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OTC: Zinke signals "America First" strategy

Written by  OE Staff Tuesday, 02 May 2017 03:41

US Interior Secretary Ryan Zinke signed two secretarial orders aimed at "unleashing" America’s offshore energy potential and growing the US economy on the floor of the Offshore Technology Conference (OTC) yesterday (1 May). 

The first order implements President Trump’s Executive Order, signed Friday, and directs the Bureau of Ocean Energy Management (BOEM) to develop a new five-year plan for oil and gas exploration in offshore waters and reconsider a number of regulations governing those activities.

The second order establishes a new position – Counselor to the Secretary for Energy Policy – to coordinate the Interior Department’s energy portfolio that spans nine of the Department’s ten bureaus. 

“Following through on the leadership established by President Trump, today's orders will help cement our nation’s position as a global energy leader and foster energy independence and security for the benefit of the American people, while ensuring that this development is safe and environmentally responsible,” Secretary Zinke told industry representatives at OTC.

“We will conduct a thorough review of the Outer Continental Shelf (OCS) for oil and gas exploration and listen to state and local stakeholders. We also will conduct a thorough review of regulations that were created with good intentions but have had harmful impacts on America's energy security."  

Secretarial Order 3350 directs BOEM to immediately develop a new “Five Year Outer Continental Shelf Leasing Program” with full consideration given to leasing the OCS offshore Alaska, mid- and south-Atlantic, and the Gulf of Mexico.

It also directs BOEM to work with the Department of Commerce’s National Marine Fisheries Service to expedite authorization requests for seismic surveys, particularly for new or resubmitted permitting applications in the Atlantic to understand the extent of America’s energy potential. The Secretary’s order also directs prompt completion of the Notice to Lessees No. 2016-N01 dated 12 September 2016 and ceases all activities to promulgate the proposed “Offshore Air Quality Control, Reporting, and Compliance Rule. The order also directs BOEM and BSEE to review a host of other rules and report progress within 21 days.

“We're going to look at everything and make sure the policies are appropriate for each local community, rather than force a Washington-driven one-size-fits-all plan," said Zinke “There’s no predetermined map of development, but if there are areas that are acceptable, that have resources, and states and local communities support offshore development, we could include those area in the next 5-Year Program.”

During a talk at OTC, Zinke highlighted that OCS production currently accounts for about 18% of domestic crude oil and four percent of domestic natural gas supply. In Fiscal Year 2016, federal leasing revenues for the OCS were about US$2.8 billion. By contrast, in 2008 federal leasing revenues for the OCS were nearly $18 billion dollars. “That’s a drop of more than $15 billion that would otherwise go to the Treasury or toward funding important conservation programs like the Land and Water Conservation Fund and the Historic Preservation Fund,” Zinke noted.

Of the 1.7 billion acres on the OCS, only 16.9 million acres are leased for oil and gas development with 4.4 million of those acres (885 blocks) producing oil and gas. About 97% of all OCS leases are currently in the Gulf of Mexico.  BOEM estimates the US OCS has about 90 billion barrels of undiscovered technically recoverable oil and 327 Tcf of undiscovered, technically recoverable natural gas.

The Gulf of Mexico, covering 160 million acres of the OCS, has an estimated 48.46 billion bbl of technically recoverable oil and 141.76 Tcf of technically recoverable natural gas.

Photo from the US Department of the Interior.

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