The People of America's Oil and Natural Gas Indusry

Energy Plan Fig Leaf

Mark Green

Mark Green
Posted November 11, 2011

The administration's new five-year plan for offshore leasing is a first step to increased domestic energy production. Too bad that's all it is - a first step, a plan so limited it looks timid compared to what needs to be done to secure this country's energy future.

In the sense that the proposed plan isn't even as bold as the one the president described 20 months ago - leaving out key resource areas off both coasts and in the eastern Gulf of Mexico - it's really a step back. API's Andy Radford, senior offshore policy advisor, said the administration isn't offering much in the way of new areas for exploration and development:

"We're picking over bones. We've been in the Gulf since the 1950s. How much longer can we rely on industry to use areas that already have been worked pretty well? ... It's trimmed down from what the president offered in March 2010. ... It's hard to say this is an expansion."

The plan schedules 15 potential 2012-2017 lease sales: 12 in the Gulf and three off the coast of Alaska. But by leaving out resource areas like a sector off Virginia's coast, you effectively kill incentive for preliminary work, such as seismic studies, that has to occur before oil and natural gas companies make long-range decisions to acquire a lease for development.

So, in the larger context, it's a step backward, not forward - in terms of energy, new jobs and revenues for government. "This is a missed opportunity," said Erik Milito, API's upstream director.

Make that a big missed opportunity, given that the lead time for offshore exploration and development usually is measured in years and millions of dollars. The administration likes to note that oil production in this country is up, and it is - but only because of decisions made by previous administrations and because of production on non-federal lands.

Unfortunately, this administration's signature energy decision is last year's ban on new deepwater drilling permits in the Gulf. The moratorium is ended, but Gulf permitting remains off. While industry is committed to new safety measures put in place since last year, production is down.

The administration's new leasing announcement sounds dramatic, but it's not to be mistaken as the foundation for a pro-energy development strategy that could produce 1.1 million new jobs, $127 billion in additional revenue for the government and more than 4 million barrels worth of oil and natural gas - all by 2020.

That's an energy plan. What the administration is offering isn't an energy plan, it's an energy plan fig leaf.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.