It's Offshore Technology Conference week, when petroleum industry leaders from around the world unveil their best work in a country trying to keep their work away from its coasts.
In Houston, OTC conferees will hear the latest in such areas as arctic exploration, subsea monitoring, ultradeep-water production, and environmental protection. And in Washington, D.C., the Bush administration will play more peek-a-boo with a federal offshore leasing program that looks more restrictive with each new glimpse.
Offshore industry capability improves in giant strides. Design breakthroughs steadily make equipment lighter, stronger, and cheaper. The industry can drill and produce in ever-increasing water depths under the toughest of conditions. And technology isn't just helping the economics of offshore operations. It's also improving safety of an inherently hazardous business.
POLICY LAGS TECHNOLOGY
It would be nice if offshore policy in the world's largest oil consuming country advanced in rough cadence with industry knowhow. Instead, it has allowed leasing to stall outside the Gulf of Mexico. And changes under consideration by the Interior Department would slow action there, too.
Interior has two problems. One is reluctance by the administration to further sully its environmentalist credentials. The Bush White House has shamed itself environmentally by refusing to spend billions of dollars on vaguely understood and possibly nonexistent problems. It doesn't dare try to slow growth in oil import dependency by encouraging companies to drill offshore. On Outer Continental Shelf leasing, therefore, it dissembles.
Interior's other problem is apparent misconstrual of its responsibility. The law directs it to conduct lease sales for the purposes of assessing and developing the U.S. oil and gas resource-activities that ultimately benefit energy consumers. Interior acts as though its job is to arbitrate claims of oil companies, antidevelopment activists, and coastal governments. Wrong. That's what courts are for. To repeat, Interior's job is to conduct lease sales. And its performance, owing to this confusion and congressional obstructionism, is abysmal outside the gulf.
Interior Sec. Manuel Lujan acknowledges that leasing is too slow. He frequently and properly complains about the annual budgetary moratoriums by which Congress blocks nongulf leasing. Then he simply surrenders.
Last month, the secretary hinted that Interior's 5 year OCS sale schedule will reduce the pace and extent of leasing. Moreover, the department might offer revenue-sharing solatium-not bribes, Lujan insists-to balky coastal communities. Where that doesn't work, it might use taxpayer money to help states cashier current leaseholders.
That's not a leasing program. A leasing program looks something like the areawide system underlying the Gulf of Mexico's drilling surge. Lujan's ideas, which don't include areawide leasing, amount to appeasement.
LAPSES HURT CONSUMERS
But what the heck? Oil companies can drill elsewhere. Coastal residents can relax. Environmentalists can advance to whatever comes next in the hierarchy of imminent threats to nature. And U.S. energy consumers-whose interests go begging in all this-should be outraged. It is their native claim to petroleum supply from the federal offshore that Interior proposes to abridge. It is their tax money with which the agency proposes to buy down resistance to its retrograde scheme.
For leadership in petroleum technology, as OTC shows, the world still looks to the U.S. For leadership in natural resource management, it can find better examples elsewhere.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
