The US should define the Gulf of Mexico Shallow Water Province as a distinct entity to avoid stranding more than $20 billion of its oil and gas resource, said a new research.
According to a research from the Bureau of Safety and Environmental Enforcement (BSEE) and Bureau of Ocean Energy Management (BOEM) the GOM Shallow Water Province, comprised of water less than 200 meters deep, is a historically energy-rich area which now produces natural gas, accounting for 33% of the gulf’s gas production and just over 10% of its oil production.
Production and infrastructure investment used to be substantially higher in the Shallow Water Province, but over the last 20 years, development has moved onshore or to deepwater operations, the two US Department of the Interior agencies jointly said.
The number of wells drilled has decreased 89 percent over the last 10 years, and approximately 100 platforms a year are being removed with no new platforms being installed. If this trend continues, the lack of development will potentially strand 179 million barrels of oil and 4,567 billion cubic feet of natural gas that have an estimated worth of $20 billion.
The joint research report supports President Trump’s Executive Orders 13795, 13868 and 13783 of promoting offshore energy infrastructure, independence and economic growth, evaluates the contributing factors for this decline and recommends using an updated discount rate for the two distinct provinces.
“This research provides critical information that energy development in the Gulf of Mexico should not be managed with a ‘one size fits all’ approach in how we avoid stranding our nation’s valuable energy resources,” said BSEE Director Scott Angelle. “Although reversing the natural decline may not be entirely possible, promoting the recovery of the remaining oil and natural gas resources in the Gulf of Mexico Shallow Water Province, while protecting the interests of the American public, is an obligation this administration is taking action on.”
“Once the infrastructure is removed, we will not be able to recover these resources,” Angelle continued. “The nation is essentially on a ‘shot clock’ to make sure that does not happen.”
“BOEM estimates that $20 billion in oil and natural gas resources could be stranded in the Gulf of Mexico Shallow Water Province if the current trends continue,” said BOEM Acting Director Walter Cruickshank. “To ensure maximum resource recovery, BSEE and BOEM are working together to encourage increased activity consistent with the resource conservation policy established by Congress under Outer Continental Shelf Lands Act.”