U.S. plans to open offshore drilling

COMMENT: With mere days left in the Bush Administration, Mineral Management Services introduced energy decisions largely focussed on opening up Atlantic and Pacific coastal areas to drilling. It is a draft plan, however, and may not endure long past the period of public comment, or the first months of the Obama Adminstration.

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U.S. tells plan to drill off California coast
Jane Kay, San Francisco Chronicle, 17-Jan-2009

Proposal could lead to more offshore drilling
Jim Tankersley, LA Times, 16-Jan-2009

Feds issue offshore drilling plan, including Alaska's Bristol Bay
H. Josef Hebert, Fairbanks Daily News-Miner, 16-Jan-2009

U.S. tells plan to drill off California coast

Proposed offshore oil lease sale plan

The U.S. Interior Department, acting in President Bush's final days in office, proposed on Friday opening up 130 million acres off of California's coast to drilling for oil and natural gas, including areas off Humboldt and Mendocino counties and from San Luis Obispo south to San Diego.

After a hands-off policy for a quarter-century, the administration submitted plans to sell oil and gas leases for most of the U.S. coast, from the Gulf of Maine to Chesapeake Bay and the Outer Banks of North Carolina to the Gulf of Mexico and the Pacific Coast.

New drilling also was proposed in Alaska's Bristol Bay, one of the nation's most plentiful sources of fish, and the Arctic Ocean.

Washington, Oregon and protected parts of Florida were excluded along with waters off San Francisco Bay that lie within national marine sanctuaries.

On Friday, the American Petroleum Institute, the U.S. Chamber of Commerce and other business groups greeted the news with praise, saying it is time for domestic energy supplies to be released from the moratorium.

But environmental groups and some Democratic leaders who oppose California drilling criticized the 11th-hour move, vowing to work with the Obama administration to promote energy independence based on clean, renewable technologies.

"President Bush's last-ditch effort to open our coasts to new drilling is nothing more than a parting gift to his buddies in the oil and gas industry," said Lois Capps, D-Santa Barbara, a member of the House Natural Resources Committee.

On the eve of the 40th anniversary of the platform blowout that spilled 3 million gallons of black crude oil on 35 miles of beaches around Santa Barbara, Capps said, "New offshore drilling would not lower gas prices, make us more energy independent or get our economy back on track."

Richard Charter, a longtime environmental lobbyist who now works for the Defenders of Wildlife Action Fund, called the government's move "an extremist act."

"What we see today is the political equivalent of a rock star trashing the hotel room right before checkout," he said.

The Interior Department used a lapse in the congressional moratorium in October and a cancellation of a presidential prohibition in July to set in motion the lease-sale program - which the incoming administration of President-elect Barack Obama could cancel or proceed with.

Obama has said he would consider some offshore oil drilling as part of a comprehensive energy plan. Sen. Ken Salazar, D-Colo., Obama's pick for interior secretary, hasn't given his views on offshore drilling in California. He said in his confirmation hearings Thursday that he will confer with the administration's team.

Gov. Arnold Schwarzenegger, along with the governors of Oregon and Washington, opposes new offshore oil drilling despite the new revenue it would offer the cash-strapped state.

The federal government has failed to make a case for a new program because energy resources are insignificant in the Atlantic, Pacific and eastern Gulf of Mexico, already-sold leases aren't being used, and no protections are in place to protect the environment, the governors said.

In Friday's announcement, Interior Department officials proposed three new lease sales, one in Northern California and two in Southern California in "areas with known hydrocarbon potential." The proposals, which were based on requests from seven oil companies that weren't named, would include:

-- As many as 44 million acres of federal waters, which start 3 miles from the shoreline, off Humboldt and Mendocino counties.

-- As many as 89 million acres off of San Luis Obispo, Santa Barbara, Ventura, Los Angeles, Riverside and San Diego counties. One lease would require equipment operating at a diagonal to drill within the Santa Barbara Ecological Preserve. In Southern California, there are 79 existing leases with 43 producing and 36 undeveloped.

There will be a 60-day comment period, with hearings in Ukiah, Fort Bragg, Santa Barbara, Ventura and San Diego. Dates for the hearings have not been announced.

If sales are allowed, they could occur as soon as 2014.

About 60 percent of California citizens who commented on new oil-and-gas development were opposed to new drilling, according to the Interior Department's oil-drilling agency, the Minerals Management Service.

E-mail Jane Kay at jkay@sfchronicle.com.

