Obama OCS Announcement Is Untrustworthy - FERC Approves Open Season Plan

FERC Approves TransCanada's Open Season Plan (See Edmonton Journal)

Text of President Obama's OCS Speech

Commentary: We have provided an editorial on this subject to a national publication and will either display it here if it is not printed or reprint it after publication.  The bottom line is that the President's announcement yesterday has the effect of re-establishing moratoria areas that burden the economy, society and even the environment (as the recent moratoria study demonstrated).  Some areas he purports to include in leasing plans, will really just be put through a drawn out 'study and comment' process before falling to the cutting room floor.  Areas that are actually leased will still have to run the gauntlet of a biased and hostile federal regulatory process subject to 'death by a thousand cuts' and manipulation by what we have coined the, 'environmental-government complex'.  After the President's statement, Interior Secretary Ken Salazar (NGP Photo) convened a press conference with Presidential energy advisor, Carol Browner.  In his opening preamble, Salazar said, "The President knows we cannot drill our way to energy independence."  This statement reveals an attitude that prevents oil and gas exploration from fulfilling the important role in economic recovery that it could, with honest attention and focus.  A bright spot in today's announcement is the apparent green light given to Shell Oil's Chukchi Sea exploration plan, assuming an EPA Clean Air Act permit is granted in time for 2010 season summer work and assuming that lawsuits or other man made obstructions to not further delay this too-much delayed project.   -dh

Houston Chronicle by Jennifer Dlouhy.  President Barack Obama's plan to expand oil and natural gas drilling in untouched Atlantic waters while walling off parts of the Pacific and Alaskan coasts represents a bid to bridge the divide separating environmentalists and drilling advocates on the issue.  But the middle-ground approach announced on Wednesday alienated environmental advocates who say new offshore production threatens marine life; drew quick criticism from Republican drilling advocates in Congress who said it doesn't go far enough; and received only muted enthusiasm from energy industry leaders who are wary about the administration's commitment to oil and gas development.

Oil and Gas Journal by Nick Snow.  Salazar also ordered cancellation of Chukchi Sea leases issued under the 2007-12 OCS schedule, an apparent response after a federal court in April 2009 that environmental assessments for the Alaska portion of the program were inadequate, and suspended further leasing in the Chukchi and Beaufort seas under the current plan. “We’re looking forward to scoping under the new plan so we can find out what’s there and how to develop it responsibly,” he said. The plan also removes Bristol Bay from future leasing consideration.

Bloomberg News By Jim Efstathiou Jr. and Kim Chipman.  President Obama's pledge to expand offshore oil and natural-gas drilling may help Democrats deliver legislation that regulates carbon dioxide emissions before any fuel is produced.

ADN by Elizabeth Bluemink.  Shell's plan to drill for oil and gas in the Beaufort and Chukchi seas this summer remains in legal limbo despite the Obama administration's endorsement of the drilling.

Alaska Dispatch by Rena Delbridge.  Royal Dutch Shell, which has spent several billion dollars trying to advance its offshore oil program off Alaska's northern coast, heralded a decision by President Obama to allow exploration and drilling to continue.  The decision takes Bristol Bay leases off the table and may not lead to additional Arctic leases. But the decision does allow development of existing leases, including Shell's in the Beaufort and Chukchi seas.  Federal waters off Alaska's northern shores hold an estimated 25 billion barrels of oil and 120 trillion cubic feet of natural gas. Offshore oil development in federal waters is important to Alaska and generally seen as a solution to declining oil production from aging North Slope fields, like Prudhoe Bay. Without new oil production, the 800-mile trans-Alaska pipeline could reach a point in the next decade where flow is too low to continue operations, cutting off North Slope development and, in turn, the source of some 90 percent of state revenue.  Shell Alaska has spent several billion dollars on leases, icebreakers and more, all aimed toward firming up oil and gas estimates and leading to production. Vice president Pete Slaiby (NGP Photo) has said the company has spent $40 million alone to keep a 2010 exploration season in play, pending permitting and resolution of several legal challenges.  A statement issued Wednesday by Shell Alaska spokesman Curtis Smith indicates the company still plans to drill in 2010, pending air-quality permits from the Environmental Protection Agency.

