US bans all new offshore oil and gas drilling leases

01 December 2010 20:35  [Source: ICIS news]

WASHINGTON (ICIS)--The Obama administration on Wednesday said it will not issue new oil and gas exploration leases in any US offshore areas other than those already under development in the Gulf of Mexico, and none in those regions until 2012.

Interior Department Secretary Ken Salazar said that due to the consequences of the BP Deepwater Horizon rig explosion in April this year and the subsequent spill of some 5m bbl of oil into the Gulf, the administration was rescinding plans announced in March to open more of the US outer continental shelf (OCS) regions to oil and gas drilling.

In March, about a month before the catastrophic BP oil spill, the Obama administration had announced general plans to include US territorial waters of the eastern Gulf and parts of the nation’s Atlantic coast offshore areas in the next five-year OCS development plan for 2012-2017.

But Salazar said that because of the lessons learned from the BP Gulf spill, and in order to allow ongoing studies of the spill’s environmental consequences, he was withdrawing those Atlantic coastal areas and the eastern Gulf regions from the 2012-2017 OCS development plan.

In addition, he said that no new leases would be issued for those US areas of the central and western Gulf of Mexico that are already under development until late 2011 or sometime in 2012.

Gulf of Mexico lease sales that were already scheduled for March and August 2011 have been pushed back to 2012 at the earliest, he said.

Further, no new leases would be issued before 2012 for offshore areas of the Alaska coasts, he said. 

A decision on whether to allow any offshore oil and gas development in Alaskan waters in the 2012-2017 period would only be made after extensive environmental impact studies, input from other federal agencies, environmental groups and Alaskan native tribes.

Salazar said that environmental studies of the consequences of the 5m bbl BP well spill would require at least another year to be completed and that no new leases in the existing Gulf development areas would be issued until those studies are done.

He also said that whether new leases in the central and western Gulf regions would be issued in 2012 could only be determined after public hearings that would be held next year.

The Interior Department announcement was quickly followed by harsh criticism and condemnation by energy industry interests.

The American Petroleum Institute (API) said that the OCS policy announced by Salazar “will stifle investment, deny billions in revenue for critical government services and increase our dependence on foreign energy sources”.

API president Jack Gerard said that the Obama administration’s reversal of its limited offshore energy development plan issued in March “comes on top of a de facto moratorium, which has all but stopped new drilling in the Gulf of Mexico”.

The Institute for Energy Research (IER), an oil industry think-tank, charged that the Interior Department announcement on Wednesday barring any new offshore leasing was part of the Obama administration’s “vendetta against domestic energy production”.

The Independent Petroleum Association of America (IPAA), which represents drilling operators, said the new offshore leasing ban was nothing less than “an attack on the American economy and our nation’s energy security”.

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By: Joe Kamalick
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