Phil Taylor, E&E reporter
Published: Thursday, June 28, 2012
The Obama administration today finalized a new five-year oil and gas leasing plan for the outer continental shelf that would allow limited new development in the Arctic but would forgo sales in the Atlantic or Pacific oceans. As expected, the blueprint was panned by industry and Republicans, who argued it backslides from an earlier Obama plan to lease offshore Virginia and could unduly restrict future exploration in the Arctic.
Environmentalists, meanwhile, said the plan promotes risky new drilling in ice-prone Arctic waters in addition to expanding high- risk, ultra-deepwater drilling in the Gulf of Mexico.
But Interior Department officials today said the plan — which includes three potential sales off Alaska and a dozen sales in the western, central and eastern Gulf — is a “cautious but forward- looking” solution that allows access to the nation’s most prospective energy resources. “This is a good plan,” Interior Secretary Ken Salazar told reporters during a news conference. “It’s a smart plan, it’s an aggressive one.”
As announced earlier this week, Salazar said future lease sales in Alaska’s Chukchi and Beaufort seas — tentatively scheduled for 2016 and 2017, respectively — would be subject to further scientific studies and consultations with Native Alaskan communities to determine their location and size. The agency will maintain a 25-mile buffer along the Chukchi coast put in place under the George W. Bush administration to protect subsistence communities. The new plan would also protect two subsistence whaling areas in the Beaufort near Barrow and Kaktovik that have attracted minimal industry interest but have high subsistence value.
Bureau of Ocean Energy Management Director Tommy Beaudreau said the Hanna Shoal, a Chukchi region known for its high density of marine life, will also undergo further study to determine whether it is appropriate for leasing. He also noted the agency has received “significant interest” from industry in leasing the Cook Inlet off south-central Alaska, which has historically lacked demand. BOEM will conduct an environmental impact statement for leasing the area to consider resources such as beluga whales, he said.
“We are taking a cautious approach to leasing in the Arctic that accounts for the Arctic’s unique environmental resources and the social, cultural and subsistence needs of Native Alaskan communities, and draws from the best available science as well as any new information that we may learn from activity on current leases,” Salazar said.
While the plan was significantly delayed by the Deepwater Horizon disaster in the Gulf, agency officials said the next lease sale in the Gulf will proceed as planned by the end of the year.
Virginia and politics
The leasing plan, which is required under the Outer Continental Shelf Lands Act, is one of the executive branch’s biggest energy policy decisions. With today’s plan — which is subject to two months of congressional review but needs no approval — President Obama has broken sharply from a George W. Bush administration plan in 2008 that opened virtually all of the nation’s coastline.
As such, the plan could play a prominent role in the presidential campaign as Republican presidential hopeful Mitt Romney seeks to highlight policy wedges between himself and Obama, particularly in the battleground state of Virginia (Greenwire, May 3).
Rep. Jim Moran (D-Va.), an opponent of Atlantic leasing, today said that Obama made the right decision to forgo a Virginia lease sale but that he’s unsure whether it will benefit him politically. “I’ve made it clear the jobs in the Tidewater areas devoted to naval operation are far more important to us than any illusory revenue that might be gained by offshore drilling,” he told E&ENews PM. “I think what plays favorably to the president’s election bid is he’s willing to be a responsible chief executive and make the right decisions irregardless of the political consequences,” he added. “And I think this is one of those right decisions regardless of the political consequences.”
One former Bush administration official said he, too, believes the absence of leasing off the Virginian coast could factor in the 2012 election. “Without legislation, these are the rules and the only place people can look for the next five years,” the official said. “The fact that this plan doesn’t have Virginia probably creates some openings.”
Salazar today said Atlantic development was excluded because of a lack of resource data and infrastructure to respond to spills, as well as the concerns of neighboring states. “Virginia is not a stand-alone state on the Atlantic,” he said, adding that conversations continue with the Defense Department to eliminate remaining conflicts with training exercises. “There are other states that share the Atlantic, and their views need to be taken into account.”
The decisions in the Arctic also drew a range of reactions from environmentalists and Alaska’s delegation. Sen. Lisa Murkowski (R-Alaska) said she was concerned by the agency’s decision not to hold annual lease sales. “I’m also concerned by the administration’s plans to place undisclosed amounts of acreage off limits and impose additional layers of regulation on the Arctic — above and beyond rules already in place,” she said.
Andrew Hartsig, the Ocean Conservancy’s Arctic program director, said that he was disappointed the Arctic was included in the leasing plan but that he appreciated the decision to exclude certain areas from the leasing program, in addition to emphasizing science-based planning.
“Interior must use that time to develop and implement a comprehensive science and monitoring program, identify and protect additional important ecological and subsistence areas, and implement Arctic- specific standards that ensure effective oil spill response in icy waters,” he said.
But Erik Milito, the American Petroleum Institute’s group director of upstream and industry operations, said the plan “will not allow us to realize the full benefits from safe and responsible development of America’s oil and natural gas resources, continuing a pattern of delay and unnecessary restraint. While vitally important, the western and central Gulf of Mexico areas included in this proposed offshore program are not ‘new’ areas,” he added. “We look to the administration and Congress to begin working on a new plan that opens areas in the eastern Gulf, the Pacific and the Atlantic, such as offshore Virginia and South Carolina, where we continue to see bipartisan support for new offshore leasing.”
Special thanks to Richard Charter