ADN by Elizabeth Bluemink.  Gov. Sean Parnell and U.S. Rep. Don Young criticized Obama's decision. Parnell said it creates uncertainty about the future of oil and gas leasing in Alaska's outer continental shelf. Young called it a "ploy" to restrict development, noting that it prevents leasing in areas that had previously been approved by the Bush administration.  But Alaska's two senators, Republican Lisa Murkowski and Democrat Mark Begich, issued a press release together welcoming the decision to proceed with drilling.  

Atlanta Journal-Constitution (3/31) reports, “At the Southeast Energy Alliance, which collected about 40,000 letters from citizens in Georgia, Virginia and the Carolinas in support of offshore drilling, executive director Michael Whatley said the Obama administration's move was long overdue. “At a time when oil is above $80 a barrel and our national economy is hanging by a thread, it is imperative that we have a balanced and robust approach to meeting our energy needs -- and our national energy policy should reflect that,” Whatley said in a statement. If offshore drilling takes place anywhere in the South, it will likely be in the Gulf of Mexico and off the coast of Virginia first. Houston Chronicle (3/31) reports, “Barry Russell, president of the Independent Petroleum Association of America, welcomed the plan as a “first step to addressing the nation's future energy needs,” but cautioned that the seven-year drilling blueprint only kicks off “an extremely long and thorough process” governing offshore leasing.

Denver Post by Michael Riley.  As a senator, Salazar initially opposed the Bush offshore- drilling proposal as "a phantom solution" to the country's energy problems, but later he joined a bipartisan group of senators pushing to open up the country's coastlines. Some industry representatives said the administration's compromise may end up being judged harshly by advocates of more domestic drilling. While the south and mid-Atlantic regions contain as much as 1.1 billion barrels of recoverable oil, according to estimates by the Minerals Management Service, those reserves are far smaller than the north Alaska coast, which will be developed under the current plan only after significantly more study and analysis. "They wiped five sales off the books that were planned for the next two years in Alaska," said Daniel Kish, vice president of the Institute for Energy Research. "They opened the least prospective areas and closed the most prospective areas."

Denver Post by Mark Jaffe.  Interior Secretary Ken Salazar on Wednesday tossed out a last-minute oil-shale lease offering, saying it "didn't meet the smell test," and he signaled a top-to-bottom review of the oil-shale program.  Salazar said he was "troubled" by the Bush administration's "head-long rush" in November to issue commercial oil-shale regulations.

The following comes from the House Natural Resources Committee Republican Press Office:

 Facts on Obama Administration’s Plan to Lock Up the OCS

·         President Obama did not open new lands to offshore drilling – all of these areas were already open for drilling once Congress and President Bush lifted the moratorium in 2008.  Instead, President Obama yesterday announced what areas he would CLOSE to offshore drilling (Click for maps).

·         Under the President’s Outer Continental Shelf (OCS) plan, over 360 million acres are now under a new “Obama Moratorium” that blocks American energy production.  This represents nearly 60% of the OCS in the Lower 48 States.

·         In total, the new Obama OCS plan puts 13.14 billion barrels of oil and 41.49 trillion cubic feet of natural gas under lock and key.

·         The plan includes only two actual lease sales – Virginia and Cook Inlet –both are delayed from 2011 to 2012.

·         The Administration will only study the other areas (Mid-Atlantic, Southern Atlantic, Chukchi and Beaufort Sea).  It has NOT actually planned lease sales for these areas.  There is no guarantee that drilling will ever occur there. 

·         Drilling in a small portion of the Eastern Gulf of Mexico can only happen if Congress lifts the ban that is in place until 2022.  The Administration has not sent proposed language to make this change to Congress yet.

·         The entire Pacific Coast is now off limits. The Pacific Coast alone holds an estimated 10.5 billion barrels of oil—almost 75 percent of the total amount available off the U.S. coastline in former moratoria areas - and 18 trillion cubic feet of natural gas. 

·         The Eastern Gulf of Mexico mileage restrictions specifically exclude the “Destin Dome” area.  This area contains enough natural gas to supply gas to a million American families for 30 years.  It is located close to infrastructure and could be quickly developed, creating jobs and wealth for the American people.

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House Natural Resources Committee Republican Press Office

Contact: Jill Strait or Spencer Pederson

202-226-2311