America Needs Forward-Looking Offshore Energy Plan

Mark Green
Posted May 20, 2016

Near year’s end the federal Bureau of Ocean Energy Management (BOEM) is scheduled to release its offshore oil and natural gas leasing program for 2017-2022.

For more than a year BOEM has methodically worked to craft a program that will blueprint offshore development into the next decade and beyond, developing drafts, receiving comments from the public as well as inputs from elected officials in affected states.

With the United States emerging as the world’s leading producer of oil and natural gas, planning America’s offshore oil and gas development has never been more important. The United States must have an offshore oil and natural gas program that reflects America’s energy superpower status. API Executive Vice President Louis Finkel, during a conference call this week with reporters:

“The U.S. needs forward-looking energy policy. … Given the long lead times for offshore development, failing to include the Arctic and other potentially energy-rich areas in the leasing plan puts us on a path back to energy scarcity and dependence. … Let the past decade and the successes of development of private lands be a guide. By exploring new onshore areas and developing previously technically unreachable energy sources, the Marcellus and other shale formations have proven invaluable as energy, economic and geopolitical resources for the U.S. We need to apply this vision to the development of offshore energy.”

Unfortunately, the current version of BOEM plan lacks that kind of vision. This certainly appeared to be on the minds of Senate Energy and Natural Resources Committee members during a hearing that included BOEM Director Abigail Ross Hopper as one of the witnesses. Senators looking for reassurances on BOEM’s program development must have left disappointed.

Joseph Mason of LSU’s College of Business noted that BOEM’s current proposal for 13 potential lease sales is a decrease from the previous five-year plan’s 15 lease sales and the 16 planned sales in the program before that. An earlier BOEM draft included a single lease sale in the Atlantic offshore, but that was dropped despite strong support in the affected states – Virginia, North Carolina and South Carolina – as well as nationally:

Senators at this week’s hearing were concerned that BOEM could drop Arctic lease sales as well and for the program’s overall approach. Sen. Lisa Murkowski of Alaska:

“It pains me to say this, but we now effectively have a Gulf of Mexico leasing program, and the shadow of a program for three major planning areas in Alaska. The Department has concluded after years of study that just 13 percent of our nation’s OCS acreage should be available for leasing. It has canceled sales in my home state, where development has overwhelming support, and produced only a ‘bare minimum’ plan for 2017 through 2022. I find that unacceptable.”

Murkowski suggested BOEM’s current program draft is shortsighted and could put the nation’s future energy security at risk:

“We are at a rare moment where we can plan ahead to meet our future needs, without facing a supply or price-related emergency. Yet, we are not taking advantage of it. By choosing not to produce here, we are telling other countries – some of them rather nefarious – that we would rather buy from them. And we are giving away the jobs, the revenues, the growth, and the security that would all come with that energy development. … I am disappointed by the proposed Five-Year Program for 2017 through 2022. Oil prices may be relatively low today, but they will not stay that way, especially if we refuse to provide access to new supply. Instead, we will find ourselves giving away the gains of recent years, as our imports once again rise, our economy once again suffers, and we once again find ourselves at the mercy of OPEC.”

Hopper had to defend BOEM’s process. Murkowski questioned the agency’s impartiality in developing the program, calling attention to a recent BOEM tweet that included a photo of Hopper with opponents of Alaska offshore leasing:

Great meeting w/ Tribal Council of Native Village Point Lay & @alaskawild reps re: opposition to #Arctic drilling. pic.twitter.com/9xPULRSgv0

— BOEM (@BOEM_DOI) May 18, 2016

Hopper said the bureau tweets out lots of photos of from its meetings with stakeholders but couldn’t point to a specific tweeted photo of her with supporters of Alaska offshore leasing. Later she apologized if the tweet implied BOEM isn’t impartial. Murkowski:

“It doesn’t necessarily show me that there’s impartiality within BOEM. I looked at it and said, you know, how do we not conclude that the die is already cast and that your agency has already decided what it is you’re going to be doing? … I looked at it and this would appear to me that you’re not acting with the level of impartiality that we expect the agency to do.”

Likewise, Sen. Bill Cassidy of Louisiana challenged BOEM’s analytic approach in developing the offshore leasing program:

“I have a sense BOEM decided what they wanted and they worked backwards to find rationale.”

The offshore leasing program is too important to U.S. energy and national security and to job creation and economic growth to be developed in a manner that starts with a conclusion then goes about trying to justify it. Energy is a bipartisan, and policies affecting America’s energy future – like the offshore leasing program – should evenly take into account economic benefits and public support. These policies should not be hijacked by ideological agendas.

Finkel told reporters the successful experience and environmental safeguards in the Gulf of Mexico apply equally to other parts of the Outer Continental Shelf – and in particular to the Atlantic and Alaska:

“Already, the administration has removed the Atlantic from the program, and there are activists suggesting that BOEM’s plan should also remove the Arctic. But this is short-sighted. … Leaving out offshore Alaska would put the U.S. at a serious global competitive disadvantage, considering that Russia, Iran, and other countries are moving rapidly to develop oil and gas resources.”

More Finkel:

“If the U.S. is to remain an energy leader and stay competitive at a global level, we must have the foresight to plan ahead. We have an enhanced system of safety with increased capabilities to prevent, contain and respond to any potential incident, and we should not sit idly by while other countries advance technologies and develop resources in areas such as the Arctic and the Atlantic. We urge lawmakers to seize this opportunity to create jobs and support America’s growth as a global energy superpower by lifting outdated roadblocks to safe and responsible energy development. American consumers, American businesses and future generations need energy programs from the Department of the Interior to align with today’s energy realities.”