Obama proposes major leasing expansion in Atlantic, Arctic

By Phil Taylor | 01/27/2015 01:17 PM EST

The Obama administration today proposed opening new federal waters from Virginia to Georgia for oil and gas leasing, the first step in a potentially major expansion of drilling.

The Interior Department’s draft proposed leasing program for 2017 to 2022 also includes up to three lease sales in Alaska’s Cook Inlet and Beaufort and Chukchi seas, with expanded protections for an area known as Hanna Shoal that is important to walruses and seals.

The plan also calls for two lease sales per year that would include all waters in the western, central and eastern Gulf of Mexico that are not under congressional moratorium — though it does not propose leasing in eastern Gulf waters that Congress has placed off limits through 2022.

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No lease sales would occur in the Pacific, where drilling is opposed by key West Coast elected officials.

Interior Secretary Sally Jewell this afternoon said the plan makes 80 percent of the undiscovered technically recoverable oil and gas resources available for development, while protecting areas that are "too special to drill."

"We are committed to gathering the necessary science and information to develop resources the right way and in the right places," Jewell said in a statement. "We look forward to continuing to hear from the public as we work to finalize the proposal."

The Bureau of Ocean Energy Management proposal reflects "a continuation of the regionally tailored leasing strategies" in the current 2012-17 plan, Interior said.

President Obama today also issued a memorandum withdrawing nearly 10 million acres of wildlife-rich areas of the Beaufort and Chukchi seas that are currently off-limits to leasing, as well as Hanna Shoal. The withdrawals will protect Native Alaskans who depend on the ocean’s bounty for their livelihoods, he said.

The leasing proposal — if finalized — would be one of Obama’s boldest moves to expand drilling opportunities on the federal estate at a time when Republicans are attacking him for shutting down oil and gas.

It comes days after Obama proposed designating more wilderness in the oil-rich Arctic National Wildlife Refuge and as the Bureau of Land Management leases far fewer lands for drilling than the George W. Bush administration. Republicans have hammered Obama for the slow growth of oil production on federal acres compared to private lands, and for the precipitous decline in natural gas production as industry sets production records elsewhere.

The move also comes as the administration seeks new restrictions on methane emissions from oil and gas developers and a final BLM rule on hydraulic fracturing — both of which are vigorously opposed by industry.

Jewell today emphasized that the leasing plan is far from final. Waters could be removed from the BOEM plan as it crafts an environmental impact statement and takes what are likely to be many thousands of public comments.

Waters left out of the draft proposed program — such as the eastern Gulf — may not be added in later in the process.

Opening the Atlantic is likely to spark intense debate.

Then-Interior Secretary Ken Salazar in March 2010 announced plans to hold a lease sale off the Virginia coast but then scrapped the plan following the Deepwater Horizon spill in the Gulf of Mexico a month later.

BOEM’s potential lease sale in the Atlantic would not occur until the back end of the five-year program and will depend on the availability of infrastructure to respond to a potential spill, Jewell said. BOEM has already established a 50-mile coastal buffer to minimize conflicts with the Department of Defense and NASA activities, offshore wind development, recreational fishing, and critical wildlife habitats, as well as visual impacts.

Interior held several lease sales in the Atlantic from 1976 through 1983, selling drilling rights on more than 2 million acres of waters. A total of 51 wells were drilled from New England to as far south as Georgia.

But the Atlantic and Pacific were placed off-limits to development by congressional and presidential moratoriums beginning in the 1980s. It wasn’t until 2008 that Congress and President George W. Bush lifted the leasing bans.

Jewell said the agency needs more information on the oil and gas resource potential in the Atlantic — data should become available as companies begin updating estimates that date back three decades. Interior last June finalized a plan to allow seismic oil and gas surveys from Delaware south to the Florida border.

The American Petroleum Institute this morning said it was reserving comment until seeing details of BOEM’s five-year plan.

But Erik Milito, API’s director of upstream and industry operations, said it would be "premature and irresponsible" to leave out any areas that hold the potential for significant oil and gas discoveries. If conflicts exist, waters may be removed from the plan before it is finalized, but they cannot be added back in.

"How much energy we produce offshore 15 and 20 years from now depends on the decisions being made today," Milito said in a conference call with reporters.

API said recent polls showed a majority of voters in Florida, Georgia, South Carolina, North Carolina and Virginia support offshore drilling. Governors in the Carolinas and Virginia are on record supporting offshore drilling.

But opening the Atlantic is likely to trigger major opposition from environmentalists and some powerful Democrats.

Democratic Sens. Cory Booker and Robert Menendez of New Jersey, Ben Cardin of Maryland and Ed Markey of Massachusetts this afternoon will hold a news conference to oppose Obama’s plan.

Those senators joined five other Democrats in signing an August 2014 letter to Jewell saying offshore drilling anywhere in the Atlantic would threaten fishing, tourism and recreation that provide billions of dollars in revenue to coastal states.

Eleanor Huffines, senior officer for the U.S. Arctic at the Pew Charitable Trusts, praised Interior’s moves to protect certain waters off Alaska’s North Slope.

"Safeguarding bowhead whale migration routes and walrus foraging areas is essential for the health of the Arctic marine ecosystem and for subsistence," she said. "These areas are long-recognized as sensitive habitats, and we appreciate the leadership shown by the administration in taking action to protect them."

The plan calls for three potential sales in Cook Inlet and the Beaufort and Chukchi seas, but they are proposed for later in the program so Interior can account for the region’s harsh climate, sensitive sea life and the needs of Native Alaskans, Jewell said.

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