Proposal could lead to more offshore drilling

The Bush administration took a preliminary step this morning to open parts of the outer continental shelf for offshore oil and gas drilling, lobbing a political firecracker into the lap of the incoming Obama administration.

The draft proposal would start a two-year process that could result in drilling leases off California, Alaska, the Atlantic Coast and the Gulf of Mexico. It won’t be published in the Federal Register until after President-elect Barack Obama takes office, meaning he could stop it immediately or discard its recommendations later.

Congress and Bush allowed dueling bans on shelf drilling to expire last year, under pressure from high gas prices and a public appetite for drilling. Appearing before a Senate committee on Thursday, Obama’s Interior secretary nominee, Sen. Ken Salazar (D-Colo.), did not commit to whether he would support reinstating a ban. He said it might be appropriate to allow drilling in some areas but not others.

Bush Interior Department officials cast their last-minute move as a favor for Obama. Randall Luthi, the director of the Minerals Management Service, said in a press release that “We’re basically giving the next administration a two-year head start. This is a multi-step, multi-year process with a full environmental review and several opportunities for input from the states, other government agencies and interested parties, and the general public.”

The American Petroleum Institute applauded the move.

“American consumers have been demanding access to the oil and natural gas located off our coasts and the draft proposed five-year plan, with its inclusion of areas that had been off-limits for more than 20 years, is a good step in the right direction,” President and CEO Jack Gerard said in a press release. “Developing our domestic resources is crucial to getting our nation’s economy back on its feet and getting more Americans back to work in well-paying jobs.”

Environmentalists screamed foul.

"It seems like it’s one last, desperate act of the Bush administration to impose its agenda on the incoming administration,” said Josh Dorner, a spokesman for the Sierra Club. “We expect this to be one of the many issues that the incoming administration will fully review."

-- Jim Tankersley

Feds issue offshore drilling plan, including Alaska's Bristol Bay

WASHINGTON -- The Interior Department on Friday issued a detailed proposal for widespread oil and gas drilling off both the Pacific and Atlantic coasts in areas that have not had energy exploration for decades.

The proposal, issued in the Bush administration's final days, calls for oil and gas leases to be made available within two to six years "in areas of hydrocarbon potential" from New England to Florida and off the length of California.

Until recently these regions of the Outer Continental Shelf have been declared off limits to drilling by Congress and by presidential executive order. It also outlined lease plans off Alaska including the fish-rich waters of Bristol Bay.

It will be up to President-elect Barack Obama whether to proceed with Interior's revised five-year leasing plan that would cover the years 2010 to 2015. He could scale it back or scrap it entirely. Interior officials said they wanted to give the next administration maximum flexibility to expand offshore drilling.

Colorado Sen. Ken Salazar, Obama's choice as interior secretary, has indicated he likely will want to scale back the Bush administration's offshore drilling agenda.

"There are places in the Outer Continental Shelf that are appropriate for drilling. There may be other places that are off limits," Salazar said Thursday during his Senate confirmation hearing. "We need to have a thoughtful process as we go forward."

The draft plan was attacked by marine conservation groups and praised by industry.

Jacqueline Savitz of Oceana, a marine protection advocacy group, called the plan an "eleventh hour attempt to sell out our oceans" and urged the Obama administration to reject it.

The proposed leasing agenda is more aggressive than expected even from the Bush administration, said Bill Eichbaum, vice president of marine programs at the World Wildlife Fund. He noted that additional lease sales were scheduled for Alaska's Chukchi Sea and Bristol Bay instead of "rolling back existing leases until there are adequate and comprehensive science-based reviews."

The American Petroleum Institute, which represents major oil companies, and the U.S. Chamber of Commerce in statements urged Obama to embrace the plan that they said will make available needed new energy resources. Oil and gas companies "have proven they can develop resources in an environmentally safe way," said API president Jack Gerard.

Congressional Democrats have indicated that while they have no intention of returning to the broad drilling bans that covered 85 percent of the Outer Continental Shelf, some areas - especially off California and the Northeast - are likely to again be protected from energy development.

The proposed drilling agenda issued by Interior's Minerals Management Service on Friday assumes no such action.

It schedules three lease sales, in 2012-2015, off California in the Point Arena Basin off the state's northern coast and in the Santa Maria, Santa Barbara/Ventura and Oceanside/Capistrano basins in the south. Access to oil and gas in an ecological preserve off Santa Barbara would be allowed, but only through directional drilling.

