Drilling Ahead: OCS plan offers opportunity, but great responsibility

By Mike Killalea, Editor & Publisher

If you despair of chronic US political gridlock, lift up your heart in praise. The proposed 2019-2024 Outer Continental Shelf Leasing Plan, which opens some 90% of total US federal waters to leasing, has coalesced coastal politicians red and blue into a determined bloc – against the plan, that is. Most prominently, following a quickly arranged meeting with the objecting Republican governor of Florida, Interior Secretary Ryan Zinke promptly announced that the Sunshine State was removed from the plan. That exclusion prompted a second wave of bipartisanship, a la, what about us?

The bold OCS proposal includes more than 98% of undiscovered, technically recoverable oil and gas resources in federal offshore areas, according to the Bureau of Ocean Energy Management (BOEM). The proposal includes a whopping 47 potential lease sales in 25 of the 26 planning areas. This is a gargantuan increase from the 2017-2022 lease plan issued in 2016, which foresaw just 11 potential lease sales in only four OCS planning areas (10 in the Gulf of Mexico, one in Alaska).

The new proposal calls for 19 sales off Alaska, seven in the Pacific, 12 in the Gulf of Mexico and nine in the Atlantic.

DOI says that this is the largest number of lease sales ever proposed for a US five-year schedule.

And it is not without support. According to the Department of Interior, 155 members of the US House of Representatives and the US Senate wrote Secretary Zinke in support of an expanded five-year plan.

Political Football

Oil has always been a political football in the USA. Geography, not partisan allegiance, is the dominant determinant in the politics of drilling. During the post-Macondo moratorium, for instance, Texas and Louisiana Democrats and Republicans alike stood firmly in the industry’s corner. IADC sought to exempt shallow-water drilling from the confines of the moratorium, arguing the clear-cut distinctions of bottom-supported vs deepwater offshore drilling – no subsea BOPs and little or no oil being drilled (mainly natural gas and condensate). The risk profile is clearly a different world, but, alas, our efforts were unsuccessful.

IADC and industry are disappointed about the narrowing of the leasing plan. “Secretary Zinke’s remark to remove Florida from consideration for any new oil and gas platforms is undisciplined and arbitrary and stands in stark opposition to the deliberative and inclusive process envisioned by the Outer Continental Shelf Lands Act, not to mention it represents an apparent about face by the Administration, particularly at this very early stage in the process,” observed IADC President Jason McFarland. “Regardless of one’s viewpoint on whether or not any particular offshore area should ultimately be offered in a lease sale, the Secretary’s latest action should be viewed as contrary to the process.”

With great opportunity…

While the outcome of the leasing brouhaha is uncertain, with court challenges and other potential roadblocks likely, the industry’s political outlook is positive, particularly given the support of the current Administration.

Tickling the public’s collective worries is the specter of another Macondo. We have built a proud legacy since 2010. There’s a great review of these improvements, and the hard work industry has exerted to responsibly develop our deepwater resources, at IADC’s DrillingMatters.org.

With apologies to “Spiderman,” with great opportunity comes great responsibility. DC

Email Mike Killalea at mike.killalea@iadc.org.

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