Keep OCS sale on schedule, Va. governor-elect tells Salazar

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Dec. 30 -- Robert F. McDonnell, who will become Virginia’s governor in January, asked US Secretary of the Interior Ken Salazar “to do everything in your power” to ensure that a planned 2011 sale of federal oil and gas leases off the state’s coast stays on schedule.

“Offshore energy exploration and production will be a priority in my administration,” said the governor-elect in a Dec. 23 letter to Salazar. “I would like to work with you and [US President Barack Obama] to make Virginia an international leader in offshore energy exploration and production on the Atlantic coast. It is important for both our commonwealth and our country.”

A spokeswoman for Salazar said on Dec. 29 that McDonnell’s letter is being reviewed. “In regards to the specific question on timing, [the secretary] is reviewing the proposed Virginia lease and at this point he hasn’t made any decisions,” she said in an e-mailed response to an OGJ inquiry.

McDonnell, a Republican, is due to be inaugurated Virginia’s governor on Jan. 16, 2010, succeeding Timothy M. Kaine, a Democrat, who asked Salazar on Feb. 19, 2009, to postpone the lease sale. Although he signed legislation creating a comprehensive Virginia energy strategy with offshore resource development into law, Kaine said, “Our policies do not support exploration for oil or production of gas or oil, which would be allowed under Lease Sale 220.”

McDonnell, who included jobs and revenue from offshore resource development in his election campaign, noted in his letter to Salazar that more than 15 months have passed since Congress let offshore leasing moratoriums expire and then-US President George W. Bush rescinded his predecessors’ presidential withdrawals. This cleared the way for Virginia to become the first East Coast state with offshore oil and gas activity in 2011, the governor-elect said.

“Virginia is eager to get started,” he continued. “Nearly a year ago, the public comment period for the potential lease sale off Virginia ended. Unfortunately, it appears that virtually no progress has been made at the federal level to get this process rolling.”

Took first step
The US Minerals Management Service took the first step toward holding Outer Continental Shelf Lease Sale 220 off Virginia on Nov. 13 when it published a call for information and interest/nominations and a notice of intent to prepare an environmental impact statement covering about 2.9 million acres some 50 miles off the state’s coast.

The proposed leasing area may contain 130 million bbl of oil and 1.14 tcf of natural gas, MMS said. It is accepting comments on the call and the EIS notice through Jan. 13.

McDonnell asked that Virginia remain in the current 5-year federal OCS plan, and that the federal administrative process for the 2011 lease sale move forward immediately. “Any effort to remove or delay Virginia’s participation in the lease sale would significantly hamper our efforts to create jobs, eliminate much-needed new revenue, and undermine support for President Obama’s stated commitment to make the United States more energy secure,” he warned.

The chief executives of two leading oil and gas industry associations separately applauded McDonnell’s action on Dec. 29. “It is time for the Interior Department to take action to allow expeditious leasing of federal oil and gas resources off Virginia’s coast. The [governor-elect], and the majority of Virginians, want such action,” said American Petroleum Institute Pres. Jack N. Gerard.

Virginia could become the first area on the Atlantic OCS to be federally leased in nearly 30 years, noted National Ocean Industries Association Pres. Tom Fry. “America cannot have increased energy supply without increased access, and new areas of the OCS cannot be leased unless they are included in 5-year leasing plans and sales are scheduled,” he said, adding, “None of this can happen unless the necessary environmental reviews are conducted, and we urge [DOI] to begin this important work as soon as possible.”

Contact Nick Snow at nicks@pennwell.com.

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