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Congressman Garret Graves

Representing the 6th District of Louisiana

FACT SHEET: Executive Order - Offshore Energy Development

April 28, 2017
Blog Post

FACT SHEET

Today the president signed an Executive Order Implementing an America-First Offshore Energy Strategy. The following is a high level summary of what is in it. ​

Past administrations have been overly restrictive of offshore energy exploration and have taken off the table hundreds of millions of offshore acres for development. As a result, 94 percent of the Outer Continental Shelf is off-limits to responsible energy development. The America First Offshore Energy Executive Order directs a review of the locations available for offshore oil and gas exploration and of certain regulations governing offshore oil and gas exploration.

BACKGROUND

The 5-Year Program for oil and gas development establishes a schedule of oil and gas lease sales proposed for planning areas of the U.S. Outer Continental Shelf (OCS). The Secretary of the Interior specifies the size, timing, and location of potential leasing activity that determines will best meet national energy needs. On January 17, 2017, the Obama Administration approved the 2017-2022 OCS Oil and Gas Leasing Program.

The Outer Continental Shelf Lands Act (OCSLA), created on August 7, 1953, defines the OCS as all submerged lands lying seaward of state coastal waters (3 miles offshore) which are under U.S. jurisdiction. Under the OCSLA, the Secretary of the Interior is responsible for the administration of mineral exploration and development of the OCS. The OCSLA empowers the Secretary to grant leases to the highest qualified responsible bidder on the basis of sealed competitive bids and to formulate regulations as necessary to carry out the provisions of the OCSLA. The OCSLA, as amended, provides guidelines for implementing an OCS oil and gas exploration and development program. The Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE) are the agencies at the Department charged with management of our Nation’s 1.7 billion OCS acres.

Today 94 percent of the OCS is off limits for responsible development. As of March 1, 2017, only 16.3 million acres on the OCS (out of a total 1.7 billion acres) are under lease for oil and gas development (3,087 active leases) and 4.4 million of those acres (885 leases) are producing oil and natural gas. More than 97 percent of the leases are in the Gulf of Mexico; about 3 percent are on the OCS off California and Alaska. These 16.3 million acres account for 18 percent of domestic oil production and 4 percent of U.S. natural gas production.

Offshore energy development is one of the leading sources of revenue into the Treasury, behind tax payments to the IRS. That revenue comes in the form of bids paid from leasing, rents, and royalties paid on production. The Department of the Interior in March established a Royalty Policy Committee to ensure taxpayers get a fair value for energy leases and rents.

In 2008, Federal leasing revenues for the OCS were nearly $18 billion dollars. By contrast, in 2016, leasing revenues were approximately $2.8 billion. That’s a drop of more than $15 billion that would otherwise go to the Treasury or toward funding important conservation programs like the Land and Water Conservation Fund and the Historic Preservation Fund.

Encouraging energy exploration and production, including on the OCS, will help bolster the Nation’s position as a global energy leader and foster energy security and resilience for the benefit of the American people. Proper regulation will ensure that drilling and exploration is safe and environmentally responsible.

OFFSHORE OIL AND GAS

The Department of the Interior’s Bureau of Ocean Energy Management (BOEM) estimates the OCS contains about 90 billion barrels of undiscovered technically recoverable oil and 327 trillion cubic feet of undiscovered, technically recoverable natural gas. The Gulf of Mexico, covering 160 million acres of OCS, has 48.46 billion barrels of technically recoverable oil and 141.76 trillion cubic feet of technically recoverable natural gas.

The sales value of the oil and gas resources amounted to about $26 billion, and generated about $55 billion in total spending in the economy. These expenditures supported approximately 315,000 domestic jobs.

EXECUTIVE ORDER: DETAILS

What the Executive Order (EO) does:

  • 5-Year Plan: The EO directs the Secretary of the Interior to revise or initiate a new 5-year plan that considers access to areas that the last administration closed down.
  • Arctic withdrawal: The EO reverses President Obama’s withdrawal of our Arctic OCS Planning Areas, and several other areas. Some withdrawals are left in place, including the North Aleutian Basin.
  • Seismic surveying: The EO encourages the Department of the Interior and the Department of Commerce to work together to come up with a more streamlined seismic surveying process in order to better use this science so that Americans can better understand our energy wealth.
  • Regulatory Measures: The EO directs the Department of the Interior to reconsider several regulations that have been finalized very recently so that responsible development can continue without compromising safe operations.

Smart Planning: The EO allows the Department of the Interior and other agencies like the Department of Defense to have an input on offshore Marine Monument and Marine Sanctuary designations and expansions. Just like on land, our Federal waters have multiple uses, such as Department of Defense training, offshore energy, commercial and recreational fishing, and protecting our marine borders.

What the Executive Order doesn’t do:

  • This Executive Order does NOT interrupt lease sales that are scheduled in the current 5-year plan.
  • This Executive Order does NOT require leasing in the Eastern Gulf of Mexico.
  • This Executive Order does NOT increase conflicts with military uses of the OCS.
  • This Executive Order does NOT guarantee development in any area, it simply restarts the planning process.

The planning process will be similar as previous 5-year plan processes. The same areas will be open (all of the OCS) and by law, the Department of the Interior will go through a “winnowing” process where the Department collects input from states, other agencies, and the public. Over months of study, the available area is narrowed down to the areas that make the most sense to lease. Some areas may not make sense for energy development and the statute-driven process provides the Department of the Interior with discretion. For example: the State of California has opposed increased access in the past, even from existing platforms. While it was “open” when the previous administration last initiated the 5-year plan, it was not chosen for leasing. This

Administration values local input and will be making careful and deliberative choices again as a part of this process.

The order directs the Secretary of the Interior to:

Revisit the 5-year plan of proposed oil and gas development in each of the following Outer Continental Shelf Planning Areas: Western Gulf of Mexico, Central Gulf of Mexico, Chukchi Sea, Beaufort Sea, Cook Inlet, Mid-Atlantic, and South Atlantic.

Work with the Department of Commerce and to the maximum extent permitted by law, a streamlined permitting approach for privately funded seismic data research and collection aimed at expeditiously determining the offshore energy resource potential of the United States, within the Planning Areas.

Review the following rules and regulations:

  • Notice to Lessees and Operators of Federal Oil and Gas, and Sulfur Leases, and Holders of Pipeline Right-of-Way and Right-of-Use and Easement Grants in the Outer Continental Shelf (September 2016)
  • Oil and Gas and Sulfur Operations in the Outer Continental Shelf-Blowout Preventer Systems and Well Control (April 2016)
  • Air Quality Control, Reporting, and Compliance (April 2016)
  • “Oil and Gas and Sulfur Operations on the Outer Continental Shelf—Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf,” (July 2016)

The order directs the Secretary of Commerce to:

Refrain from designating or expanding any National Marine Sanctuary under the National Marine Sanctuaries Act, unless the sanctuary designation or expansion proposal includes a timely, full accounting from the Department of the Interior of any energy or mineral resource potential within the designated area and the potential impact the proposed designation or expansion will have on the development of those resources.

Within 180 days, conduct a review of all designations and expansions of National Marine Sanctuaries, and of all designations and expansions of Marine National Monuments under the Antiquities Act of 1906 designated or expanded within the 10-year period prior to the date of this order.

Review the following policy:

NOAA’s Technical Memorandum of July 2016 (Technical Guidance for Assessing the Effects of Anthropogenic Sound on Marine Mammal Hearing)

Issues: