Below is a summary of publicly available activities currently underway that could affect the development of offshore oil and gas resources prepared by Brent Greenfield, HBW Resources’ Director of Ocean Policy and Regulatory Affairs.
Committee Chairs In Flux
In a week of limited activity in Congress, the announcement that Senator Baucus would soon be tapped as the next Ambassador to China sets in motion a number of changes of great significance to energy development. Senator Baucus is expected to be nominated and confirmed in the later part of January. If this occurs, Senator Ron Wyden, the current Chair of the Energy and Natural Resources Committee, is next in line to become the Chairman of the Senate Finance Committee. Senator Mary Landrieu would become the next Chairwoman of the Energy and Natural Resources Committee. Finally, the Democratic Governor of Montana, Steve Bullock, would have the opportunity to appoint an interim Senator to complete Senator Baucus’ term. Such an appointment could benefit Lt. Gov. John Walsh, who could use the position to elevate his profile against Rep. Steve Daines, the early front-runner for the seat.
OCS Governors Weigh In On DOI Report, Vice Chair Announced
The Outer Continental Shelf Governors Coalition (Coalition) has submitted a letter to Interior Secretary Sally Jewell to comment on the Bureau of Ocean Energy Management’s (BOEM) Annual Progress Report on the 2012-2017 Outer Continental Shelf Oil and Gas Leasing Program.
Chaired by Alaska Gov. Sean Parnell and comprised of the Governors of Alaska, Alabama, Louisiana, Mississippi, North Carolina, South Carolina, Texas, and Virginia, the Coalition supports responsible energy development and promotes a stronger energy dialogue between federal and state policy makers on offshore energy matters.
Among other things, the letter:
- Notes the regulatory actions, technological advances, and industry investments in offshore safety that have taken place in recent years;
- Applauds the continuation of areawide leasing in the Western and Central Gulf of Mexico;
- Encourages finalization of the environmental review for seismic activity in the Mid- and South Atlantic;
- Commends BOEM Director Tommy Beaudreau for recent comments acknowledging the ability to proceed with proposing leasing in the Atlantic even in the absence of new seismic data;
- Urges immediate commencement on the next 5-year offshore oil and gas leasing program in order to fully consider the opportunity to include Atlantic leasing;
- Applauds the scheduling of an Eastern Gulf of Mexico (EGOM) lease sale in 2014 and urges BOEM to begin preparations now for access to the EGOM area that is currently under moratorium; and
- Conveys its opposition to targeted leasing in the Arctic in place of areawide leasing
During opening remarks at the North Carolina Chamber of Commerce’s recent energy forum in Raleigh, North Carolina Gov. Pat McCrory announced that he has accepted the position of Vice Chair of the Coalition. Gov. McCrory said that “[o]pening up the waters off North Carolina to sensible oil, natural gas and renewable energy development is a vital part of our state’s energy policy”
New Study Released on Economic Benefits of Atlantic Offshore Development
The American Petroleum Institute (API) recently announced the release of a new study conducted by Quest Offshore Resources, Inc. which finds that between 2017 and 2035, oil and natural gas development in federal waters off the U.S. Atlantic Coast could generate 280,000 new jobs, lead to nearly $200 billion in new private investment, annually generate up to $23.5 billion for the U.S. economy, produce $51 billion in new government revenue, and add 1.3 million barrels of oil equivalent to daily U.S. energy production.
API Director of Upstream and Industry Operations Erik Milito called oil and gas production in the U.S. Atlantic “a potential gold mine,” adding that the benefits associated with Atlantic production would not occur “unless the federal government follows pro-development energy policies.”
NOIA President Randall Luthi said that “the key is getting Atlantic lease sales included in the 2017-2022 Offshore Leasing Plan,” calling the development of additional offshore energy sources the “elusive silver bullet” that would lower unemployment, raise federal revenue without higher taxes, and increase U.S. energy security.
