The Obama administration on Thursday finalized a five-year plan for offshore drilling that focuses on allowing development in already-
explored areas of the Gulf of Mexico and the Arctic to the chagrin of oil and gas companies who were hoping for more territory.
The first sale of leases under the Interior Department’s 2012-2017 plan is set to take place this fall, with areas of the western Gulf of Mexico up for grabs. Eleven more Gulf of Mexico sales are planned, as well as three auctions of leases in the Cook Inlet near Anchorage and the Chukchi and Beaufort seas north of Alaska.
The plan rules out lease sales in Atlantic waters, despite pressure from Virginia officials eager for oil and gas development off the commonwealth’s shores.
Interior Secretary Ken Salazar described the plan as “smart,” but “aggressive,” with planned auctions of waters around Alaska targeted to areas that have both big potential energy resources and small environmental and other conflicts.
But oil industry representatives and their allies in Congress said the administration’s plan would keep promising areas off the table. American Petroleum Institute Upstream Director Erik Milito said the program demonstrated “unnecessary restraint.”
The plan “makes more areas off limits than it makes available,” Milito said, adding that the program’s focus on the Gulf of Mexico overlooks promising new areas for development in the Atlantic and Pacific oceans.
“While vitally important, the western and central Gulf of Mexico areas including in this proposed offshore program are not new areas,” Milito said.
Rep. Doc Hastings, R-Wash., the head of the House Natural Resources Committee, said the plan offers “a bleak future for American energy production” because it keeps the East and West Coast “under lock and key.”
And Randall Luthi, a former drilling regulator that heads the National Ocean Industries Association, called the administration’s plan “deeply disappointing.”
“Taking the entire East and West coasts off the table and further delaying Alaska sales clearly shows this administration is not following its own advice to lessen our dependence on foreign sources of energy by bolstering production here at home,” Luthi said.
The final 5-year plan, which replaces a Bush-era leasing program that ends June 30, is nearly identical to a proposal the Interior Department unveiled last November. The biggest change is a decision to delay a planned Beaufort Sea lease sale from 2015 to 2017.
Sales of drilling rights in the Chukchi Sea and Cook Inlet would take place in 2016.
The oil industry recently has not had a big appetite to drill in federal Cook Inlet waters. But after the Bureau of Ocean Energy Management recently asked oil and gas companies about the region, there was enough support to move forward with a planned sale, said bureau Director
Tommy Beaudreau. He described the industry interest as “significant.”
The Obama administration’s leasing plan continues a tradition in the Gulf of holding area-wide lease sales, with much of the non-leased acreage up for grabs.
But when it comes to the Arctic and Alaskan waters, the government is taking a different approach, borrowed from its handling of oil and gas drilling on federal lands. There, the acreage on the auction block will be selected to avoid harming wildlife and the native Alaskan communities that depend on whaling and fishing for food, Beaudreau said.
Many of the native Alaskan communities are “dependent on the ocean resources, literally, for survival,” Beaudreau said. “We need to be respectful of that, and we need to be protective of that.”
Salazar said that he fully expected the Arctic lease sales to go forth as planned, but stressed the importance of carefully selecting areas for auction.
Already, the final five-year leasing plan walls off some areas north of Barrow, Alaska for development because of the subsistence whaling in the region. The administration also will preserve an existing 25-mile buffer zone along Alaska’s Chukchi Sea coastline and wall off the Hanna Shoal area that is home to a high concentration of marine life.
Shell Oil Co. is poised to begin exploratory drilling in the Chukchi and Beaufort seas this summer, under leases it purchased in 2005, 2007 and 2008. If that work is authorized as expected, it will add to the body of knowledge about the area’s potential oil and gas resources and guide future lease sales, Salazar said. Planned development in Canada’s Arctic waters as well as extensive scientific study also will be factored in, Salazar said.
Salazar argued that there is too little information about potential oil and gas along the Atlantic coast _ including where it might be located _ “to make credible decisions” about drilling there. The Department of Defense has raised concerns about oil and gas drilling in some areas off the Virginia coast.
Environmentalists said the plan puts pristine Arctic areas up for grabs.
“President Obama is doubling down on risky offshore oil development when he should be investing in clean energy,” said Miyoko Sakashita, oceans program director for the Arizona-based Center for Biological Diversity.