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State, industry criticize Virginia's absence from 5-year OCS plan

US Sec. of the Interior Ken Salazar’s two stated reasons for keeping a sale off Virginia out of the proposed 2012-17 Outer Continental Shelf program—lack of infrastructure and possible interference with military activities—make no sense, one of the state’s top officials said.

Witnesses from two oil and gas industry associations also criticized Salazar’s decision as they testified Dec. 6 at a US Bureau of Ocean Energy Management hearing on the program’s draft programmatic environmental impact statement.

“As you well know, in regard to having the requisite infrastructure, it should be self-evident that [it] will develop around the process,” Virginia Natural Resources Sec. Douglas W. Domenech testified. Production infrastructure would come only after a sale was scheduled, and prejudging an area’s infrastructure simply short-circuits the process and essentially eliminates the possibility of opening any new US OCS area for leasing and development, he said.

“Virginia has one of the most robust ports in the United States with extensive heavy marine construction capabilities,” Domenech told BOEM Director Tommy L. Beaudreau, Deputy Director Walter D. Cruikshank, and Environmental Assessment Division Chief James F. Bennett.

Domenech said potential conflicts with military operations were not mentioned when Salazar and US President Barack Obama approved having a Virginia offshore lease sale in March 2010. Salazar listed possible conflicts with military uses and a lack of oil and gas systems and spill preparedness and response capacity as reasons for not including one in the proposed 2012-17 OCS program when he announced it on Nov. 9.

High-level discussions

In the gulf and other OCS areas, US military services and the oil and gas industry have found ways to work through possible user conflicts, Domenech said. “In fact, we have been having such discussions with high-level personnel in the office of the US Defense secretary related to lease sale 220 and potential offshore wind development,” he told the panel. “We are making great progress in that regard.” Talks are scheduled to resume on Jan. 6, he told OGJ after he testified.

Domenech said he was confident that the US military services; oil and gas industry; and federal, state, and local government agencies could work out a plan to share access to waterways off Virginia that would not conflict with critical military uses as they have in the gulf. “Many of these issues can be ameliorated through the adoption of an alternative lease area map” proposed by Virginia’s two US senators, Democrats Mark R. Warner and James A. Webb, he added.

Witnesses representing the American Petroleum Institute and National Ocean Industries Association separately commended DOI and BOEM on moving forward to develop the 2012-17 programs while criticizing them for not including more OCS areas off the Lower 48 states, including coastal Virginia.

“We need to be doing the right things today to be able to meet our energy needs tomorrow,” API Upstream and Industry Operations Director Erik Milito maintained. “This 5-year program is flat-footed energy policy that fails to move us in the right direction. It maintains a status quo that will not adequately help prepare us for a strong energy future.”

DOI said some areas were not included because they lacked resource potential data, but failed to recognize that such data likely won’t be generated unless such areas are included in a 5-year program and leasing is envisioned, he added. Seismic companies generate the data on a speculative basis, hoping to sell it to operators hoping to purchase leases, Milito told the panel. The government also gets a copy as part of the permit conditions, he added. “With no lease sale scheduled in the Atlantic, and thus no potential customers, seismic companies have no incentive to gather new data,” he noted.

Witnesses from major environmental organizations and private individuals said BOEM should not have included two Arctic OCS leases sales late in the 5-year program without requiring development of a full spill response infrastructure and more scientific data about potential impacts. DOI and the agency also were remiss in not considering possible global climate change consequences, they said.

Contact Nick Snow at nicks@pennwell.com.


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