API leads industry call for more OCS access in next 5-year program

The Obama administration should consider all parts of the US Outer Continental Shelf for leasing in the 2017-22 OCS program it has begun to prepare so future national energy policy options can be maximized, the American Petroleum Institute and 10 other oil and gas trade associations jointly said.

At this point in the program’s preparation, “all OCS areas with the potential to generate jobs and new revenue by advancing America’s energy renaissance should be considered for inclusion in the Draft Proposed Plan,” they said in comments submitted on Aug. 13 to the US Bureau of Ocean Energy Management.

“Anything less undermines the comprehensive process set forth in the OCS Lands Act and could have significant impacts on US energy policy options well into the future,” warned the group, which included the National Ocean Industries Association, Independent Petroleum Association of America, American Exploration & Production Council, Natural Gas Supply Association, and America’s Natural Gas Alliance.

The US Oil & Gas Association, International Association of Geophysical Contractors, Petroleum Equipment Suppliers Association, Energy Equipment & Infrastructure Alliance, and Alaska Oil & Gas Association also joined API in asking new OCS areas of the Atlantic Ocean, eastern Gulf of Mexico, and the Pacific Ocean be considered in addition to the central and western gulf and Alaska.

The move would create significant domestic economic benefits as well as improve the US energy position, the comments said. “Expanding opportunities for US offshore energy production would create hundreds of thousands of new jobs, raise billions of dollars for the government, and strengthen America’s international diplomacy and national security,” said Andy Radford, API’s senior policy advisor for offshore, during a teleconference with reporters.

He said allowing the industry to purchase, explore, and develop leases in more areas could create nearly half a million jobs and boost domestic energy production by 3.9 million boe/d, according to studies by Wood Mackenzie and Quest Offshore Resources for API.

‘Within our reach’

“These incredible resources are within our reach,” Radford said. “This is not an issue to be considered lightly. Decisions the government makes now will impact our economy and our ability to exert diplomatic influence for decades.”

In the comments, API and the other groups also argued that more US oil and gas production will be needed to meet future demand, offshore development is an integral part of US energy policy, major safety and environmental reforms have occurred since the 2010 Macondo deepwater well accident, and industry activities can coexist with other ocean uses.

Radford noted that among the 87% of the OCS that is now unavailable, “there are notable gaps off the East Coast we think need to be explored, but we won’t know what’s there until we can get out there and look.” He said, “I also think geological trends in the Gulf of Mexico don’t stop with the artificial barrier the government has erected. Potential resources in the Pacific could be reached from existing platforms.”

Industry interest in the OCS off Alaska also is strong, as evidenced by sales in 2006-07 for the Chukchi and Beaufort seas; in state waters in Cook Inlet; and in the Aleutian basin, which the president has put off-limits under a moratorium, he continued.

“If you’re looking to develop reserves offshore, you’re obviously looking at a longer time frame than for development,” Radford said. “We need to explore all areas so we can continue producing.”

Contact Nick Snow at nicks@pennwell.com.

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