Salazar scraps predecessor's 5-year OCS plan

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Feb. 11 -- Calling it "a headlong rush of the worst kind," US Interior Secretary Ken Salazar said on Feb. 10 that he was delaying a 5-year Outer Continental Shelf leasing plan, which his predecessor launched last summer.

"To establish an orderly process that allows us to make wise decisions based on sound information, we need to set aside the Bush administration's midnight timetable for its OCS drilling plan and create our own timeline," he told reporters at DOI headquarters.

He said he would add 180 days to the public comment period on the plan, which the US Minerals Management Service's OCS Planning Committee approved on Dec. 10, 2008, so coastal states and communities would have more time to study it. The original deadline was Mar. 23.

Salazar also said he was ordering the US Geological Survey and US Minerals Management Service to prepare an evaluation of US offshore conventional and alternative resource potential within 45 days. Based on that report, he said that DOI would then determine which areas need more information and would create a plan to gather it.

The secretary said it would hold four regional meetings after USGS and MMS complete their study to discuss findings affecting the Atlantic, Pacific, Gulf of Mexico, and Alaskan OCS areas. He also said he intends to issue a final rulemaking for renewable energy on the OCS within the next few months.

A seat at the table
"To those of you from the oil and gas industry, I pledge that you will have a seat at the table in this administration. I assure you that you will play an important role in helping us meet our nation's energy needs," Salazar said.

But he added that US President Barack H. Obama and he agree that a new comprehensive energy plan "that takes us to the new energy frontier and secures our energy independence" must be developed. "A drill-only approach, onshore or offshore, is not enough," the secretary said.

The chairmen of two major congressional committees dealing with energy applauded Salazar's action. House Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.) said that it gives the nation an opportunity to take a more reasoned and responsible approach to ensure a fair return to taxpayers. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) said that Salazar's strategy was thoughtful and balanced, and that his plan to hold regional conferences makes sense.

Oil and gas associations were critical, however. American Petroleum Institute Pres. Jack N. Gerard said the OCS plan that Salazar placed on hold received a record 187,000 comments from states, environmental groups, industry, labor groups, and the general public, "with 87,000 of those comments supporting expanded and expeditious development.

"Congress made the American people wait nearly 30 years to address our immediate energy challenges. Secretary Salazar today told the American people they must continue to wait, even though more than two thirds of them want to tap our vast domestic resources for the benefit of all Americans," Gerard said.

Lengthy, deliberate
Independent Petroleum Association of America Pres. Barry Russell also disputed Salazar's assessment that the new 5-year OCS plan was developed in a hurry. "The public comment period is by both nature and design a lengthy and deliberate process, and thousands of Americans have made their voices heard. Poll after poll confirms that the American people understand the imperative of producing more of our energy resources right here at home, support it, and are prepared to take the steps necessary to ensure it remains a top national priority," he said.

Salazar said his action does not rule out additional OCS leasing. "There may be areas where we welcome new oil and gas development," he said. But they need to be identified and leased as part of a more comprehensive approach that includes renewable and alternative energy technologies, he added.

That would differ from the Bush administration, which he said was so intent on opening new offshore oil and gas areas "that it torpedoed offshore renewable energy efforts."

Salazar said that the 2005 Energy Policy Act contained a provision that required DOI to issue rules and regulations within 90 days of its enactment on Aug. 8 of that year to guide development of wind, wave, and tidal power resources offshore.

"Yet it took 3 years for the Bush administration to prepare a proposed rule for offshore renewable energy development. They left office without putting any final regulations because it was not their priority, notwithstanding the requirement of the law. For them, it was oil and gas or nothing," he said.

Opportunity
Salazar said that he will take a different approach. "Offshore renewable energy creates a tremendous opportunity for the United States to become a technology leader. I intend to issue a final rulemaking in the coming months so that potential developers know the rules of the road," he said.

Identifying new OCS areas where oil and gas can be responsibly developed will take longer, he said. "In the biggest area that the Bush administration's draft OCS plan proposes for oil and gas drilling—the Atlantic seaboard from Maine to Florida—our data on available resources is very thin, and what little we have is 20-30 years old. We shouldn't make a decision to sell off taxpayer resources based on old information," Salazar said.

He said USGS and MMS in their initial report would assemble all the information DOI has on offshore resources, both conventional and renewable, along with the potential impacts of their development. The study's primary purpose will be to identify areas where more information is needed and to start gathering it, he continued. "We need a definition of what we don't know," he said.

The examination is not likely to impact OCS lease sales off Alaska and Virginia, which are part of the current 5-year plan running through 2012, he emphasized, adding that the study could produce information that affects how they are conducted.

"The oil and gas industry should not see the Obama administration as its enemy. It should recognize that we intend to take a comprehensive approach to energy. The previous administration dragged its feet on renewable offshore energy resources after Congress passed the Energy Policy Act in 2005. We plan to correct this," Salazar said.

Contact Nick Snow at nicks@pennwell.com.

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