Unlocking the Atlantic shelf

May 15, 2017
Attendees of the annual Offshore Technology Conference over May 1-4 in Houston were more optimistic this year.

Tayvis Dunnahoe
Exploration Editor

Attendees of the annual Offshore Technology Conference over May 1-4 in Houston were more optimistic this year. A new administration, the promise of fewer regulations, and the opening of exploration acreage along the US Continental Shelf (OCS) signal progress for ramping up offshore operations.

Sec. of the Interior Ryan Zinke began the process of expanding offshore drilling on May 8. Secretarial Order 3550 directed the US Bureau of Ocean Energy Management to develop a 5-year federal OCS leasing program that gives full consideration to tracts off Alaska, South and Mid-Atlantic states, and the Gulf of Mexico (OGJ Online, May 2, 2017). Zinke told OTC attendees that BOEM is instructed to give expedited consideration to seismic testing on the OCS.

Early exploration

While Alaska and the Gulf of Mexico are known to hold large quantities of oil and gas, "Little is known about this [Atlantic shelf] area, but it does not appear to be as attractive as other regions," then-Mobile Oil Vice-Pres. T.W. Nelson told OGJ at an offshore conference in 1966 (OGJ, July 4, 1966, p. 54). Later that year, the industry would shoot some of the earliest 2D seismic jobs along the Atlantic Coast. By 1988, early explorers had acquired seismic coverage for most of the Atlantic seaboard.

Despite having these data sets, the area's potential remains unknown.

The Washington Post reported on Jan. 14, 1979: "Despite Gulf Oil Corp.'s announcement last week that it has abandoned the seventh wildcat well in the Baltimore Canyon off the mid-Atlantic Coast, government geologists remain optimistic about the prospects for finding significant amounts of oil and gas there." Baltimore Canyon, which lies 70 miles east of Atlantic City, NJ, yielded one small gas discovery for a Texaco Inc.-led consortium around this time, but subsequent wells proved disappointing. Former Mobil Oil Corp. fought hard in 1991-92 to drill the Manteo prospect off North Carolina but failed to permit the well (OGJ, July 22, 1991, p. 21). From 1977-83 the petroleum industry drilled 32 dry wildcats off the mid-Atlantic region.

The Carolina trough could hold as much as 690 million bbl of oil and 16.25 tcf of gas but no commercial discovery has been made to date (OGJ, Feb. 17, 1992, p. 84). Advanced seismic tools could potentially confirm these resources but market and political forces place development well into the future.

Today's market forces

Exploration companies are optimistic, but the downturn has increased caution for entering unproved areas.

Even if seismic along the Atlantic Coast revealed landmark potential for oil and gas, development would likely be shelved in the near term as capital remains constrained. The lack of infrastructure, the need to retool onshore facilities, and the general historical resistance from many of the 13 states along the Atlantic seaboard will not equate to an Atlantic shelf oil boom without major investment (OGJ Online, July 28, 2014).

An alternative

As Atlantic OCS exploration remains uncertain, offshore wind energy is entering the region. On Dec. 12, 2016, Deepwater Wind powered up its Block Island Wind Farm off Rhode Island. The 30-Mw, five-turbine facility is the first offshore wind farm with commercial operations in the US.

The utility company announced its South Fork Wind Farm off Long Island on Jan. 25, which will consist of 15 advanced offshore wind turbines with a capacity of 90 Mw. Pending permitting schedules, construction is expected to start in 2019 and start-up operations by 2022. The 15-turbine Skipjack Wind Farm is in the early planning phase for Maryland's eastern shore and will generate 120 Mw of electricity with construction beginning in 2021.

The company also is pursuing a giant 1,000-Mw wind farm, Deepwater ONE, to supply New England and eastern Long Island from federal waters over the horizon. The phased project will eventually consist of more than 200 turbines with 1 Gw capacity.

Despite the policy roadblocks faced by the oil and gas industry, energy is finding its footing on the Atlantic Coast.