Next 5-year OCS plan to include South, Mid-Atlantic G&G data

The US Department of the Interior’s next 5-year Outer Continental Shelf oil and gas program will likely include fresh geologic and geophysical (G&G) data for the South and Mid-Atlantic OCS, US Bureau of Ocean Energy Management Acting Director Walter D. Cruickshank said.

BOEM expects to issue a record of decision on the matter “fairly soon this summer,” he told reporters in a June 13 teleconference announcing the agency’s request for information as the first step in developing the 2017-22 OCS leasing program. Comments will be accepted until July 30.

Information is being sought for all 26 OCS planning areas, Cruickshank said. BOEM intends to have the new program ready by July 1, 2017, he said.

Rene Orr, BOEM’s strategic resources chief who also participated in the teleconference, said the draft proposed program, which is the next step, will be the first announcement of areas that will be included for possible oil and gas leasing in the 2017-22 period.

“That will begin the official scoping process,” she said. “We will meet with state representatives and others if we’re asked to. In addition, through the [National Environmental Policy Act] process, there will be public hearings and public scoping.”

Offshore alternative energy planning will be handled separately in a similarly process which also will include extensive public input, Cruickshank said.

‘Thorough and open’

In a statement, US Sec. of the Interior Sally Jewell said development of the next 5-year OCS program would be “a thorough and open process that incorporates stakeholder input and uses the best available science to develop a proposed offshore oil and gas program that creates jobs and safely and responsibly meets the nation’s energy needs.”

Orr noted, “We update our resource assessments with each 5-year program.” BOEM plans to issue a final programmatic environmental impact statement on possible G&G activities along the Atlantic OCS from Delaware to midway down Florida’s east coast. Nine offshore seismic survey firms have completed applications to begin work there.

The companies still will need to go through a lengthy permitting process, including site-specific EISs, once BOEM announces its ROD, according to Andy Radford, an American Petroleum Institute senior policy advisor specializing in offshore matters.

“At that point, permits can be issued,” he told reporters during a June 13 teleconference. “While we hope the process can move quickly, we think the first few times will be slow. I would hope that next year at this time, we’ll have some companies out there collecting data.” That should provide enough time to gather data to help producers decide whether to bid for South and Mid-Atlantic offshore leases during the 2017-22 period, he added.

Radford said the Obama administration said it was considering opening the Atlantic and eastern Gulf of Mexico for leasing in 2010 before the Macondo deepwater well accident and crude oil spill raised serious questions about offshore oil and gas operating capabilities and the federal regulatory regime.

“Since that time, the government and industry have both made great strides in safety and improved the regulation and standards,” he continued. “I think we should consider whether we’ve done enough to get back to the eastern gulf and open the Atlantic for leasing.”

Beneficial impacts

Radford said a recent Quest Offshore Resources study concluded that oil and gas development in the US Atlantic could create nearly 280,000 jobs along the East Coast and across the country, make the US economy expand by as much as $23.5 billion/year, and add 1.3 million boe/d to US production. “That equals about 70% of current production from the Gulf of Mexico,” Radford said.

A separate Wood Mackenzie study found that developing oil and gas resources on the eastern gulf and Pacific OCS would generate more than 200,000 jobs, add $218 billion to the US economy, and produce another 2.6 million boe/d, he indicated.

“Including these areas in the next leasing plan would send a signal to the markets and to the world that America’s oil and gas renaissance is here to stay,” the API official said.

National Ocean Industry Association Pres. Randall B. Luthi said BOEM’s June 13 announcement was an important first step, but noted the current program included no new access. This has put the US far behind other nations actively pursuing offshore oil and gas development, particularly in the Atlantic Basin and the Arctic, he pointed out.

“Canada, Mexico, Venezuela, Brazil, Norway, Russia, Cuba, and West African nations are examples of countries actually moving ahead with Atlantic and Arctic offshore exploration and development plans,” said Luthi, who previously directed BOEM’s predecessor agency, the US Minerals Management Service.

“Contrast that with the United States, where almost 87% of the OCS has been off-limits for decades to even [G&G] surveys, let alone exploratory drilling,” he said.

Contact Nick Snow at nicks@pennwell.com.

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