Eastern Gulf of Mexico Oil & Gas Lease Sale Scheduled for March 2014
The Interior Department’s Bureau of Ocean Energy Management (BOEM) has announced that it will hold Eastern Gulf of Mexico Planning Area (EPA) Lease Sale 225 in New Orleans, LA on Wednesday, March 19, 2014. Affected states can comment on the size, timing, and location of the proposed lease sale within 60 days following their receipt of the Proposed Notice of Sale.
The sale, which is one of only two that are proposed in the EPA in the current 5-year offshore leasing program, will offer roughly 134 whole or partial unleased blocks covering ~465,000 acres of federal waters that are located in water depths ranging from 2,657 to 10,213 feet. The closest point of land is located 125 miles northwest in Louisiana. BOEM estimates that the sale could lead to the production of 71 million barrels of oil and 162 billion cubic feet of natural gas.
Comments Sought on Application for Permit to Modify/Drill-Related ICRs
The Interior Department’s Bureau of Safety and Environmental Enforcement (BSEE) recently announced that it is seeking comments on its intention to seek Office of Management and Budget (OMB) approval of an Application for Permit to Modify (APM)-related information collection.
The announcement notes that approval of the request would provide BSEE and industry with “a better understanding” of regulatory requirements related to data and information submitted with APMs by separating out the hours and non-hour cost burdens associated with APMs into its own collection. BSEE states that this would (1) make it easier to correlate APM burden requirements in other subparts with their respective burden and (2) reflect more accurate burden estimates.
BSEE separately announced that it is seeking comments on its intention to seek OMB approval of an Application for Permit to Drill-related information collection.
The announcement notes that approval would allow BSEE to consolidate APDs, revised APDs, and supplemental APD information sheets into one information collection request, which the agency said would (1) make it easier to correlate APM burden requirements in other subparts with their respective burden and (2) reflect more accurate burden estimates.
Comments on both information collection requests are due by Monday, February 3, 2014.
Comments Sought on Oil & Gas Valuation-Related Information Collection Request
The Interior Department’s Office of Natural Resources Revenue (ONRR) has announced that it is seeking comments on its request for the Office of Management and Budget to renew its approval of an oil and gas valuation-related information collection.
The information collection request addresses lessee responses to information collections pertaining to (1) federal oil and gas valuations, including transportation and processing allowances and requests to exceed the regulatory allowance limit; and (2) accounting and auditing relief from marginal properties. This covers Forms ONRR-4393 and ONRR-2014.
The public is urged to submit comments by Thursday, January 2, 2014.
DOI Announces $627M in Proposed GOM Restoration Projects
The Interior Department recently announced that it is seeking comments on a Draft Programmatic and Phase III Early Restoration Plan and Draft Early Restoration Programmatic Environmental Impact Statement (Draft Phase III ERP/PEIS) that has been prepared by the Federal and State natural resource trustee agencies that are conducting the Deepwater Horizon-related Natural Resource Damage Assessment.
Comments are sought on the proposed alternative contained in the Phase III DERP/PEIS, which proposes 44 early restoration projects valued at $627 million. Roughly 63% of the funds would be applied toward ecological projects, while 37% would be allocated to lost recreational use projects.
Comments on the Draft Phase III ERP/PEIS are due by Tuesday, February 4, 2014, and ten public meetings with opportunities to provide comments will be held in the 5 Gulf Coast states between Dec. 16, 2013 and Jan. 29, 2014.
The Phase III DERP/ER has been prepared under the terms of the “Framework for Early Restoration Addressing Injuries Resulting from the Deepwater Horizon Oil Spill” (Framework Agreement), under which BP agreed to provide up to $1 billion to address Deepwater Horizon-related natural resource injuries prior to the resolution of the Natural Resource Damage Assessment.
