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Page added on December 24, 2013

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US Should Tap the Offshore Goldmine

Public Policy

Back in 2011, at a fundraiser in San Francisco, President Obama remarked that “We have lost our ambition, our imagination, and our willingness to do the things that built the Golden Gate Bridge.” Since his comments there has no doubt been a dramatic increase in domestic production of oil, natural gas and renewable energy.

Through the combined power of state-level regulatory regimes, technologies like deepwater drilling and hydraulic fracturing, and private-land ownership the United States has become one of the world’s leading oil and natural gas producers.

But we should recognize that the majority of this progress has taken place despite action or inaction from the federal government, not because of it. Many worthy, large-scale energy projects on par with the achievement of the construction of the Golden Gate Bridge remain unbuilt. Many areas offshore remain unexplored due to a complex web of rules and regulations that stifle progress and keep reserves of oil and gas locked beneath the waves.

Most recently the potential for dramatic increases in offshore energy production in two frontier regions has hit a stumbling block. The “worrying class” in Washington, joined by anti-development activists for whom no hydrocarbon project is ever worth supporting have lobbied the Department of the Interior and the President to put an end to all drilling activity in Arctic waters. And regulators consistently block exploration and development off the Atlantic coast.

Earlier this month nearly 60 U.S. House members called on Interior Secretary Sally Jewell to halt all drilling activity in the Chukchi Sea. Last week 6 Democratic Senators led by Sens. Jeff Merkley (D-Ore.) and Dick Durbin (D-Ill.) sent a similar letter. Furthermore, an ever-changing and uncertain regulatory regime has frustrated the efforts of companies attempting to explore for oil and natural gas in the waters off Alaska. Should a select handful of regulators and policymakers be successful in their attempt to thwart Arctic energy development, the United States will effectively cede this vital, strategic ground to other Arctic nations interested in tapping those resources.

In the Atlantic, companies have yet to be allowed to conduct seismic studies of the region in order to determine if further exploration would be prudent. The current Department of the Interior five-year plan for Outer Continental Shelf Oil and Gas Leasing contains no provisions for planned federal lease sales in the Atlantic or South Atlantic region. This despite report after report showing the dramatic potential for both oil and gas production and economic growth in the region should exploration be allowed.

A new study by the American Petroleum Institute and the National Ocean Industries Association shows that by 2035, access to areas in the Atlantic Outer Continental Shelf could create more than $23 billion in economic activity and 280,000 jobs. More importantly, exploration would provide up to $51 billion in local, state and federal revenues, helping cash-strapped states and localities return to pre-recession levels of funding.

The Interior Department is about to begin the process of creating a new five-year plan that would determine offshore leasing for 2017- 2022. Allowing energy development in the Mid-and South-Atlantic OCS would provide a huge boost to the economy. Offshore exploration has strong public support and has been endorsed by many East Coast  governors and Senators. In the Arctic, regulatory uncertainty and potential overregulation is causing us to fall behind other Arctic nations. Both Congress and the Administration would do well to work with industry to create a workable and safe Arctic exploration plan.


2 Comments on "US Should Tap the Offshore Goldmine"

  1. Makati1 on Wed, 25th Dec 2013 1:12 am 

    RIGZONE PetroPorn…

  2. rockman on Wed, 25th Dec 2013 2:45 pm 

    Makati – So true. They may not like to admit it but in fact President Obama has been one of the fossil fuel industry’s biggest promoters. Just in the last few years he’s offered over 100 million acres of offshore leases, approved 100’s of offshore drill permits including the Deep Water, expanded gov’t coal leases allowing the US to become the 4th largest producer in the world and is currently pushing expansion of coal export facilities which will aid our current record export volumes.

    Rig Zone is a great source for technical info…my primary source. But the editorial side is often just wasted print IMHO.

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