Let’s open more of the US offshore for energy development

Let’s open more of the US offshore for energy development
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Some media reports have described on this week’s federal Gulf of Mexico lease sale as “disappointing,” “modest” and “tepid.” In reality, more offshore areas need to be open for energy development.

First, every offshore lease sale the federal government holds is welcome, because each represents new opportunity for the market to work as it should, with companies making investment decisions based on the potential for significant natural gas and oil production.


As the U.S. considers developing more of the outer continental shelf we should remember that about 94 percent of the federal outer continental shelf remains off limits to development. Now there is the prospect for even more development with a new offshore leasing program the administration is crafting. The end goal is to harness more of our offshore reserves to strengthen America’s future energy security while supporting local, state and national economies.


International Association of Drilling Contractors President Jason McFarland told E&ENews, the sale “reflects the oil and gas industry's improving market conditions and a regulatory environment which is favorable to the safe and responsible development of the vast amount of U.S. offshore natural resources.” 

A more important point underscored with this week’s Gulf sale is one we’ve been making — that the federal government needs to make available new offshore areas for study, research, exploration and development.

The Gulf is vitally important to U.S. oil production, accounting for 1.6 million barrels per day or about 17.7 percent of all domestic output, yet the areas offered for lease aren’t new. A map from the U.S. Bureau of Ocean Energy Management shows the preponderance of leases in the Gulf’s central and western planning areas compared to the Eastern Gulf:

Areas in the Eastern Gulf, the Atlantic and Pacific OCS and off Alaska should be considered for the future — and it’s encouraging that the U.S. Interior Department’s draft leasing program includes them. National Ocean Industries Association President Randall Luthi said while this week’s sale showed a “promising trajectory toward the future,” more offshore access is needed.

“Bonus bids are an indicator of the ability and confidence of producers to invest in the Gulf of Mexico. These are not new fields, and producers are attempting to pick the best of what is left,” Luhi said, “From that view, the bids demonstrate a solid commitment by the oil and natural gas industry to continue to invest in U.S. offshore energy and U.S. jobs.

“While the outlook is promising, it also comes with a note of caution that with companies looking globally for exploration opportunities, the United States must continue to evaluate how to keep the Gulf of Mexico and other parts of the U.S. outer continental shelf attractive in light of competition from Brazil and Mexico,” he added. 

Erik Milito, API director of upstream and industry operations noted this region has been in development for 50-plus years.

“We need opportunities in new areas so the industry can make the discoveries of resources that our economy will need for decades to come,” he added.

Again, this week’s Gulf lease sale is important for American energy and our nation’s security going forward. Natural gas and oil companies continue to look to the Gulf  and other offshore areas as they consider long-term investments.

At the same time, the United States offshore continues to offer an even wider energy potential that will begin to be unlocked only as new areas on the outer continental shelf are included in the federal leasing plan, making them an option for future development.

Mark Green is the editor of API’s Energy Tomorrow