Salazar unveils new proposed 5-year OCS leasing program

US Sec. of the Interior Ken Salazar announced a proposed US Outer Continental Shelf program for 2012-17 with 15 potential oil and gas lease sales, 12 in the Gulf of Mexico and 3 off Alaska’s coast. “This 5-year program will make available for development more than three-quarters of undiscovered oil and gas resources estimated on the OCS, including frontier areas such as the Arctic, where we must proceed cautiously, safely and based on the best science available,” Salazar said on Nov. 8 as DOI’s US Bureau of Ocean Energy Management released the tentative schedule.

A fact sheet about the proposed program—the second of three that must be issued before a final 2012-17 program is established—said it included five annual area-wide sales offering all unleased acreage in the western Gulf of Mexico beginning in fall 2012; five more similar annual area-wide sales in the central gulf beginning in spring 2013; and two sales in the eastern gulf, in 2014 and 2016, in areas not under congressional moratorium.

The proposed schedule also included a sale in the Beaufort Sea in 2015 and one in the Chukchi Sea in 2016 off Alaska, with time to learn from interim exploration and further analyze environmental, subsistence use, and infrastructure issues so the sales can be tailored to address these issue; and a special interest sale in Alaska’s Cook Inlet, initially scheduled for 2013 but possibly moved to later depending on industry interest.

It did not include any lease sales off the US Atlantic coast. The fact sheet said that while a 2009 OCS development strategy included the south and mid-Atlantic planning areas under possible consideration for a 2012-17 program, a lack of oil and gas infrastructure and spill preparedness and response capacity, along with potentially conflicting uses with the US Department of Defense, supported Salazar’s decision to leave it out.

Virginia Gov. Robert F. McDonnell (R) reacted sharply. “Virginia is poised to become the ‘Energy Capitol of the East Coast’ by responsibly developing nuclear, natural gas, coal, biomass, wind, solar, and offshore oil and gas,” he said in a statement. “There is a burgeoning energy exploration industry, hundreds of millions of dollars in new capital investment, and thousands of new jobs at stake if Virginia is not allowed to pursue its innovative and comprehensive energy strategy.”

‘A missed opportunity’

Oil and gas industry groups also were disappointed. “Moving forward with the proposed 2012-17 5-year OCS leasing program is a good first step,” said Erik Milito, the American Petroleum Institute’s upstream and industry operations group director. “However, this is a missed opportunity to open additional areas that could have helped address rising energy demand, create American jobs and reduce the federal deficit.”

“This ill-conceived plan leaves us looking in the same areas we have looked for over a generation and would cast our energy reliability and security lot to the whims of other, often unfriendly nations,” said National Ocean Industries Association President Randall B. Luthi. “While today’s decision is not unexpected, the lack of new access is deeply disappointing, and frankly bears little resemblance to the president’s announcement in March of this year—amid high energy prices—that [his administration] had set the goal of reducing oil imports by one-third by 2025.”

Environmental organizations also were critical. “The president’s Oil Spill Commission put forth a game plan to improve the industry’s safety, but it has yet to be realized,” said Natural Resources Defense Council President Frances G. Beineke, who served on that commission. “Congress has failed to pass a single law to better protect workers or the environment. Industry has not invested sufficiently in developing the technologies needed to prevent future disasters. And the government still needs additional resources and science in order to effectively police an industry that so desperately needs it.”

Lori LeBlanc, executive director of the Gulf Economic Survival Team, said that the organization appreciated the latest proposed 5-year OCS plan with its 12 gulf and 3 Alaska offshore sales. “However, there continues to be tremendous uncertainty within the industry as to the ability of the government to timely approve the necessary plans and permits to enable future projects to move forward,” she continued. “We fear that this air of uncertainty may impair the ability of the industry to invest in currently planned and future lease sales.”

Written comments on the draft programmatic environmental impact statement for the proposed 5-year program will be accepted until Jan. 9, 2012. BOEM also has scheduled public hearings next month on the draft programmatic EIS in nine Alaska communities (Dec. 5 in Wainwright, Dec. 6 in Nuiqsut, Dec. 7 in Kaktovik, Dec. 8 in Fairbanks, Dec. 9 in Anchorage, Dec. 12 in Kotzebue, Dec. 13 in Point Hope, and Dec. 16 in Barrow). Public hearings also are scheduled for Dec. 6 in Washington and Houston; Dec. 7 in Mobile, Ala.; and Dec. 8 in New Orleans.

Contact Nick Snow at nicks@pennwell.com.

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