Sen. Barbara Boxer criticized the measure.

"It is clear that President Bush intends to expand his disastrous environmental and economic policies right up to his last hours in office," the California Democrat said. "During the worst economic crisis since the Great Depression, this administration wants to threaten California's $12 billion coastal economy and the 250,000 jobs that depend on it."

The plan calls for five leases, the earliest in 2011, off the Atlantic coast, including one in an area stretching from Maine to New Jersey and another in an area from South Carolina to Florida. Three leases are planned for the mid-Atlantic region including one, previously announced, off Virginia. While the Virginia lease would require a 50-mile (80-kilometer) protective buffer from shore, the subsequent leases would not.

"The future of these initiatives and projects now rests with the next administration," said Randall Luthi, director of the Minerals Management Service. "By starting this new five-year program when we did, we give the new administration the option of actually starting two years earlier than they normally would."

"All options are up to them," he added.

Associated Press writer Andrew Miga contributed to this report.

MMS Announces Milestones in Energy Development

Includes Alternative Energy, Traditional Sources

WASHINGTON, D.C. - The Department of the Interior’s Minerals Management Service (MMS) announced today three significant milestones that will potentially lead to expanded domestic production of both traditional and alternative energy resources.

The milestones are: the notice of availability of the final environmental impact statement (FEIS) for the Cape Wind Energy project off Massachusetts; a notice of intent to prepare an environmental impact statement (EIS) for geological and geophysical studies, such as seismic surveys, off the Atlantic coast; and the notice of availability of the Draft Proposed 2010-2015 Outer Continental Shelf (OCS) Oil and Gas Leasing Program and notice of intent to prepare an EIS for that program.

“MMS has been working tirelessly to facilitate the responsible development of our domestic energy resources and expand our nation’s energy portfolio,” said MMS Director Randall Luthi. “Today, we are presenting options to the next Administration. The final decisions regarding the next steps are theirs.”

The final EIS for the Cape Wind Energy Project, a proposed 130-turbine wind farm, was filed with the Environmental Protection Agency last week, and will publish in the Federal Register on January 16.

Luthi highlighted $3.8 million in Fiscal Year 2008 funding for environmental research related to offshore alternative energy development.

“While we anxiously await the publication of the Final Rule governing the OCS Alternative Energy Program, we are moving forward with important environmental work to ensure we have the best available scientific data upon which to base our decisions,” Luthi said. “As with the development of traditional sources of energy such as oil and gas, we must use a balanced approach to developing alternative energy resources, weighing the nation’s demand for energy with our responsibility to protect and preserve the environment.”

MMS submitted the Final Rule for the OCS Alternative Energy Program to the Office of Management and Budget for review and approval in November.

Luthi also announced the notice of availability of the Draft Proposed 2010 – 2015 OCS Oil and Gas Leasing Program (DPP) and a notice of intent to prepare an EIS for the DPP. The two notices will be published in the Federal Register January 21 beginning a 60-day public comment period.

“We’re basically giving the next Administration a two-year head start,” Luthi said. “This is a multi-step, multi-year process with a full environmental review and several opportunities for input from the states, other government agencies and interested parties, and the general public.”

The agency estimates the OCS contains about 86 billion barrels of oil and 420 trillion cubic feet of natural gas in yet to be discovered fields.

These numbers are conservative because little exploration has been conducted in much of those areas during the past quarter of a century due to the Executive and Congressional restrictions.

In response to the lifting of the Executive ban and the expiration of the restrictions included in previous Congressional Appropriations language, industry has begun submitting requests to MMS to conduct geological and geophysical studies, such as seismic surveys, in the Atlantic planning areas. Before making a decision on such requests, the agency must first conduct the necessary environmental reviews in accordance with the National Environmental Policy Act (NEPA).

“In order to move forward with expanded exploration and development responsibly, we need current data. That is why we are also announcing today our intent to prepare a programmatic EIS to evaluate potential environmental effects of multiple geological and geophysical studies in the Atlantic OCS planning areas,” Luthi said.

