Energy firms want action on Atlantic drilling

WASHINGTON — Energy industry leaders are fretting that it could be a decade before the federal government allows them to hunt for oil and gas along the East Coast, unless the Obama administration shifts its approach to offshore drilling.

Although the federal waters of the Atlantic Ocean are technically open for oil exploration, drilling leases must be sold in government auctions, and none of those sales are planned for the area under a schedule that runs through mid-August 2017.

With the Interior Department poised to soon begin the long process of drafting the next five-year sale schedule spanning 2017 to 2022, oil industry representatives are imploring the administration to keep the door open to Atlantic auctions.

“Let’s continue to allow opportunities and provide opportunities to at least explore and see what’s actually out there,” said Erik Milito, upstream director for the American Petroleum Institute.

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In assembling the current sale schedule, Interior Department officials insisted that private companies should first conduct geophysical research to get a sense of the area’s potential oil and gas resources before the government makes any leasing decisions or schedules sales. But industry representatives worry that sticking to that same approach for the 2017-2022 schedule would likely foreclose Atlantic auctions for that time period too.

Their concerns are wedded to one hard reality: Under federal law, if a potential offshore lease sale doesn’t make it into the five-year plan, it can’t happen.

Generally, the multi-year process of assembling those leasing blueprints begins broadly, with plenty of acreage on the table, and potential offerings scaled back over time. Randall Luthi, a former federal offshore drilling regulator who now heads the National Ocean Industries Association, said that makes it crucial that Atlantic acreage is not ruled out at the beginning.

He likens the planning process to an inverted pyramid. “You start on the five-year plan including as much as you can, and as you go through the process, it winnows down,” he said. “You never add during the process. You only delete.”

While the Interior Department’s Bureau of Ocean Energy Management appears likely to broadly approve seismic research in the Atlantic as soon as next January, industry representatives said litigation and individual permit reviews mean the geological surveys might not begin for several years _ long after planning for the next five-year drilling lease sale schedule gets underway.

The ocean energy bureau said in a statement that it expects to complete a broad environmental assessment of seismic studies in the Atlantic early next year, potentially allowing potential surveys in 2014.

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API senior policy adviser Andy Radford urged the agency to “leave the Atlantic areas in the five-year plan throughout the development process and schedule some lease sales at some point in that 2017-2022 time frame.”

Then, he said, if seismic research does not reveal promising resources or the geological data are not collected in time, the bureau could cancel the sales.

“You don’t have to prejudge that,” he said. “Don’t rule it out at the beginning because you don’t have the data.”

Interior Department officials insisted they will take an expansive view when they begin piecing together the 2017-2022 leasing plan sometime next year. Atlantic acreage won’t be ruled out just because seismic data isn’t in hand, stressed Tommy Beaudreau, Interior’s acting assistant secretary for land and minerals management.

Nor must the Interior Department completely resolve concerns about Defense Department activities in the same Atlantic waters as drillships and rigs, he added.

“We don’t have to have the full set of data from the seismic work and we don’t have to completely work through the issues around deconfliction in order to make a decision around scoping a new five-year plan,” Beaudreau said.

In line with the oil industry’s recommendation, Beaudreau said the ocean energy bureau was open to tentatively scheduling lease sales in the Atlantic — as it has done for waters around Alaska — with the idea that they could be canceled if necessary information isn’t ready in time. An Atlantic lease sale could be penciled in for 2021, for instance, to allow time for harvesting geological and environmental data.

Ultimately, any final decision on the issue will rest with Interior Secretary Sally Jewell.

Federal Atlantic waters are estimated to contain 37 trillion cubic feet of gas and 3.8 billion barrels of oil.

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But estimates about the area’s oil and gas potential may be conservative because they are based on geological surveys conducted three decades ago. New seismic technology and computer modeling can more clearly see geological features that could signify pockets of oil and gas.

Environmentalists and some political leaders say offshore drilling and the seismic research that precedes it are too risky.

Seismic surveys generally involve sending pulses of sound through the ocean and under the seafloor; when the sound waves bounce back, they bring clues about what lies below.

But along the way, the seismic blasts can harm whales, dolphins and fisheries, said Matthew Huelsenbeck, a marine scientist with the conservation group Oceana.

“Seismic air gun blasts are the first dangerous step to offshore drilling in the Atlantic, which has not been made safe since the disaster in the Gulf,” Huelsenbeck said, referring to the 2010 explosion and fire at the Macondo well.

Industry officials argue that geological survey techniques have advanced, lessening the potential risk to marine life.

The Interior Department could require companies to take precautions such as shutdowns during whale migration seasons and when dolphins are nearby. Additional limits also may be embedded in federal permits governing the work.