Senior White House Environmental Advisor to Depart in February
White House Council on Environmental Quality Chair Nancy Sutley recently announced that she will step down from her post in February. President Obama thanked Sutley for her service, noting her “central role in overseeing some of our biggest environmental accomplishments,” including “our first comprehensive National Ocean Policy…and our Climate Action Plan that will help leave our children a safer, healthier planet.” He added that Sutley’s efforts “have made it clear that a healthy environment and a strong economy aren’t mutually exclusive…”
As CEQ Chair, Sutley has also served as Co-Chair of the National Ocean Council since its establishment in 2010.
BOEM Announces Availability of Q3 2013 Gulf of Mexico OCS Environmental Documents
The Interior Department’s Bureau of Ocean Energy Management has published a list of 67 Site-Specific Environmental Assessments and Findings of No Significant Impact that were prepared between July 1, 2013 and September 30, 2013 for oil, gas, and mineral-related activities that were proposed in the Gulf of Mexico.
BOEM: No Competitive Interest in Proposed Wind Energy Research Area Offshore VA
Following its July 2013 solicitation for interest that was issued in response to an unsolicited request by the Virginia Department of Mines, Minerals and Energy (DMME) for a wind energy research lease in federal waters located in 6 OCS sub-blocks to the west of the BOEM-designated Wind Energy Area offshore Virginia, the Interior Department’s Bureau of Ocean Energy Management (BOEM) has announced its finding that there is no competitive interest. Official notice was subsequently published.
DMME’s proposed project would involve the installation and operation of two 6-megawatt wind turbines, ancillary metocean facilities, a meteorological tower or buoy, and associated cabling to shore.
The announcement notes that BOEM will proceed with the leasing process on a non-competitive basis, and that the finding of no competitive interest will allow DMME to submit a renewable research activity plan that would be subject to a project-specific environmental review and public comment period.
Federal Regulatory Activity Update Released to Public
The Obama Administration recently published the semi-annual regulatory agendas for all federal entities with regulations currently under development or review (Unified Agenda), as well as agency statements of regulatory priorities and additional information about the most significant activities planned for the coming year (Regulatory Plan).
As to the Bureau of Ocean Energy Management (BOEM), the Interior Department’s Regulatory Plan notes that the agency’s near-term regulatory agenda will focus on issues including the following: expanding renewable energy resources, promoting safe drilling activities on the Alaska Outer Continental Shelf, protecting the environment, updating the agency’s Air Quality Program, and protecting OCS sand, gravel, and shell resources.
Bureau of Safety and Environmental Enforcement (BSEE) priorities over the next year will be compliance, oil spill response, Alaska, and managing and mitigating risk, while the Office of Natural Resources Revenue priorities include simplifying valuation regulations for oil and gas produced from federal and Indian leases.
Specific entries in the Unified Agenda broken down by entity are available here.
BSEE Issues “Hot Work”-Related Safety Alert
The Interior Department’s Bureau of Safety and Environmental Enforcement (BSEE) has issued a Safety Alert related to the November 16, 2012 explosion and fire that took place on a Black Elk Energy Offshore Operations-operated platform located at West Delta Block 32 in the Gulf of Mexico.
In the wake of a recent Panel Investigation Report’s recommendations that operators of OCS facilities conduct a “safety stand down” and that the agency issue a Safety Alert, among other things BSEE calls on operators to conduct a safety stand down “for all of its operations that concisely describes” the Black Elk incident.
Deputy Interior Secretary Nominee Addresses Offshore-Related Issues
Following his nomination hearing in September, U.S. Deputy Interior Secretary-nominee Michael Connor has provided written responses to Questions for the Record that were submitted by members of the Senate Energy and Natural Resources Committee concerning offshore access and seismic activity, revenue-sharing, and the National Ocean Policy.
As to moving forward with permitting Atlantic seismic and leasing activity, Connor stated his commitment to working to “ensure that the Department actively seeks and considers coastal states’ interests as we analyze our leasing decisions,” noting that BOEM “is proceeding with a region-specific strategy in the area that focuses on the need to update data in order to inform future decisions about whether and, if so, where leasing would be appropriate.”
