Tuesday unveiled a plan to sell offshore drilling leases in Atlantic and Arctic waters that immediately alienated both the oil industry and environmentalists.
Oil industry leaders said the draft plan for selling drilling rights from 2017 to 2022 does not go far enough, because it excludes promising territory along the Northeast and off Florida’s east coast, while also locking up some Arctic waters previously open to development.
At the same time, environmentalists blasted the proposal, arguing that any drilling along the East Coast — even when limited to areas off just a handful of mid- and south-Atlantic states — could put the entire Eastern Seaboard at risk from oil spills.
The draft program, developed by the Interior Department’s Bureau of Ocean Energy Management, proposes 14 sales of offshore drilling leases: 10 in the Gulf of Mexico, three off the coast of Alaska and one for territory along mid- and south-Atlantic states. No auctions are contemplated in Pacific waters, and the possible Alaska and Atlantic auctions would be scheduled near the end of the 2017-2022 time frame.
Interior Secretary Sally Jewell stressed that the plan would allow offshore oil development “while protecting areas that are simply too special to develop.”
“This is a balanced approach,” Jewell told reporters in a conference call. “It supports thoughtful, careful, well-structured oil & gas development . . . complemented by significant effort the administration has made to stand up renewable projects around the world.”
Nothing ‘set in stone’
Jewell also emphasized that the ocean energy bureau is only in the beginning stages of a long process of assembling the five-year plan, which is required by federal law and is critical step for new oil and gas exploration on the United States’ outer continental shelf. Offshore oil leases can only be sold through auctions contained in the final schedule.
The draft “is not final,” Jewell said, adding that proposed lease sales “may be narrowed or taken out entirely in the future based on additional science, information and public comment that we receive.”
Abigail Hopper, the newly installed director of the ocean energy bureau, emphasized that “the areas included for possible lease sales are not set in stone.”
“Rather,” she told reporters, “they are options for us to continue to consider.”
The draft plan released Tuesday only defines the broad contours of the final sale schedule, providing an opportunity for the public to weigh in on the issue.
From here, the proposal can only get smaller, whittled down by regulators in response to public comments. In a “frequently asked questions” document issued Tuesday, the ocean energy bureau clarified that if an area was left out of the draft proposed program, it is out for good: “No sale or area can be added to the program without restarting the program preparation process at the stage in which (it) was deleted.”
That’s one reason oil industry leaders had implored the administration to keep more territory on the table in this first proposed draft program.
“The government’s first draft should permit full consideration of all planning areas where significant discoveries are possible,” said Erik Milito, upstream director for the American Petroleum Institute. “Opening new areas offshore is critical to continuing America’s energy renaissance.”
The Obama administration’s proposed Arctic sales would auction off territory in the Chukchi Sea, Beaufort Sea and the Cook Inlet, where state waters are now home to oil production.
But President Barack Obama on Tuesday formally designated 9.8 million acres of the Beaufort and Chukchi seas as off limits to future oil and gas leasing, following his similar move to protect Bristol Bay last December.
Obama’s designation formally insulates whaling areas in the Beaufort Sea, creates a 25-mile coastal buffer in the Chukchi Sea and protects the Chukchi’s Hanna Shoal area, which is home to a high concentration of marine life.
Four of the five Arctic areas affected by Obama’s announcement were already excluded from leasing under the government’s current leasing plan, which expires in August 2017. For instance, the existing plan — also drafted by the Obama administration — already includes a buffer zone along Alaska’s Chukchi shoreline.
The move still keeps 90 percent of undiscovered technically recoverable resources available in the Chukchi and Beaufort seas, Jewell said.
In the Atlantic, a possible lease sale would offer up territory along the coasts of Virginia, North Carolina, South Carolina and Georgia.
Jewell said any Atlantic sale probably would be held no earlier than 2021, allowing time for would-be buyers to do seismic research identifying potential oil and gas resources and giving federal regulators an opportunity to conduct required environmental studies.
If sold, the Atlantic leases would be set back from the shore by at least 50 miles. The Interior Department said the proposed buffer zone is designed to prevent conflicts between oil development, military exercises, fishing and renewable energy projects.
Although there are no active oil and gas leases in federal Atlantic waters today, energy companies drilled 51 wells there between 1975 and 1984. Five wells off the coast of New Jersey found natural gas or other hydrocarbons but were abandoned as too expensive to produce at the time.
Oil industry leaders say that early offshore drilling — combined with 30-year-old geological studies and ongoing development in other parts of the Atlantic Ocean — suggest big potential resources along the East Coast.
By contrast, while the Gulf is believed to have decades of oil production left to give, energy companies have been exploring the basin since the 1950s.
As it stands now, the proposed five-year plan would double down on Gulf sales, scheduling two sales annually in both the western and central Gulf of Mexico. That’s a shift from recent practice of holding one sale per year in each of those planning areas.
But it schedules no potential lease sales in the eastern Gulf of Mexico, where a statutory ban blocks those auctions until 2022. Industry officials had asked regulators to keep that territory in the plan in anticipation of a sale in 2022 or earlier, if Congress lifted the restrictions.
“The eastern Gulf of Mexico is a logical area for new exploration and development since there is already industry and infrastructure in the rest of the Gulf,” said Randall Luthi, president of the National Ocean Industries Association. “The draft proposed program could have been much more robust had it included further analysis of the eastern Gulf of Mexico with the caveat that should Congress lift the exploration ban before 2022, new areas could be included in (the schedule).”
Jewell defended the Gulf focus, noting that the basin “is rich in resources and has well-established infrastructure to support offshore oil and gas programs.”
And she emphasized that the administration is continuing to consider oil and gas exploration in the Arctic while proposing possible lease sales in the Atlantic.
“We are committed to gathering the necessary science and information to develop resources the right way and in the right places,” Jewell said.
Environmentalists cast the administration’s proposal as a step backwards — further wedding the United States to oil and gas development when the country should be investing heavily in cleaner-burning renewables.
“This takes us in exactly the wrong direction,” said Peter Lehner, executive director of the Natural Resources Defense Council. “It would expose the Eastern Seaboard, much of the Atlantic and most of the Arctic to the hazards of offshore drilling.”
Democratic Sen. Ed Markey said his home state of Massachusetts would bear the risks of oil drilling along Virginia, the Carolinas and Georgia.
“If drilling is allowed off the East Coast, it puts our beaches, our fishermen, and our environment in the crosshairs for an oil spill that could devastate our shores,” he said.
“Offshore oil spills don’t respect state boundaries,” Markey added, noting that the 2010 Deepwater Horizon disaster in the Gulf illustrates the risks to his state’s “fishing and tourism industry.”