Earlier this week, Dr. Walter Cruickshank, appearing director of the federal Bureau of Ocean Energy Management, delivered an replace on the state of offshore exercise and regulation. Speaking to a luncheon crowd on the Offshore Technology Conference (OTC) in Houston, Cruickshank stated that his company is working diligently to implement the offshore oil and gasoline imaginative and prescient of President Trump and Interior Secretary Ryan Zinke.
“We are making progress in implementing the elements of President Trump’s government order of final yr,” stated Cruickshank, referring to the America First Offshore Energy Executive Order of April 2017. That directive has aimed to broaden offshore oil and gasoline exploration and manufacturing on the Outer Continental Shelf (OCS) via a overview of the five-year leasing program, and reconsideration of sure rules pertaining to offshore power potential. The order additionally directed Zinke to implement a streamlined allowing method for privately funded seismic knowledge assortment, to find out offshore power useful resource potential.
“One factor that’s necessary to us is that exploration proceed (on the OCS),” stated Cruickshank. “Five exploration tasks sanctioned this yr have been for high-definition seismic.” He famous that the Draft Proposed National OCS Program for 2019-2024 “is a prime precedence” for his company. Considered a landmark reversal of offshore leasing coverage beneath the Obama administration, this system proposed by Zinke would make over 90% of the overall OCS acreage and greater than 98% of undiscovered, technically recoverable oil and gasoline sources in federal offshore areas accessible to think about for future exploration and improvement. By comparability, the outdated program put 94% of the OCS off-limits. In addition, this system proposes the most important variety of lease gross sales in U.S. historical past.
Yet, the brand new National OCS Program is prone to be in for tough sledding earlier than its last approval and implementation happen. Various environmental teams are anticipated to file lawsuits in opposition to a number of elements of the plan, in an effort to sluggish or halt the draft program’s targets. And congressional help for the plan is inconsistent, at finest. Thus, within the meantime, the far-less-ambitious 2017-2022 Five Year Program will proceed to be applied till the brand new program is accredited.
One factor that the Trump administration has wished to do is to reverse the 10-year decline in offshore leasing revenues coming in to the federal authorities. Back in 2008, OCS leasing revenues had been almost $18 billion. By distinction, in 2016, these revenues had plunged to only $2.eight billion. Not coincidentally, that huge decline, and the interval throughout which it occurred, simply occurs to have taken place throughout the whole eight years of the Obama administration.
And whereas Trump officers have tried, beneath the present five-year plan, to reverse the slide, their efforts to date have had modest outcomes. During March 2018, Gulf of Mexico Lease Sale 250 generated $124.7 million in excessive bids for 148 tracts masking 815,403 acres in federal waters of the Gulf. While these figures are higher than the region-wide GOM lease sale final August that generated $121.1 million in excessive bids for 90 tracts masking 508,096 acres, the outcomes are thought of disappointing by most business observers.
“While these outcomes are lower than we’d hope for, they’re nonetheless comparatively profitable,” insisted Cruickshank. He famous that a number of components performed into the outcomes, together with oil costs which are nonetheless a bit lower than fascinating for exercise within the GOM, the concentrate on cheaper shale exercise onshore by so many operators, and the truth that BOEM is handicapped in providing essentially the most enticing lease choices that it’d craft, till the brand new 2019-2024 program beneficial properties approval.
Meanwhile, present OCS exercise, Cruickshank stated that offshore tasks proceed so as to add appreciable worth to U.S. power belongings. “The OCS helps $55 billion in spending and 350,000 jobs,” stated the appearing director….