With regard to the sharing of offshore energy-derived revenues with coastal energy-producing states, Connor said that the Administration “is mindful of the long-held view that coastal states should share the benefits of energy development that takes place offshore and currently implements statutory revenue sharing under existing law.” As to future legislation, he stated that the Administration’s testimony on the FAIR Act “outlines several principles that are key to any potential agreement on how to proceed,” adding that “if confirmed, I commit to meeting with you in an effort to find any common ground that may exist and to work toward a path forward.”
Finally, with regard to the National Ocean Policy (NOP), Connor said that “[i]t is my understanding that neither the National Ocean Policy nor marine planning creates or changes regulations or authorities,” further stating that the Implementation Plan “supports voluntary regional marine planning.”
Connor added that he “look[s] forward to working with Secretary Jewell and the team at Interior, to implementing the NOP, and to better understanding this country’s challenges and opportunities relative to ocean resources across all major sectors and uses.” He also stated that he would “adhere to the Department’s commitment to implementing the President’s Plan,” and that he would “work in partnership with the Committee to ensure that any actions taken by the bureaus within Interior are supported by sound science and transparency in our decision-making.”
Comment Period Reopened for New Tank Vessel Oil Transfer Regulations
The Coast Guard recently announced that, in light of public comments requesting an extension, it is reopening the public comment period regarding consideration of new measures that could be implemented to reduce the risk of oil spills in oil transfer operations from or to a tank vessel. The promulgation of such regulations is required under the Coast Guard Authorization Act of 2010.
The Coast Guard initially announced its solicitation for comments in October, with comments originally due by November 22, 2013.
Comments are now due by Monday, December 30, 2013.
Commerce Department Seeks Comments on Proposed MPA Ecosystem Services Survey
The Commerce Department has announced that it is seeking public comments on its intention to seek Office of Management and Budget approval for the National Ocean Service to collect socio-economic data from residents of local counties and stakeholder groups that use the Mission-Aransas National Estuarine Research Reserve (Mission-Aransas NERR) and Olympic Coast National Marine Sanctuary (Olympic Coast NMS) for recreational, cultural, and other reasons. The project is titled “Social Values of Ecosystem Services in Marine Protected Areas for Management Decision-Making.”
The Mission-Aransas NERR is comprised of over 185,000 acres of contiguous wetland, terrestrial, and marine environments located on state lands in Texas, while the Olympic Coast NMS is located off the outer coast of the Olympic Peninsula offshore Washington State and includes 2,408 square nautical miles of marine waters.
The announcement states that the information being sought is needed “to support the individual NERR and NMS site’s conservation and management goals, to strengthen and improve resource management decision-making, to increase capacity, and to extend education and outreach efforts.”
The Commerce Department estimates that the proposed information collection would involve 1,415 respondents and 472 total burden hours. Comments and recommendations are due by December 30, 2013.
Shipping Coordinating Committee to Hold Public Meeting
The U.S. State Department recently announced that the Shipping Coordinating Committee will hold an open meeting on Thursday, January 9, 2014 in Arlington, VA to prepare for the first Session of the International Maritime Organization’s (IMO) Subcommittee on Ship Design and Construction to be held in London on January 20-24, 2014.
According to the announcement, agenda items for the Jan. 20-24 meeting include the development of a mandatory Code for ships operating in polar waters, classification of offshore industry vessels and consideration of the need for a non-mandatory Code for offshore construction support vessels, and a report to the Maritime Safety Committee.
For additional information, contact Brent Greenfield with HBW Resources. His contact information is below.
2211 Norfolk Street, #410
Houston, TX 77098
If you have any general questions, please give me a call anytime. Previous reports and other updates can be found at the new HBW Resources Intelligence Tab at: https://hbwresources.com/intelligence/. Hope you have a great day.
1666 K Street, NW, Suite 500
Washington, DC 20006