Administration seeks to open 90% of OCS to offshore drilling

Secretary of the Interior Ryan Zinke Secretary of the Interior Ryan Zinke

JANUARY 5, 2018 — U.S. Secretary of the Interior Ryan Zinke has announced what he called "the next step for responsibly developing the National Outer Continental Shelf Oil and Gas Leasing Program (National OCS Program) for 2019-2024."

The Trump Administration proposes to make over 90 percent of the total OCS acreage and more than 98 percent of undiscovered, technically recoverable oil and gas resources in federal offshore areas available to consider for future exploration and development. By comparison, says the Department of the Interior, the current program puts 94 percent of the OCS off limits.

The program announced proposes the largest number of lease sales in U.S. history. And though it has been warmly welcomed by the American Petroleum Institute (API) and the National Ocean Industries Association (NOIA), it is likely to face challenges from environmental groups and many coastal states.

Florida Gov. Rick Scott (R) has already said he opposes the Trump administration's proposal to expand drilling off the coast of Florida.

"I have already asked to immediately meet with Secretary Zinke to discuss the concerns I have with this plan and the crucial need to remove Florida from consideration," he said.

In his statement yesterday, Secretary Zinke said that his announcement "lays out the options that are on the table and starts a lengthy and robust public comment period. Just like with mining, not all areas are appropriate for offshore drilling, and we will take that into consideration in the coming weeks. The important thing is we strike the right balance to protect our coasts and people while still powering America and achieving American Energy Dominance."

The Draft Proposed Program (DPP) includes 47 potential lease sales in 25 of the 26 planning areas – 19 sales off the coast of Alaska, 7 in the Pacific Region, 12 in the Gulf of Mexico, and 9 in the Atlantic Region. This is the largest number of lease sales ever proposed for the National OCS Program's 5-year lease schedule.

Release of the DPP is an early step in a multi-year process to develop a final National OCS Program for 2019-2024. The 2017-2022 Five Year Program will continue to be implemented until the new National OCS Program is approved.

The DPP includes 12 sales in the Gulf of Mexico, one of the most productive basins in the world and where oil and gas infrastructure is well established. The draft proposal continues the current approach to lease sales in the Gulf of Mexico by proposing 10 biannual lease sales in those areas of the Western, Central, and Eastern Gulf of Mexico that are not subject to Congressional moratorium or otherwise unavailable, and two sales in the portions of the Eastern and Central Gulf of Mexico after the expiration of the Congressional moratorium in 2022. This is the first time the majority of the Eastern GOM Planning Area would be available for leasing since 1988. Alaska:

The DPP proposes 19 lease sales in the Alaska Region (3 in the Chukchi Sea, 3 in the Beaufort Sea, 2 in Cook Inlet, and 1 sale each in 11 other program areas in Alaska). These 11 program areas consist of the Gulf of Alaska, Kodiak, Shumagin, Aleutian Arc, St. George Basin, Bowers Basin, Aleutian Basin, Navarin Basin, St. Matthew-Hall, Norton Basin, and Hope Basin. No sales are proposed in the North Aleutian Basin Planning Area that has been under Presidential withdrawal since December 2014. Pacific:

The DPP proposes 7 lease sales in the Pacific Region (2 each for Northern California, Central California, and Southern California, and 1 for Washington/Oregon). There have been no sales in the Pacific Region since 1984. Currently there are 43 leases in producing status in the Southern California Planning Area. Atlantic:

The DPP proposes 9 lease sales in the Atlantic Region (3 sales each for the Mid- and South Atlantic, 2 for the North Atlantic, and 1 for the Straits of Florida). There have been no sales in the Atlantic since 1983 and there are no existing leases.

In conjunction with the announcement of the DPP, the Department of the Interior is also publishing a Notice of Intent (NOI) to prepare a Draft Programmatic Environmental Impact Statement (EIS), in accordance with the National Environmental Policy Act.

INDUSTRY WELCOMES MOVE

API welcomed the new proposal.

"This new offshore leasing plan is an important step towards harnessing our nation's energy potential for the benefit of American energy consumers," said API Upstream Director Erik Milito. "The ability to safely and responsibly access and explore our resources in the Arctic, Atlantic, Pacific and the Eastern Gulf of Mexico is a critical part of advancing the long-term energy security of the U.S. It will also encourage economic growth, spur manufacturing and investment, create thousands of additional U.S. jobs, and strengthen our national security."

"The oil and natural gas industry has the experience and advanced technology to develop the nation's offshore energy safely," he said. "We are continuously developing and improving safety standards, programs, new technologies, and best practices to protect our workers, the environment and marine life. And decades of experience have shown that offshore operations safely coexist with military activity, the commercial and recreational fishing industries, and coastal tourism."

National Ocean Industries Association (NOIA) President Randall Luthi issued the following statement on DOI's Draft Proposed Program:

"With 94 percent of our nation's outer continental shelf (OCS) currently and unnecessarily off limits to oil and gas leasing and exploration, NOIA welcomes the bold and broad offshore leasing proposal released today by the Department of the Interior.

"It is time for a truly national discussion about increasing our offshore energy capabilities. To kick off a national discussion, you need a national plan – something that has been lacking the past several years. President Trump started the offshore energy discussion with his Executive Order, this plan continues that dialogue.

"The energy resources on the OCS are vital to the nation's economic prosperity, and polls have repeatedly shown that most Americans want more energy to be produced domestically, including looking for more oil and natural gas resources off our shores. Yet, the United States has severely restricted oil and gas exploration off our shores, even as Canada, Mexico, Brazil, Norway, Russia and countries in Africa are actively exploring their own offshore areas.

"Global energy demand is expected to increase by 28 percent by 2040 and traditional energy sources, including oil and gas, are projected to meet about 77 percent of the demand. Opening more U.S. offshore areas for exploration would help meet the growing demand for energy while providing more jobs, new economic activity and increased energy security here at home.

"The 2019-2024 National Offshore Oil and Gas Leasing Draft Proposed Program (DPP) is the second step in a multi-year process that will determine a future leasing schedule, NOT a future drilling schedule. The process involves several rounds of public participation from stakeholders, including local communities, and several layers of environmental review. Once the leasing program is finalized, many months from now, future decisions on possible drilling must undergo their own series of public and environmental reviews. Similarly, any future efforts to actually produce offshore oil and natural gas will be subject to yet another round of review.

"The DPP is an important benchmark towards achieving the Administration's goal of U.S. Energy dominance. NOIA commends Secretary Zinke and his team at the Interior Department for offering the broadest possible acreage for potential inclusion in our nation's next offshore leasing program. We look forward to working cooperatively and enthusiastically with stakeholders, including states, local communities, and consumer groups, and with the Bureau of Ocean Energy Management (BOEM) as the 2019-2024 offshore leasing program is developed."