Questions and Answers - General
For too long, the United States has ignored the dangers of our overdependence on foreign oil. We send billions of dollars overseas each year to fuel our cars, homes, and economy. And our planet continues to suffer damage from carbon pollution.
President Obama has said that the nation needs a balanced, comprehensive approach to our energy security, using all appropriate conventional and renewable sources. That means wind, solar, hydropower, geothermal, nuclear, coal, natural gas and oil. We also need to use science, including the most effective energy efficiencies and technologies available, to maximize the benefits from our domestic resources. And we need to work toward a clean energy economy that creates jobs here at home, addresses the real threat of climate change, and will allow us to lead the world in the energy technologies that will define the next century.
We must use an orderly, scientifically grounded approach to evaluate the potential benefits against the potential risks of development.
The Outer Continental Shelf contains billions of barrels of oil and trillions of cubic feet of natural gas that can contribute to our nation’s energy supply. The areas we are evaluating for potential exploration and development under the new five-year program we are proposing, for example, contain undiscovered, economically recoverable resources of about 39 to 62 billion barrels of oil and 168 to 294 trillion cubic feet of gas. That represents as much as 80% of the undiscovered economically recoverable oil and gas on the U.S. outer continental shelf.
The strategy we are announcing today will guide our nation’s efforts to responsibly expand offshore oil and gas production over the next 7 years. The Administration’s strategy supports expanded development and production in the Gulf of Mexico, where we have oil and gas infrastructure and the greatest proven resources and appropriate environmental safeguards. It also supports oil and gas exploration in frontier areas, such as the Arctic Ocean and the Atlantic Ocean, because we have little information about potential hydrocarbon resources or the potential benefits and risks of development in those areas. The strategy also calls for protections of areas that are not appropriate for development.
Q2: Some critics claim that the Administration’s oil and gas policies have caused energy prices to rise, especially gasoline prices which have raised $1 a gallon since January 2009. How do you respond to those charges?
Energy prices are set by the world market -- all economic analyses (including the Department of Energy’s Energy Information Administration) conclude that variations in domestic production have a trivial impact on global oil prices. Domestic oil production from Federal lands – both onshore and offshore – actually increased in 2009 over 2008, yet this did not prevent world oil prices from rising.
The Administration is expanding offshore oil and gas exploration and development in the right ways and in the right places, providing order and certainty to industry and investors, and delivering a fair return to American taxpayers for the use of their resources. Our strategy uses science and new technologies to expand oil and gas production on the Outer Continental Shelf, while protecting fisheries, tourism, and places off our coasts that are too special to drill.
We are working to expand development and production in new areas, such as the Gulf of Mexico; significantly increase oil and gas exploration in frontier areas, such as the Arctic Ocean and areas in the Atlantic Ocean; and protect areas that are simply too special to drill, such as Alaska’s Bristol Bay.
It is important to note that just a few weeks ago Interior’s Minerals Management Service conducted a highly successful offshore oil and gas lease sale in the central Gulf of Mexico, which offered 36 million acres and took in $949 million in high bids.
Q3: What has the Administration done specifically to spur oil and gas development?
Our comprehensive energy plan offered 55.8 million acres on and off-shore in FY2009 (53 million on the OCS and 2.9 million acres on-shore). Federal onshore/offshore oil production increased 14% in 2009. Onshore bonus revenues in 2009 were at their highest since 2001. Onshore acres leased increased 9% between 2007 and 2009 – that’s a 53,000-acre increase. Offshore acres leased increased 5% between FY2007 and FY2009 – from 38 million to 40 million acres.
And we’re doing more now. This year onshore development by Interior Bureau of Land Management will hold 38 lease sales for oil and natural gas on public lands. Offshore, we expect overall OCS oil production to increase by more than 20% in 2011. We anticipate 15 new deepwater facilities to arrive in the Gulf of Mexico by 2011. We have scheduled four OCS lease sales in 2011; the actual number of sales that will be held will depend on industry interest.
