Feds take first step toward new oil auctions

WASHINGTON — The Obama administration on Friday took the first step toward new offshore drilling sales three years from now, inviting the public to weigh in on what coastal acreage should be opened for oil and gas exploration.

It issued a formal “request for information” seeking public comments on where on the outer continental shelf to sell oil and gas leases over a five-year span beginning in 2017.

Although the current blueprint for offshore lease sales doesn’t expire until Aug. 26, 2017, the more than two-year head start is necessary to accommodate numerous public meetings, environmental analysis and other work necessary before the Interior Department’s Bureau of Ocean Energy Management can finalize the next schedule.

“This is the first step in a very long process,” stressed Walter Cruickshank, acting director of the ocean energy bureau. “If you look at the various things that are required along the way in terms of analysis and the Outer Continental Shelf Lands Act (and other laws) there’s a lot to do.”

Related story: Feds to launch offshore planning

At this starting point, all options are officially on the table. Federal law requires the government to consider sales in all 20 of the outer continental shelf planning areas — from the California coast to the long-tapped Gulf of Mexico. As planning continues, federal regulators will narrow their focus, leading to release of a draft schedule of lease sales likely sometime next year.

Oil industry leaders on Friday said they hoped Obama’s Interior Department would write a broad blueprint with sales in untapped territory off the East Coast and other areas. Although federal law makes most of the nation’s outer continental shelf open to oil and gas drilling, the lease auctions are the critical avenue for that exploration; without selling leases, that activity is foreclosed.

The existing five-year plan includes 15 auctions of territory in the Gulf of Mexico and in waters around Alaska, but it does not include tracts off the East and West coasts. The ocean energy bureau has held five of those scheduled sales so far.

Andy Radford, senior offshore policy adviser for the American Petroleum Institute, said the Interior Department should “thoroughly analyze the resource-rich areas of interest” all around the U.S. coastline. Ultimately, he said, regulators should “draft an expansive leasing plan that maintains leasing areas and seeks to unlock new areas that are currently off limits.”

Randall Luthi, head of the National Ocean Industries Association, stressed that the potential benefits of offshore energy development around the country.

“Allowing oil and natural gas development in federal waters in the Atlantic alone could result in as many as 280,000 new jobs, $24 billion annually to the economy, $51 billion in government revenue, and the safe production of 1.3 million barrels per day of oil and natural gas,” Luthi said.

The five-year lease plan details the size, timing and location of planned auctions. Comments from industry officials, environmentalists and other stakeholders — due by July 30 — will help dictate its scope, Cruikshank told reporters on a conference call.

“Public input is critical to this planning process,” he said. We’re “really looking to get that public input to inform decisions that will be further along the line.”

In a statement, Interior Secretary Sally Jewell pledged regulators would follow “a thorough and open process that incorporates stakeholder input and uses the best available science.”

In developing the new schedule, the government will update its expectations about the amount of oil and gas located in waters near the U.S. coastline. That is likely to include new estimates about potential resources off the East Coast, where the last seismic data about the subterranean geology — and possible oil and gas there — is decades old.

The ocean energy bureau has outlined its preferred approach for allowing a new era of seismic studies in mid- and south-Atlantic waters, with some protections meant to safeguard whales and other marine life. But it has not yet filed a “record of decision” required to formally establish the approach and set the framework for the seismic research.

Cruickshank said he expected that document to be issued “fairly soon this summer.”

At least nine firms are looking to do the work, but they first would have to secure permits from federal officials, and survive more specific environmental scrutiny.

“Hopefully we’ll have some boats in the water collecting data next year,” Radford said. “It will take some time to process and analyze that data. I think you will have enough data at least for the companies (to buy) leases.”

Environmentalists urged the administration to keep sensitive areas out of the next five-year plan and keep the Atlantic off limits.

“This could be the first step in opening the Atlantic to offshore drilling, industrializing our coasts and leading to a very real chance of an oil disaster like BP’s Deepwater Horizon in many coastal towns along the east coast,” said Oceana campaign director Claire Douglass.

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