Offshore drilling plan excludes Virginia

November 8, 2011

The Obama administration’s new five-year plan for offshore oil and gas drilling includes lease sales in federal waters in the Gulf of Mexico and off the coast of Alaska but will not offer leases for drilling off Virginia or other parts of the eastern United States.

The Interior Department’s proposed plan delineates where oil and gas companies can bid, from 2012 to 2017, to lease offshore areas they think hold the promise of new oil and gas reserves. The plan drew fire from some environmental groups, which said it went too far, and from the American Petroleum Institute, whose president, Jack Gerard, called it a “missed opportunity” and said it did not go far enough in opening up new areas for drilling.

In postponing lease sales along the Eastern Seaboard, the plan took a step back from proposals President Obama made in the spring of 2010 before a blowout on BP’s Macondo well triggered last year’s giant oil spill in the Gulf of Mexico. Instead, the plan would allow seismic tests off the Atlantic coast to gather more information about how much oil and gas might be there.

“Here’s a state that has strong bipartisan support [for drilling], that has repeatedly asked the secretary to include a lease sale off Virginia, and they refuse to do it,” Gerard said.

But the plan won praise from others.

Shell spokesman Kelly op de Weegh called the proposed plan “positive recognition that responsible oil and gas activity will continue to play an important role in creating jobs and providing new, domestic supplies of energy.”

Rep. Edward J. Markey (Mass.), the top Democrat on the Natural Resources Committee, hailed the plan as striking an appropriate balance. And Oceana, a group that vigorously opposes offshore drilling, praised the Interior Department for saying that it would identify ecologically sensitive areas and improve safety measures before holding lease sales for Arctic areas off Alaska’s coast.

The Interior Department’s five-year proposal would focus on the Gulf of Mexico, where nearly 30 percent of U.S. total production comes from today. It plans a dozen lease sales there.

In Alaska, the administration plans to hold three lease sales, but those sales would be held near the end of the five-year period.

“In Alaska and off its coast, the Proposed Program recommends that the current inventory of already-leased areas in the Arctic should be expanded only after additional evaluations have been completed, and in a manner that accounts for the Arctic’s unique environmental resources and the social, cultural, and subsistence needs of Native Alaskan communities,” Deputy Interior Secretary David J. Hayes said in a statement.

Oceana’s Arctic project manager Chris Krenz said that he was “encouraged” that the administration was “looking at getting the science done first” and would try to identify ecologically sensitive areas and remove them rather than leasing broad areas.

But Cindy Shogan, executive director of the Alaska Wilderness League, said the plan represented a “headlong rush to drill in America’s Arctic Ocean” and was “business as usual” despite last year’s oil spill and pledges to take greater care. She said “drilling in the Arctic Ocean is tantamount to ‘Mission Impossible.’ ”

Several environmental activists noted that the announcement Tuesday came on the eve of what the National Weather Service says could be one of the worst storms ever to hit western Alaska, not far from some proposed exploration areas.

Steven Mufson covers energy and other financial news.
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