Q4: Are the public comments collected on the 2012-2017 plan available for review?
Yes. All of the comments received on the draft proposed program for OCS development are posted and available to the public at regulations.gov and have been since mid-2009. Anybody may review the public comments at that site and conduct their own analysis of the varied opinions, which range from reactions to a single proposed oil and gas sale, to comments on the entire 5-year program.
Q5: What is the status of the court case on the current 5-year OCS oil and gas development program, affecting the Alaska OCS areas?
We are today sending the U.S. Court of Appeals for the District of Columbia Circuit our Preliminary Revised Program, and submitting it to the Congress and President, and announcing a 30-day public comment period in the Federal Register, in keeping with the commitments in the Government’s petition to the Court on May 11, 2009. After consideration of any comments received, the Secretary of the Interior will finalize the leasing program for 2007-2012.
Interior’s Minerals Management Service worked expeditiously to address the environmental sensitivity issues identified by the Court. The Department provided the Court with periodic reports on the progress of its review of the existing 5-year program to ensure that it properly balanced environmental sensitivity concerns with the Nation’s energy needs.
On April 17, 2009, the Court remanded the 2007-2012 OCS oil and gas leasing program, requiring the Interior Department to "conduct a more complete comparative analysis of the environmental sensitivity of different areas". The Court found the Department failed to properly analyze the environmental sensitivity and marine productivity of different areas of the OCS hindered Interior’s ability to comply with the balancing requirement specified in the Outer Continental Shelf Lands Act, which directs the Secretary of Interior to consider "the relative environmental sensitivity and marine productivity of the different areas of the outer Continental Shelf."
The Department conducted a more complete environmental sensitivity analysis, including analysis beyond the shoreline that compares the environmental sensitivity of all 26 OCS planning areas, and identifies those areas whose environment and marine productivity are most and least sensitive to OCS activity.
Q6: Does the Administration’s announcement regarding the current 5-year program mean that the area off Virginia in the Mid-Atlantic OCS planning area will be opened for oil and gas development?
Not necessarily. Offering the sale off of Virginia is only the first step in an orderly process that includes environmental reviews and analyses, regulatory compliance, exploration, testing and other considerations. The announcement does not guarantee that that area will be leased, evaluated, explored and developed for oil and gas. Secretary Salazar has said that the lease sale will depend on whether there is interest from industry, whether development can be done in an environmentally responsible manner, and whether development can be shown to not compromise critical military training in the Atlantic.
Q7: Does the Administration’s announcement for the new 5-year program (2012 -2017) mean the Mid Atlantic, South Atlantic, and Eastern Gulf of Mexico OCS planning areas will be open to oil and gas development in the next 5-year program?
Not necessarily. Scoping in an area or inclusion in an Environmental Impact Statement does not mean that an area will ultimately be made available for leasing. However, an area must be analyzed in the EIS in order to be considered for leasing. Decisions as to whether to schedule lease sales in these areas, and if so, whether to remove from leasing consideration those parts of the planning areas with conflicting uses (e.g., military training requirements; shipping lands) or particular sensitivity, will come later in the process of developing the new 5-year program and the pre-sale process.
In addition, the area in the Eastern Gulf to be scoped for the draft EIS focuses on the southwestern third of the planning area rather than the entire area contemplated in the January 2009 Draft Proposed Program. Furthermore, much of the Eastern Gulf is subject to a Congressional moratorium until 2022. To allow leasing in those areas, Congress would need to modify or eliminate the restriction. If that were to happen, the area must be on an approved 5-year schedule for leasing to be considered.
Q9: To what extent did the court mandate for further environmental analysis and greater sensitivity to environmental impacts influence the decision to pull oil and gas leases scheduled in the current five year program for the Beaufort and Chuckchi Seas?
