Eastern gulf should be priority in Trump OCS order’s wake, API says

Facilitating exploration and development in the eastern Gulf of Mexico should be a top priority as the US Department of the Interior reviews its US Outer Continental Shelf decisions under President Donald J. Trump’s Apr. 28 offshore oil and gas executive order, an American Petroleum Institute official recommended on May 1.

Facilitating exploration and development in the eastern Gulf of Mexico should be a top priority as the US Department of the Interior reviews its US Outer Continental Shelf decisions under President Donald J. Trump’s Apr. 28 offshore oil and gas executive order, an American Petroleum Institute official recommended on May 1.

The US Outer Continental Shelf’s eastern gulf region is close to existing transportation systems and processing plants, making it possible to tap resources there sooner than other OCS areas now off-limits to oil and gas activity, API Industry and Upstream Operations Group Director Erik Milito said.

The process could take years, but the industry and US Department of Defense historically have worked well together along the Gulf Coast, he told reporters during a teleconference. Congress also would either need to remove a moratorium on most of the eastern gulf that was part of the 2006 Gulf of Mexico Energy Security Act or let it expire on June 30, 2022, Milito said.

“The industry’s history with the US military shows we’ve worked compatibility together over time,” he explained. “Over the past several years, we have continually updated the military on improvements we have made in offshore production tiebacks and subsurface operations, for example. The military takes this effort very seriously and issues maps of where it believes oil and gas development can occur without interfering with its own operations.”

Then-US Interior Sec. Sally Jewell said in March 2016 that possible interference with Mid-Atlantic offshore military operations contributed to DOI’s deletion of a 2021 lease sale off Virginia from the 2017-22 OCS management plan (OGJ Online, Mar. 15, 2016). API believes the decision was politically motivated and not based on military concerns, Milito said on May 1.

“Given Friday’s executive order, we expect DOI would have to go back and amend the 5-year OCS leasing program or begin developing a new one,” he continued. “This could take 2-3 years. Under those circumstances, a new program would have to be developed for the 2019-24 period.”

Milito said that opening the US Atlantic and Pacific coasts to exploration potentially could lead to another 1 million b/d of domestic production. “We want to make sure that any Arctic rules meet safety and environmental objectives with a public process to make sure operations there are safe and environmentally responsible,” he said.

“The industry has worked closely with the government for decades now to provide recommendations for ways to enhance the regulatory regime through prevention and intervention,” Milito said. “We want to have cost-effective regulations in place and would like any administration to periodically review its requirements and find any that can be reformed or removed without compromising safety and the offshore environment.”

Contact Nick Snow at nicks@pennwell.com.

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