The Obama administration called for oil and gas drilling in the Atlantic Ocean for the first time since the 1980s, while it also took some Arctic waters off the table for energy exploration, in a draft five-year offshore plan announced Tuesday.
“We continue to consider oil and gas exploration in the Arctic and propose for further consideration a new area in the Atlantic Ocean, and we are committed to gathering the necessary science and information to develop resources the right way and in the right places. We look forward to continuing to hear from the public as we work to finalize the proposal,” Interior Secretary Sally Jewell said.
The Interior Department’s Bureau of Ocean Energy Management offered the coasts of Virginia, North Carolina, South Carolina and Georgia for drilling under the draft plan, which would run from 2017 through 2022. In the Arctic, Cook Inlet, along with what Jewell said was 90 percent of technically recoverable oil in the Beaufort and Chukchi seas, where several oil and gas companies hold leases, also will remain open. The plan includes 10 lease sales in the Gulf of Mexico, but none in the Pacific Ocean or eastern Gulf, which has been off limits since 2006.
While including the Atlantic and maintaining some of the Arctic in the draft plan pleased energy industry officials, they were dissatisfied with a move to permanently take 9.8 million acres of Alaska’s offshore areas off the market.
“We’re one of the only nations that restricts these areas and our ability to explore them,” Erik Milito, director of upstream operations with the American Petroleum Institute, said ahead of the plan’s release.
The administration is required by law to offer up an offshore drilling plan every five years, and it doesn’t require the consent of Congress.
“Here’s what the plan is not — it is not final,” Jewell said in a call with reporters.
Republicans are likely to take shots at the draft plan. Its release comes several days after the White House said it planned to protect 12 million acres of wilderness in the Arctic National Wildlife Refuge, which industry groups and Republicans said violated a 1980 congressional deal to set aside some of that land for future oil and gas production.
Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski, R-Alaska, was incensed by the ANWR decision and the Alaska leasing provisions in the offshore plan, and she pledged to handcuff the administration’s efforts to restrict oil and gas drilling in her state and off its shores.
“What is happening is this double, triple, quadruple whammy,” Murkowski said at a Monday press conference. “Boom, boom, boom, forget it, Alaska. Lock it up, lock it up.”
Environmental groups think they can get Obama to further restrict drilling further in the final plan. They note he has paid much attention to leaving a legacy on climate change. And while offshore drilling is a contentious issue, Obama wouldn’t have to deal with the political ramifications because the plan would go into effect after he leaves office.
“We can make that case to them that all that stuff that [the Obama administration has] done on power plants and coal they can do on oil and gas production in the outer continental shelf,” Athan Manuel, director of public lands protection with the Sierra Club, said in a recent interview.
But political support for offshore drilling has swelled in the Mid- and South-Atlantic states since Obama’s first five-year plan, when the administration decided against allowing drilling off Virginia’s coast after the April 2010 Deepwater Horizon disaster killed 11 workers and spilled more than 3 million barrels of oil into the Gulf of Mexico. Battles over the administration’s energy development policies followed, and the Interior Department overhauled offshore drilling oversight and safety standards.
Atlantic Coast governors have formed a coalition to press the administration to open the area to energy development, which it contends could bring billions in revenue — though much of that is limited by federal law, which splits offshore oil and gas royalties evenly among all states. The Bureau of Ocean Energy Management estimates the Atlantic hosts 4.72 billion barrels of technically recoverable oil and 37.51 trillion cubic feet of technically recoverable natural gas.
Jewell said support from Mid- and South-Atlantic states played a role in including offshore areas in the draft plan, as did resistance from officials in northern Atlantic states in keeping areas off their coasts blocked.
“Input from state legislatures and governors is weighed very heavily,” Jewell said. “Certainly in the Atlantic that played a role”
Democrats and environmental groups had hoped to keep offshore drilling at bay. A group of East Coast Democrats who had pressed Jewell in August to withhold opening the Atlantic were unhappy with its inclusion in the draft plan.
“Offshore oil spills don’t respect state boundaries. A spill off the coast of North Carolina could affect Massachusetts. We saw what happened after the BP spill. My state’s fishing and tourism industry can’t afford that kind of tragedy,” Sen. Ed Markey, D-Mass., said Tuesday.
But opponents scored some victories in the Arctic, as the draft plan formally withdraws from consideration the Barrow and Kaktovik whaling areas in the Beaufort Sea and a 25-mile coastal buffer and subsistence area in the Chukchi Sea — all of which had previously been excluded, but not canceled, in previous plans — and the Hanna Shoal area in the Chukchi Sea, which had not been excluded.
The draft plan also calls for switching to a “targeted” leasing system in the Arctic that industry officials say will discourage investment. The method requires companies to do expensive exploratory work before nominating areas for leasing. After BOEM gathers those nominations, it selects which plots to offer for bids on the open market.
Many oil giants are already cautious about drilling in the U.S. Arctic, which Republicans chalk up to harsh regulations. Royal Dutch Shell, which endured a series of mishaps in the Arctic in 2012 that has led to regulations that are currently being drafted, isn’t sure it will drill there this year event though it holds leases. ConocoPhillips and Statoil also have put their plans on the backburner.