The public may submit comments on the Draft Proposed Program during the next 60 days by using the online commenting system or by mail to:

Minerals Management Service
Attention: Leasing Division (LD)
381 Elden Street, MS-4010
Herndon, VA 20170-4817

The public may submit comments on the scope of the Programmatic EIS, significant issues that should be addressed, alternatives that should be considered, scenario development, and the types of G&G activities and geographical areas of interest on the Atlantic OCS. Comments may be submitted electronically or in written form enclosed in an envelope labeled “Comments on the PEIS Scope” and mailed (or hand carried) to:

Regional Supervisor
Leasing and Environment (MS 5410)
Minerals Management Service
Gulf of Mexico OCS Region
1201 Elmwood Park Boulevard
New Orleans, Louisiana 70123-2394

For More Information:

Alternative Energy Environmental Studies Fact Sheet
Atlantic Seismic Activities Fact Sheet
Cape Wind Energy Project Fact Sheet
Draft Proposed Program Fact Sheet (27.83 KB PDF File)

Contact:
Nicholas Pardi (202) 208-3985

MMS: Securing Ocean Energy & Economic Value for America
U.S. Department of the Interior

2010-2015 Draft Proposed Program

(link to Draft Proposed Program (3.6 MB))

• The Outer Continental Shelf Oil and Gas Leasing Program, routinely referred to as the Five-Year Program, specifies the size, timing and location of the areas to be considered for Federaloffshore leasing during a five year period. The program is then reviewed by Congress and approved by the Secretary of the Interior.

• The current five-year program is the 7th program prepared since Congress passed the OCS Lands Act Amendments in 1978. It proposes 21 lease sales in 8 of the 26 OCS planning areas in the Gulf of Mexico, Alaska, and the Atlantic during the 5 year period of July 1, 2007 to June 30, 2012.

• The Minerals Management Service issued a Request for Information for a new 5-Year Outer Continental Shelf Oil and Gas Leasing Program on August 1, 2008 after the President lifted the Executive Withdrawal on offshore lands on July 14th and called for Congress to lift the annual moratorium and enact legislation to allow states to have a say on what happens off their shore and provide for the sharing of revenues with those states that want to proceed with development.

• More than 150,000 comments were received in response to the Request for Information. The Draft Proposed Program has been prepared using input from those comments.

• On October 1, 2008, the Congressional moratorium was allowed to expire. This allowed all OCS areas to be considered for leasing but according to the OCS Lands Act Amendments of 1978, an area must be included in the 5-Year OCS Leasing Program to be offered for leasing. (The only areas remaining under congressional restrictions are the majority of the Eastern Gulf of Mexico and a small portion of the Central Gulf within 100 miles of Florida. These areas are under restriction until 2022 pursuant to the Gulf of Mexico Energy Security Act of 2006.)

• For the draft proposed program, the Secretary proposes 31 OCS lease sales in all or some portion of 12 of the 26 planning areas—4 areas off Alaska, 2 areas off the Pacific coast, 3 areas in the Gulf of Mexico, and 3 areas off the Atlantic coast.

• The OCS currently produces about 27% of domestic oil and 14% of natural gas and is estimated to contain significant quantities of yet-to-be-discovered energy resources

• MMS is managing offshore resources in a manner that is responsive to the public’s concerns and respects the diverse needs of the communities where exploration and/or development may occur.

• MMS strives to protect human, marine and coastal environments. Environmental protection and safety are vital considerations in developing and executing the five-year program. Therefore, development of resources is balanced against potential environmental impacts. Safety is a priority for both MMS and for the operations that occur under MMS regulation. Last year
MMS conducted more than 25,000 inspections.

• Initiating the process for a new 5-Year Program provides the next Administration with the maximum decision-making flexibility.

• As we did with the Request for Information in August 2008, contact is being made with all 50 Governors making them aware of the 60-day comment period available to them.

• We are creating the maximum opportunity for the people of the United States to plan for strategic energy development on the OCS with the inclusion of areas that have previously been unavailable for consideration due to Executive Withdrawal and Congressional moratorium.

• With this second step in a two-year process to develop a new leasing program, MMS is seeking comments on all aspects of the new program including energy development, and economic and environmental issues in the OCS areas.

• Comments are being specifically requested on the subjects of size, timing, and location of sales and on the issues of buffer zones, revenue-sharing, and the use of unitization to limit the number of structures.

• The public comment period will remain open for 60 days from the date of publication in the Federal Register.

• The DPP will be published in the Federal Register on January 21, 2009. The public may submit comments during the next 60 days by using the online commenting system, http://www.regulations.gov or by mail to:

Minerals Management Service
Attention: Leasing Division (LD)
381 Elden Street, MS-4010
Herndon, VA 20170-4817