The Obama administration’s latest five-year offshore oil and gas plan is worrying industry groups representing some of the largest segments of job creation and investment in the country, as the Interior Department holds its last public meeting on the plan in Washington on Tuesday.
“We continue to be troubled by the administration’s short-sighted policy of limiting oil and natural gas production on federal lands,” the American Chemistry Council said ahead of the meeting.
The group represents some of the world’s largest manufacturers of chemicals, which have created new inroads and factory development due to the boom in crude oil and natural gas production from shale in recent years. Companies such as Dow and DuPont want production to remain high, which keeps the cost of their petrochemical supplies low.
“For three years straight, the Department of the Interior has withdrawn or withheld from development major portions of the [outer-continental shelf] – ignoring the needs of American manufacturers who rely on secure and affordable energy supplies in order to compete in global markets,” the group said.
The administration’s March offshore drilling plan, which covers leases for 2017-2022, won’t be finalized until the end of the year. However, the plan already eliminated an earlier proposal to include leases off the Atlantic coast for the first time. The decision was criticized as administration backpedaling due to increased pressure from environmental groups for the president to secure a global deal on climate change by keeping all fossil fuels in the ground. Many scientists blame fossil fuels for raising the Earth’s temperature, resulting in more severe weather, drought and sea-level rise.
Environmentalists claimed the administration reversal as a victory for climate change and its campaign to stop fossil fuel development.
The plan would open new leasing in areas of the Gulf of Mexico while considering whether to open new offshore drilling in the Arctic.
On the supply side, oil and gas producers say the five-year plan would kill jobs while driving up energy costs for consumers.
“The five-year program is a critical part of our nation’s ability to secure affordable and reliable energy and create jobs for future generations of Americans,” said Eric Milito, the American Petroleum Institute’s group director of Upstream and Industry Operations, on a call with reporters Tuesday.
“Too many promising areas are already excluded from the proposal, taking off the table thousands of potential jobs and billions of dollars in potential government revenue,” he said. “Knowing that oil and natural gas will be needed for many more decades to come, the Department of the Interior should promote robust development of U.S. offshore energy resources and recognize the Arctic and Gulf of Mexico as core components of the five-year program.”
Outside the downtown hotel where the public meeting was being held, environmental groups assembled to protest the offshore drilling plan, favoring the end of all lease sales. Democratic Sen. Jeff Merkley of Oregon joined the protesters organized by the activist federation Environment America. Merkley is lead sponsor of a bill that would ban all new drilling on public lands. Democratic presidential candidate Sen. Bernie Sanders of Vermont is a co-sponsor of the bill.
The Interior Department’s comment period on the new plan extends until midnight on Monday. The agency will review the comments over several months, in which it may, or may not, adjust the plan in its final version to be issued later in the year.
