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IHS CERA 2015: Interior secretary signals five-year offshore plan could be reduced

Houston — US Interior Secretary Sally Jewell indicated Monday that the Obama administration's five-year plan for offshore oil and gas leasing could include fewer lease sales and fewer offshore plays before it is finalized, despite an industry push for the plan to include more sales in additional offshore areas.

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The plan, which Interior unveiled in January, calls for 14 potential lease sales in eight of the 26 possible offshore planning areas from 2017 to 2022, including a possible sale off the US East Coast. But the plan, to the frustration of the industry, does not include sales in the Pacific nor offshore Florida's coast and just three sales in federal waters offshore Alaska.

During a news conference at the annual IHS CERAWeek conference in Houston, Jewell indicated the plan may change before it is proposed and finalized by 2016, but those changes would only be reductions in lease sales. Interior will not consider more sales than what it has already proposed, she said.

"There's two more bites at the apple here from what we've put out on the table as a proposed plan," Jewell said.


Jewell said Interior did not include many of the offshore areas industry wanted, such as along the Pacific Coast and much of the Atlantic, due to limited resources at her agency and opposition from states. In addition, it made "no sense" to include the eastern Gulf of Mexico in the plan since the area is under a congressional moratorium until 2022. Industry had pushed for the eastern Gulf to be included in case Congress lifts that moratorium.

"We need to strike the right balance between areas that should be developed and areas that are too special to be developed," Jewell said.

While she said the next administration could undo the five-year offshore leasing plan, she doubted it would happen.

"These aren't easy to change," she said.

Interior has unveiled a bevy of new rules in recent months, including new regulations for Arctic drilling, rules for fracking on federal and Indian lands, and new well-control regulations for offshore oil and gas operators.

Jewell said a draft proposed rule for methane venting and flaring at oil and gas operations would likely be unveiled by midsummer.

--Brian Scheid, brian.scheid@platts.com
--Edited by Jason Lindquist, jason.lindquist@platts.com