Salazar puts Atlantic, eastern gulf off-limits for next 5 years

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Dec. 1 -- Emphasizing that the administration of US President Barack Obama remains committed to developing federal offshore oil and gas resources, Interior Sec. Ken Salazar said on Dec. 1 that Atlantic Ocean and eastern Gulf of Mexico areas will be excluded from the 2012-17 Outer Continental Shelf 5-year leasing program.

Lease sales in the central and western gulf will be held, but only when a supplemental environmental impact statement studying consequences of the spill from BP PLC’s Macondo well is completed, he added during a teleconference with reporters. “We will do everything we can to proceed with lease sales there at the end of 2011 and in early 2012,” he declared.

“As a result of the Deepwater Horizon oil spill we learned a number of lessons, most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime,” Salazar continued. “As that regime continues to be developed and implemented, we have revised our initial March leasing strategy to focus and expend our critical resources on areas with leases that are currently active.”

Oil and gas association leaders immediately criticized his move. “As our country looks for ways out of the hole of lackluster economic growth and job creation, today’s decision shows that this administration would rather keep digging than take the ladder to increased economic prosperity offered by developing our nation’s domestic energy resources,” American Petroleum Institute Pres. Jack N. Gerard said.

Bruce H. Vincent, chairman of the Independent Petroleum Association of America and president of Swift Energy Co. in Houston, maintained, “If there were any questions as to whether or not this administration is more interested in picking winners and losers in the energy market and waging an unbridled war on America’s oil and gas producers than creating jobs and putting our nation on a path toward energy security, they were put to rest with today’s misguided announcement that will keep even more taxpayer-owned energy resources further out of reach and under Washington’s lock-and-key.”

‘Relieved, disappointed’
National Ocean Industries Association Pres. Randall B. Luthi said he was relieved that Salazar apparently is moving forward on developing a 2012-17 OCS program, but disappointed that scheduled 2011 lease sales will be delayed and possibly canceled, particularly off Virginia, where bipartisan support remains, and the eastern gulf, where deepwater resources hold great promise.

“What would be more valuable to the nation’s economic and energy future would be the recognition that valuable energy resources lie in those areas that have been kept off-limits to even exploration for decades, and will now apparently continue to be locked away,” Luthi said.

Salazar said information will continue to be gathered about environmental impacts of conducting seismic studies of the South and Mid-Atlantic Outer Continental Shelf. Rigorous scientific analysis of the Arctic also will continue to determine if future oil and gas development can take place there, although no lease sales are currently planned, he indicated.

US Bureau of Ocean Energy Management, Regulation, and Enforcement Director Michael R. Bromwich, who also participated in the teleconference, announced that the DOI agency responsible for managing the nation’s offshore resources is completing an agreement with the National Oceanic and Atmospheric Administration under which NOAA will collaborate with BOEMRE in the environmental analysis for OCS planning.

Environmental organizations endorsed Salazar’s action. “We need to make sure we never see another oil spill like the BP disaster. Keeping the eastern Gulf of Mexico and Atlantic coast out of the new 5-year drilling plan is a significant step in the right direction,” said Sierra Club Land Protection Director Athan Manuel. “But an oil spill like the BP disaster could happen anywhere—in Alaska, or in other parts of the central and western gulf where drilling is allowed.”

But Karen A. Harbert, president of the US Chamber of Commerce’s Institute for 21st Century Energy, said the move sends exactly the wrong signals. “By continuing to keep most of America’s abundant oil and gas resources under lock and key, the Obama administration is ensuring that we will continue to increase our dependence on foreign oil, which threatens our national security,” she maintained. “The administration is sending a message to America’s oil and gas industry: Take your capital, technology, and jobs somewhere else.”

Contact Nick Snow at nicks@pennwell.com.

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