ON THE REBOUND

NUMBERS CRUNCH

February 9, 2018

Lainey Breaux

February 9, 2018

President Donald Trump’s plan for expanding energy exploration has received expected favorable reaction from oil and gas industry voices, and condemnation from environmental organizations.

The next step – now that intentions have been formally made public — is for residents of the Louisiana coast and other communities that will be affected by policy proposals to research and comment on them.

Oil and gas interests generally agree that what is good for them is good for the overall energy economy. So while no specific programs or business plans mentioned publicly specify the Bayou Region as a largesse recipient, there is a shared presumption that this will be the case.

“The regulation rollback will undeniably encourage more energy production – an industry that our state is heavily dependent upon. With increased access in the Gulf we will likely see a ramping up projects and the areas hardest hit by the downturn, like Terrebonne and Lafourche, will feel that effect, if not directly, certainly indirectly,” said Stephen Waguespack, president and CEO of the Louisiana Association of Business and Industry in response to questions from The Times about local effects. “The Administration is currently in the comments period so you can expect to see a letter of support from us for their most recent deregulatory measures. It’s time to get industry back to work.”

The draft proposal offered by the White House includes not only lease potentials for oil and gas but conservation-related proposals that could also mean business for local firms.

An informational meeting for Louisiana will be held in Baton Rouge, 7 p.m. Jan 22 at the Crown Plaza Executive Center. An RSVP for that meeting, as well as locations of meetings in other states, is at the Bureau of Energy Management’s website, www.boem.gov.

The president has addressed the plan in some media statements. But the initial unveiling was done by U.S. Interior Secretary Ryan Zinke on Jan. 4. The plan, which will open up waters off Florida, Alaska and other states where drilling has been barred, will make over 90 percent of Outer Continental Shelf available for leasing through 2024, which includes 98 percent of undiscovered, technically recoverable oil and gas resources in federal offshore areas available to consider for future exploration and development.

“By comparison, the current program puts 94 percent of the OCS off limits. In addition, the

program proposes the largest number of lease sales in U.S. history, a BOEM statement reads

“Responsibly developing our energy resources on the Outer Continental Shelf in a safe and well-regulated way is important to our economy and energy security, and it provides billions of dollars to fund the conservation of our coastlines, public lands and parks.” said Secretary Zinke. “Today’s announcement lays out the options that are on the table and starts a lengthy and robust public comment period.”

Last year 155 members of both the U.S. House of Representatives and the U.S. Senate sent letters to Zinke in support of a new 5-year plan that recognizes America’s potential for energy dominance.

The draft proposed program includes 47 potential lease sales in 25 of the 26 planning areas -19 sales off the coast of Alaska, 7 in the Pacific Region, 12 in the Gulf of Mexico, and 9 in the Atlantic Region. This is the largest number of lease sales ever proposed for the National OCS Program’s 5-year lease schedule, BOEM said.

“By proposing to open up nearly the entire OCS for potential oil and gas exploration, the United States can advance the goal of moving from aspiring for energy independence to attaining energy dominance,” said Vincent DeVito, Counselor for Energy Policy at Interior. “This decision could bring unprecedented access to America’s extensive offshore oil and gas resources and allows us to better compete with other oil-rich nations.”

The new draft proposal was informed by approximately 816,000 comments from a wide variety of stakeholders, including state governments, federal agencies, public interest groups, industry, and the public.

“This plan is an early signal to the global marketplace that the United States intends to remain a global leader in responsible offshore energy development and produce affordable American energy for many decades to come,” said Katharine MacGregor, Principal Deputy Assistant Secretary for Land and Minerals Management.

Inclusion of an area in the draft is not a final indication that it will he included in the approved Program or offered in a lease sale, because many decision points still remain. By proposing to open these areas for consideration, the Secretary ensures that he will receive public input and analysis on all of the available OCS to better inform future decisions on the National OCS Program. Prior to any individual lease sale in the future, BOKM will continue to incorporate new scientific information and stakeholder feedback in its reviews to further refine the geographic scope of the lease areas.

“American energy production can be competitive while remaining safe and environmentally sound,” said Acting BOEM Director Walter Cruick-shank. “Public input is a crucial part of this process, and we hope to hear from industry groups, elected officials, other government agencies, concerned citizens and others as we move forward with developing the 2019-2024 National OCS Program.”

The Outer Continental Shelf Lands Act requires the Secretary of the Interior, through BOEM, to prepare and maintain a schedule of proposed oil and gas lease sales in federal waters, indicating the size, timing, and location of leasing activity that would best meet national energy needs for the five year period following Pro gram approval. In developing the National OCS Program, the Secretary is required to achieve an appropriate balance among the potential for environmental impacts, for discovery of oil and gas, and for adverse effects on the coastal zone.

BOEM currently manages about 2.900 active OCS leases, covering almost 15.3 million acres – the vast majority in the Gulf of Mexico. In fiscal year 2016, oil and gas leases on the OCS accounted for approximately 18 percent of domestic oil production and 4 percent of domestic natural gas production. This production generates billions of dollars in revenue for state and local governments and the U.S. taxpayer, while supporting hundreds of thousands of jobs.

In the Gulf, the draft plan includes twelve sales. The draft proposal continues the current approach to lease sales in the Gulf of Mexico by proposing 10 biannual lease sales in those areas of the Western, Central, and Eastern Gulf of Mexico that are not subject to Congressional moratorium or otherwise unavailable, and two sales in the portions of the Eastern and Central Gulf of Mexico after the expiration of the Congressional moratorium in 2022. This is the first time the majority of the Eastern GOM Planning Area would be available for leasing since 1988.

For Alaska, the draft proposes 19 lease sales three in the Chukchi Sea, three in the Beaufort Sea, two in the Cook Inlet, and one sale each in 11 other program areas in the state. These 11 program areas consist of the Gulf of Alaska, Kodiak, Shumagin, Aleutian Arc, St. George Basin, Bowers Basin, Aleutian Basin, Navarin Basin, St. Matthew-Hall, Norton Basin, and Hope Basin. No sales are proposed in the North Aleutian Basin Planning Area that has been under Presidential withdrawal since December 2014.

Local firms have had involvement with staffing for big oil companies for prior Alaska projects that were scrapped under the Obama administration.

In the Pacific the draft proposes two sakes each for northern, central and southern California, as well as one each for Washington and Oregon There have been no Pacific sales since 1984. In southern California there are 43 producing leases currently.