The Obama administration has laid out a relatively slow timeline for reviewing the terms of possible exploration and production of oil and natural gas in the Atlantic Ocean.
In a letter to Congress, the Interior Department said it will complete the necessary steps to plan for the possibility of “multiple geological and geophysical activities” in federal waters off the East Coast in two years.
The department plans to hold environmental reviews, scoping meetings, and public comment periods before issuing a final decision on offshore energy activities in the Atlantic by April 2012. Any exploration drilling would not occur until at least 2014.
The announcement builds on President Barack Obama's recent hint that his administration is considering "opening new offshore areas for oil and gas development" and Interior Secretary Ken Salazar's plans to review applications to shoot seismic tests off the East Coast (OD Jan.28,p1).
At present, offshore access is mostly limited to the western two-thirds of the Gulf of Mexico and offshore Alaska. The oil and gas industry is particularly interested in gaining access to the Atlantic because of its proximity to major northeast cities.
However, industry groups and some policymakers from coastal states accuse the Obama administration of moving too slowly on offshore leasing following the expiration of longstanding moratoria on offshore drilling that lapsed in 2008 (OD Jan.5,p1).
In a study released Monday, the National Association of Regulatory Utility Commissioners (NARUC) said the economic impacts of maintaining the moratoria would be significant and would drag down US economic growth over the next two decades.
The US currently produces about 5.4 million barrels of oil and 20 trillion cubic feet of gas a day, but those numbers will decrease as areas currently open for exploration run dry, the study said.
If the moratoria were reinstated, cumulative domestic oil and natural gas production would decrease by 15% and 9% respectively, cutting gross domestic product (GPD) by $2.36 trillion from 2009 to 2030, or about half a percentage point a year.
Total cumulative disposable income would fall by $1.16 trillion over the 20-year period, while average natural gas prices would increase 17% and average electricity prices would increase by 5%, the NARUC report said.
Proponents of expanded offshore exploration, including the American Petroleum Institute (API), have argued that it could create thousands of new jobs as well as cut the US trade deficit with other nations. API and the American Gas Association co-sponsored the NARUC study.
NARUC's findings could boost support for compromise energy legislation that would increase offshore drilling and make way for an expansion of nuclear power capacity, in return for an agreement to increase the percentage of electricity generated from renewable sources of energy.
However, recent changes in the political landscape may undermine efforts to pass energy legislation this year. Several senior Democratic Senators have announced their retirements since January after the party failed to push through health care reform after a long and divisive national debate.
Indiana Senator Evan Bayh, the latest to announce his retirement, sits on the Senate Energy and Natural Resources Committee and was viewed as an important negotiator in efforts to negotiate compromise energy legislation.
“There are so many reasons now for politicians not to take that hard vote right now,” said Dan Kish, the Institute for Energy Research’s Vice President. “Things have dramatically changed in the past six months.”
Lauren O’Neil and Bill Murray, Washington
