Posted January 28, 2015
Three maps, two views of America’s offshore energy wealth.
Below, the areas in red (and the striped area) reflect vast offshore oil and natural gas resource potential – nearly 50 billion barrels of oil and more than 200 trillion cubic feet of natural gas. We say potential because these areas represent the 87 percent of America’s federal offshore acreage that has been closed to exploration and development, dwarfing the areas in blue where development is allowed.
Nonetheless, what’s visible is the profile of an offshore energy giant, an offshore superpower. This is energy muscle waiting to be flexed. These are resources that could benefit Americans in terms of energy security, as more oil and natural gas is safely and responsibly produced right here at home, as well as job creation and economic stimulus.
That’s what energy superpowers do. They develop their resources to increase their security in a world where secure energy is fundamental to overall security. They develop their resources to fuel economic growth and to help ensure the prosperity of their citizens.
Now, a different view.
The maps above reflect the Obama administration’s view of offshore energy development in the 2017-2022 time period. They come from the Interior Department’s newly proposed five-year offshore lease program, which is critical because it could form the blueprint for America’s offshore energy strategy, with effects stretching well into the future.
The proposal, while a positive step, falls short of the kind of robust energy vision befitting an energy superpower. Despite strong public support for offshore development in Florida, Georgia, North Carolina, South Carolina and Virginia, just one lease sale is proposed for the Atlantic coast of those states – and even then that would not happen until 2021. The draft program would continue limiting development in the waters off Alaska and would not allow development off the West Coast and in the eastern Gulf of Mexico. Erik Milito, API director of upstream:
“Staying competitive and reducing our dependence on oil from abroad depends on planning and decisions made today. What the administration has in fact proposed represents delayed economic opportunity and could cost us a lot of jobs and revenue to the government and threaten our energy security. This is our energy moment, and we need smart, forward-thinking policies to realize this opportunity.”
The offshore lease plan draft and other developments – including executive decisions that would further limit Arctic energy activity, regulatory proposals and federal policies that are hindering oil and natural gas production onshore – all demonstrate a different, self-limiting vision of America’s energy revolution. Milito:
“The administration is compromising our ability to compete globally by restricting so much of the nation’s oil and natural gas resources. The draft offshore leasing program proposed today completely ignores areas where oil and natural gas development could create more than half a million new American jobs and generate hundreds of billions of dollars for the government.”
Milito discussed these trends and related topics during a conference call with reporters. Highlights:
On access to enable long-term energy planning:
“The oil and gas industry … particularly with offshore development, is looking at investment windows of 10 to 20 to 30 years, and we’re looking at these windows based upon the understanding that the demand for oil and natural gas resources is going to continue to rise globally for the next several decades. … The U.S. is positioned very well to meet growing demand on the world stage. … Offshore, you develop massive fields where you could have a platform with (production) of 100,000, 150,000 barrels of oil a day. These are critical strategic assets for the nation and for energy security.”
On offshore safety:
“The industry has stepped up and enhanced its ability to prevent an accident with additional standards and operating procedures. All of the companies are required to have … safety and environmental management systems. … We’re now in a new age. Senator Bob Graham and Bill Reilly, the co-chairs of the national commission on the (2010) oil spill, specifically said that offshore drilling is safer now than it was four years ago.”
On the potential for additional offshore regulation:
“We want to make sure ... we’re not taking steps that are just regulation for the sake of regulation, not actually decreasing risk. We’ve decreased the risk dramatically, companies take this very seriously.”
On new development restrictions for the Arctic National Wildlife Refuge coastal plain:
“This is an area that is not wilderness … there’s no trees, there’s no deep-water lakes, there are no mountain peaks. Congress specifically set this coastal plain aside to review it in order to determine whether or not oil and gas development should occur. … The coastal plain is 1.5 million acres, development can only occur on 2,000 acres. It’s an area the size of Dulles Airport. So you’ve got ANWR, which is the size of South Carolina, the coastal plain is the size of Delaware and you’re limited to develop … to a size of Dulles Airport. We’re talking about an area that has between 5 and 16 billion barrels of oil. And we’re sitting back, sitting idly, while the rest of the world develops its Arctic resources.”
This brings us back to America’s energy wealth opportunity. The ongoing U.S. energy revolution is creating jobs, boosting the economy and making the country more energy secure. Yet, in a recent speech to the United States Energy Association, API President and CEO Jack Gerard cautioned that this generational opportunity, while dynamic, won’t continue and grow without the right policy decisions now. Gerard:
“Getting our nation’s energy policy right means putting polices in place that encourage America’s 21st century energy renaissance and augment American global energy leadership. It means ensuring that our energy policies are closely aligned with our status as a leading global energy producer … Getting America’s energy policy right requires that it is rooted in this nation’s new energy reality, grounded by market principles and based on the best science available. … (W)hile the president’s rhetoric has improved somewhat when it comes to oil and natural gas production, the administration’s actions and regulatory biases continue to point toward stifling regulations and a backward-looking approach to our nation’s energy development potential.”
The draft offshore leasing plan suggests that timid approach. Other countries are actively developing their offshore reserves while the current administration pursues limiting policies that make little sense given projections for future global energy demand. That needs to change, starting with a draft offshore plan that doesn’t go far enough. Milito:
“If we’re going to do this is in a way that we’re going to be energy leaders, an energy superpower … particularly in the Arctic where it’s a bit of race to be the energy technology leader and the developer of resources in those areas, we need to get up off our butts and make it happen.”
Mark Green joins API after spending 16 years as national editorial writer in the Washington Bureau of The Oklahoman newspaper. In all, he has been a reporter and editor for more than 30 years, including six years as sports editor at The Washington Times. He lives in Occoquan, Virginia, with his wife Pamela. Mark graduated from the University of Oklahoma with a degree in journalism and earned a masters in journalism and public affairs at American University. He's currently working on a masters in history at George Mason University, where he also teaches as an adjunct professor in the Communication Department.
Energy Tomorrow is a project of the American Petroleum Institute – the only national trade association that represents all aspects of America’s oil and natural gas industry – speaking for the industry to the public, Congress and the Executive Branch, state governments and the media.