The Secretary used the expanded environmental sensitivity analysis developed in response to the Court remand, the information and analysis on the other Outer Continental Shelf Lands Act section 18 factors that were unchanged, the Final EIS, and other information contained in the administrative record to exercise his own judgment to reach his decisions. His goal was to strike the proper balance, to the maximum extent practicable, between the potential for environmental damage, the potential for the discovery of oil and gas, and the potential for adverse impact on the coastal zone.
In the case of the Beaufort Sea and the Chukchi Sea (other than lease sale 193 held in 2008), the Secretary intends to time sales in Arctic areas to allow results of postlease exploration activities to be available for future planning in the next 5-year cycle. Due to litigation, leases issued in Beaufort Sea Sale 202, held in April 2007, have yet to be explored, as is the case for Chukchi Sea Sale 193 leases. Also his decision reflects the potential difficulty of removing oil spilled in icy waters, limited infrastructure available to respond to spills, and environmental considerations such as climate change. There is research underway that along with new information will provide the opportunity to make more informed decisions regarding Arctic sales in the next 5-year program. Secretary Salazar has also requested that the United States Geological Survey (USGS) conduct an initial, independent evaluation of science needs to understand the resilience of Arctic coastal and marine ecosystems to OCS resource extraction activities. The study will summarize what information is available, where knowledge gaps exist, and what research is needed to mitigate risks.
Q10: Does this offshore energy strategy reflect the input and recommendations of the Ocean Policy Task Force?
A10: As an active participant on the President's Ocean Policy Task Force, we believe today's announcement follows the spirit of the draft recommendations by supporting the stewardship and resiliency of our nation's coastal and ocean resources, while also benefiting the economies and communities that rely on them. As we move forward with our process, the Department of the Interior will ensure that decisions are made in the context of an integrated, comprehensive, ecosystem-based planning for our coastal and ocean resources. For more information about the Ocean Policy Task Force, click here.
Q11: The Draft Proposed Plan announced by Secretary Kempthorne contemplated potential oil and gas development up to 75 miles from the west coast of Florida. Does the Obama Administration support oil and gas drilling that close to the Florida coastline?
A11: We will work with Congress to determine how we might open new areas in the Eastern Gulf of Mexico in a manner that protects Florida’s coastline and military training and testing in the area. Our goal is to schedule lease sales in the Eastern Gulf for the 2012-2017 program.
The area of the Eastern Gulf of Mexico that will be part of the scoping for the EIS for the 2012-2017 program focuses on the southwestern third of the planning area rather than the entire area contemplated in the January 2009 Draft Proposed Program.. Within the Eastern Gulf planning area, the Administration has identified an area of interest more than 125 miles from Florida’s coast that, if opened by Congress, would make available 2/3 of the resources in the Eastern Gulf planning area. The Administration will focus its work with Congress on determining how this area of interest could be opened in a manner that protects Florida’s coastline and military training and testing in the area.
Q12: What action is the President taking today with regard to potential leasing in Bristol Bay, Alaska?
A12: President Obama is using the authority granted under Section 12(a) of the Outer Continental Shelf Lands Act, 43 U.S.C. 1341(a), to withdraw from leasing the Bristol Bay area of the North Aleutian Basin in Alaska through June 30, 2017. The withdrawal, which had been in place by previous presidents of both parties, prevents consideration of Bristol Bay for leasing for any oil or gas development in the Outer Continental Shelf, whether for exploratory or production purposes. The withdrawal does not affect the rights under existing leases in this area. It is also subject to revocation by the President in the interest of national security.
Q13: Is any oil or gas production underway or scheduled for Bristol Bay?
A13: There is no oil and gas infrastructure in the Bristol Bay region, which is located about 200 miles southwest of Anchorage. While some oil and gas leases were awarded in the 1980s, Congress spent $100 million in 1995 to buy back those leases and preserve Bristol Bay for its fishery and other ecological resources.