The US Senate and Natural Resources Committee last week approved two bills that could have significant impact for the oil and gas industry. Sen. Lisa Murkowski’s Offshore Production and National Security (OPENS) Act would open access to additional US offshore oil and gas resources, provide revenue sharing for participating coastal states and lift the ban on US crude oil exports. The bill was approved 12-10.
The committee also approved the Energy Policy Modernization Act of 2015 by a vote of 18 to 4. A total of 10 Republicans and eight Democrats voted to advance the bill to the Senate for consideration. Committee Chairman Sen. Murkowski crafted the bill with ranking member Sen. Maria Cantwell. This bill modernizes energy policies on efficiency, infrastructure, supply, accountability, and reauthorizing conservation programs.
Following the bills’ advance out of the Senate committee, IADC President/CEO Stephen Colville issued this statement: “IADC wants to congratulate the Senate Energy and Natural Resources Committee for reporting out the Energy Policy Modernization Act and the OPENS Act. The last comprehensive energy bill was enacted in 2007, before the US underwent a total energy supply transformation. It is beyond time that the federal government removes existing barriers that hold back the US’s potential as an energy powerhouse.
“IADC is encouraged to see a repeal of the crude export ban and opening of more offshore acres in the Eastern Gulf of Mexico, South Atlantic and Alaska included in the OPENS Act. IADC is hopeful that the full US Senate will take up both measures quickly after the August recess. We look forward to a robust debate on the Senate floor with an open amendment process to include other measures that strengthen US energy policy and eliminate unnecessary regulations that impede energy development necessary to fuel the US and world economies.”
The OPENS Act is a combination of four bills previously considered by the Senate Energy and Natural Resources Committee and addresses the different interests of the Gulf Coast states, Atlantic states and Alaska, as well as crude oil exports.
The legislation would open additional areas of America’s offshore to responsible oil and gas exploration; allowing the nation’s crude oil to be exported; and ensuring coastal states share in the revenues from offshore production to offset the impacts of development.
Alaska’s OCS in the Beaufort and Chukchi seas are estimated to contain undiscovered resources of 23.6 billion bbl of oil and 104.4 trillion cu ft of natural gas. Additionally, Cook Inlet, which provides the natural gas supply for south-central and interior Alaska, contains an estimated undiscovered resource of 19 trillion cu ft of natural gas.
The legislation would provide for revenue sharing in the Alaska OCS region for the state and coastal communities. It would also increase access to additional resources by requiring a minimum of three lease sales in each of the Beaufort, Chukchi and Cook Inlet planning areas during any five-year period, as well as annual lease sales in the 8(g) zone of the Beaufort and Cook Inlet planning areas.
The Energy Policy Modernization Act will enhance cybersecurity safeguards, maintain the Strategic Petroleum Reserve and provide a streamlined process for natural gas export projects. This legislation also reauthorizes the energy-related components of the America COMPETES Act, aims to develop better interagency coordination of water and energy initiatives, and addresses several preservation funds.
For more information on the Energy Policy Modernization Act, and to view the full bill, click here.
Click here to view the full text of the OPENS bill.