Low oil prices “not a material factor” in Atlantic lease decision

Depressed oil prices were not a factor in the decision to pull back from offering Atlantic leases for oil and gas exploration, Interior Secretary Sally Jewell said Tuesday. Rather, Jewell and Abigail Ross Hopper, director of the Bureau of Ocean Energy Management, portrayed opposition from Atlantic coastal communities, other ocean commercial interests, and Navy concerns as factors for pulling the Atlantic out of five-year planning for leasing on the continental shelf.

“Current oil prices were not a material factor in this decision,” Jewell said in a conference call with reporters. Longer-term prospects in the industry are part of BOEM planning, which looks at scenarios with oil priced from $40 to $160 bbl., Jewell said. With the increases in onshore U.S. production in recent years, withdrawing the Atlantic lease area from consideration will reduce projected supply by only 0.1%, Hopper said.

“We heard from many communities that now is not the time to begin leasing off the Atlantic coast,” Jewell said. That included an intense lobbying campaign by environmental groups allied with seaside cities and towns and their resort operators from New Jersey to Georgia.

Those opponents raised the danger of spills hitting beaches near East Coast population centers and crippling tourism and fishing. The first years of the Obama administration brought big moves to open the mid- and southern Atlantic shelf to developing both wind and hydrocarbon energy resources, but the Deepwater Horizon disaster in 2010 led Obama to pull back on plans to include drilling leases.

Recent comments from the Department of Defense raised more issues than in the last round of planning for the Atlantic shelf, Hopper said. Navy and Marine air and surface units train and test off the mid-Atlantic coast and share air space training areas with the Air Force. “The entire proposed lease area is conflicted…The scope and scale of the mission in the Atlantic cannot be understated,” Hopper said.

There is now a 90-day public comment and hearing process before the 2017-2022 BOEM plan is finalized.

“A future administration could redo the five-year program and put it back in,” or Congress could attempt to force a lease sale, Jewell said. But restarting the planning and public process would be long and arduous, she added.

About the author

Ashley Herriman

Ashley Herriman is WorkBoat's online editor.

Leave A Reply

© Diversified Communications. All rights reserved.