US proposes offshore oil and gas leasing expansion

Friday, January 5, 2018

The Trump administration is taking steps that could ultimately lead to a significant expansion of U.S. outer continental shelf acreage available for oil and gas leasing.

Under federal law, the U.S. Bureau of Ocean Energy Management is charged with administering site leasing for energy development on the outer continental shelf. The Outer Continental Shelf Lands Act requires the Secretary of the Interior, through BOEM, to develop a five-year national plan for oil and gas sales in federal waters. The law requires the Secretary to balance criteria including environmental impacts, energy needs and resources, and adverse effects on the coastal zone.

On January 4, 2018, Secretary of the Interior Ryan Zinke announced a new Draft Proposed Program. He described its release as "an early step in a multi-year process to develop a final National OCS Program for 2019-2024," and as consistent with an April 2017 Executive Order implementing an "America-First Offshore Energy Strategy."

The Draft Proposed Program includes 47 potential lease sales -- the largest number of lease sales ever proposed for the National OCS Program’s 5-year lease schedule.  The plan includes 19 sales off Alaska, 7 in the Pacific Region, 12 in the Gulf of Mexico, and 9 in the Atlantic Region. Some of these areas have not seen leases sold in decades; for example, there have been no sales in the Atlantic since 1983 and there are no existing leases.

By contrast, the draft program includes 8 Atlantic lease sales between 2020 and 2024, covering federal waters offshore Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Delaware, Virginia, North Carolina, South Carolina, Georgia, and Florida. The Pacific leases would similarly be the first sold in that region since 1984.

According to the press release announcing the draft's release, "Inclusion of an area in the DPP is not a final indication that it will be included in the approved Program or offered in a lease sale, because many decision points still remain. By proposing to open these areas for consideration, the Secretary ensures that he will receive public input and analysis on all of the available OCS to better inform future decisions on the National OCS Program."

Even if an area is offered in a lease sale, it may not draw commercial interest; even if leased, an area might not actually be used for exploration and production. But the draft plan significantly expands the acreage that would be available for leasing -- according to the Secretary, "the current program puts 94 percent of the OCS off limits," while the proposed program "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."

BOEM has solicited public comment on the draft plan, which will inform several further rounds of proposals and comment, before a Proposed Final Program (PFP) is considered. In the meantime, until a new program is finalized and adopted, the present 2017-2022 Five Year Program remains in effect.

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