The People of America's Oil and Natural Gas Indusry

Look Forward, Not Backward, on Offshore Energy

Mark Green

Mark Green
Posted April 30, 2015

It’s noteworthy that there’s bipartisanship in Congress on offshore energy development. Last week a group of Republican U.S. House and Senate members signed onto a letter urging the Interior Department to increase access to energy reserves on the nation’s outer continental shelf. It follows a March 26 letter from Virginia’s two Democratic senators and a March 27 letter from a dozen House Democrats supporting offshore energy development.

Bipartisanship in Washington is quite a rare bird, so it’s significant to see it form around the need to develop domestic offshore energy.

Equally important: Strongly worded concern from the most recent letter’s signers, urging that the draft 2017-2022 plan for oil and natural gas leasing offered by the Bureau of Ocean Energy Management not be weakened by removing any of the leasing areas in the proposal. U.S. Sen. Lisa Murkowski, chairman of the Senate Energy and Natural Resources Committee, and Rep. Rob Bishop, chairman of the House Natural Resources Committee, led 161 colleagues in writing to Interior Secretary Sally Jewell:

… we wholeheartedly believe that the United States must not shrink away from developing our nation's offshore energy resources. A robust Five Year OCS Program should be a key component of the Administration’s all-of-the-above energy strategy that can continue to advance the job creation, economic growth and energy security gains that the U.S. has enjoyed thanks to the recent boom in energy production on state and private lands. Given that offshore developments have high costs and exceptionally long development timelines, the Five Year program sets the foundation for more than a decade of development. As such, we fear that the currently proposed DPP (draft) sets the stage for energy insecurity instead of domestic prosperity.

The legislators raised specific concerns: “premature restrictions” on the proposed lease sale areas in the Atlantic, including the 50-mile buffer zone; the permanent withdrawal of areas offshore Alaska and the limited leasing opportunities available by the draft plan. The lawmakers write:

While we were pleased to see the Administration finally take a step in the right direction by including one potential lease sale in the Atlantic in the draft plan, this step was offset by the additional restrictions in the Atlantic and area withdrawals in the offshore of Alaska.  What the administration proposed appears merely to be an effort to provide political cover irrespective of the opportunity foregone. When coupled with the imposed buffer zones, and an insufficient number of lease sales, none of which are required to be held, this draft proposal fails to produce a long-term energy policy that harnesses the potential of our nation's vast natural resources. In this respect it is disingenuous.

We’ve commented on the draft leasing plan before, noting that it would leave key opportunities to develop offshore energy on the shelf. In short, the plan doesn’t go far enough. Despite strong public support for offshore energy development from Florida to Virginia, the draft plan proposes just one lease sale off those states – and then not until nearly the end of the plan in 2021.

It’s also concerning that, if anything, Jewell and other government officials have suggested the draft plan might be weakened from an energy development standpoint – by dropping some of the proposed leasing areas.  Jewell said last week the plan could include fewer lease sales and fewer offshore plans before it is finalized. Platts reported:

During a news conference at the annual IHS CERAWeek conference in Houston, Jewell indicated the plan may change before it is proposed and finalized by 2016, but those changes would only be reductions in lease sales. Interior will not consider more sales than what it has already proposed, she said. “There's two more bites at the apple here from what we've put out on the table as a proposed plan,” Jewell said. … While she said the next administration could undo the five-year offshore leasing plan, she doubted it would happen. “These aren't easy to change,” she said.

Earlier this year, BOEM Director Abigail Hopper said, “The areas included for possible lease sales are not set in stone.”

Not exactly the signals that stir confidence from the marketplace. Thus the backdrop to the congressional missive to Jewell: a draft offshore leasing plan lacking boldness, federal officials walking things back from even the minimalist package they’ve offered and the recognition that this leasing plan, once finalized, will largely dictate the scope and pace of U.S. offshore energy development well into the next decade and probably longer.

Policies that choose not to more completely develop America’s offshore energy will significantly challenge our ability as a nation to sustain and grow the energy renaissance now under way. America has an historic opportunity to become more energy self-sufficient – creating jobs and boosting the economy in the process – and to use domestic energy in positive ways in the world. But not with limited vision and planning now. API President and CEO Jack Gerard:

“We got to this era of energy abundance and global energy leadership because of the entrepreneurial spirit of the private sector, the hard work of the American worker and the unique system of private property and individual rights of the American marketplace.  To continue this progress we should be mindful that these advances could easily be stalled or even reversed without forward-looking energy policies that encourage safe and responsible domestic energy development and production, that support a robust refining sector, and embrace our nation’s bright energy future.”

The federal offshore leasing plan now under development is a key indicator of whether our policy vision is forward-looking, or looking backward, needlessly limiting American energy’s potential to benefit our country and America’s friends around the world.

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.