The U.S. will continue to be the only major producing country with an Atlantic coastline that is not able to explore for oil and gas off its Atlantic shores.

The oil and gas industry’s quest to open the Atlantic Basin to seismic gathering and offshore drilling was squashed by the Obama administration, despite support from four coastal state governors and a petition with 180,000 signatures that was delivered to the Interior Department March 14.

Concerns raised by coastal communities, the Defense Department and NASA, among others, were enough to outweigh the potential for exploration that has led to discoveries in other parts of the Atlantic such as offshore Africa, Brazil and Canada.

The proposed program for the Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022 would have included at least one sale in the Mid-Atlantic and South Atlantic planning areas in 2021, offering acreage at least 50 miles offshore Virginia, North Carolina, South Carolina and Georgia.

However, for now at least it is not to be.

“When you factor in conflicts with commercial and national defense activity, market conditions and oppositions from local communities, it simply does not make sense to move forward with the Atlantic lease sale in the near future,” Secretary of the Interior Sally Jewell said during a media call March 15.

She called the 2017-2022 proposal balanced, saying it protects sensitive resources, supports safe and responsible development of energy resources and focuses on areas with the greatest resource potential, industry interest and infrastructure.

According to the draft proposed program released in January 2015, some data suggested parts of the Atlantic planning areas could have significant oil and gas resource potential. The extent of this potential is not known, however, because current geological and geophysical data is more than 35 years old.

The American Petroleum Institute (API), which pushed for oil and gas drilling in the Atlantic, said the administration’s decision “shuns American consumers, national security” and weakens the nation’s energy future.

“The decision appeases extremists who seek to stop oil and natural gas production which would increase the cost of energy for American consumers and close the door for years to creating new jobs, new investments and boosting energy security,” said Jack Gerard, president and CEO of the API. “This is not how you harness America’s economic and diplomatic potential.

“While benefiting from energy policy choices made more than a decade ago, this inconsistent policy leads to unraveling the nation’s ability to be a global energy leader and has left the future of American energy and national security vulnerable for the geopolitical challenges that lie ahead,” Gerard said.

Randall Luthi, president of the National Ocean Industries Association (NOIA), called the move short-sighted.

“The good news is that there are still lease sales planned in the Gulf of Mexico and Alaskan Arctic. The bad news is the disappointing and mind-boggling removal of Atlantic Lease Sale 260 from the 2017-2022 OCS Oil and Gas Leasing Proposed Program,” he said.

“This is a short-sighted political decision of an administration influenced by the radical and extreme minority devoted to keeping fossil fuels in the ground. The removal is not based upon science or good energy policy, and will certainly inhibit the economic opportunities and energy security of our country.”

The proposed five-year lease program includes:

  • Gulf of Mexico: Ten lease sales. Two lease sales would be held annually in the western, central and part of the eastern GoM that is not part of the current Congressional moratorium;
  • Pacific: No lease sales, unchanged from the draft proposed program and consistent with previous moves given opposition from California, Oregon and Washington to oil and gas development offshore and
  • Alaska: Three lease sales, one each in the Cook Inlet, the Beaufort Sea and Chukchi Sea. Jewell noted that during public meetings concerning the environmental impact statement, several North Slope communities pointed out areas that might not be appropriate for leasing, and those areas were marked as potential conflict areas between oil and gas activity and ecological resources and subsistence activities.

“We look forward to hearing from the public and interested stakeholders before we finalize the program that can both meet our nation’s energy needs and protect our key natural resources,” Jewell said.

Following the proposed program’s publication in the Federal Register, the public will have 90 days to comment on the proposal and the draft programmatic environmental impact statement before the program is finalized and lease sales begin.

The process includes public hearings in the areas impacted.

More than 1 million comments were received on the issue of drilling off the Carolinas, Virginia and Georgia. Among the concerns that factored into removal of the Atlantic region from the proposal were issues raised by NASA, due to potential activity near its Wallops Flight Facility, and the Defense Department.

“Their missions have continued to increase over the past five years. The assessment that was provided to us now reflects that,” Abigail Hopper, director of the Bureau of Ocean Energy Management, said of the Defense Department.

“Public input is paramount to our planning process, and the proposal benefits from extensive stakeholder engagement,” Hopper said in a prepared statement. “We will seek additional input from citizens, industry, other federal and state agencies and elected officials as we develop the proposed final program.”

The Interior Department may still remove an area before the program is finalized, but no areas can be added to the program without restarting the process. Plus, the secretary has the authority to cancel or delay a lease sale, or narrow the geographic scope of a proposed leasing area.

However, “a future administration could redo the five-year program and put it back in,” Jewell said when asked whether the proposal can be reversed to include the Atlantic.

But she added that the process has worked as it should.

“We have been at this current five-year program for about three years. It’s a laborious process. It takes a lot of public input. That is what it’s designed to do. In addition, Congress could take action and force a lease sale.”

Concerning the decision to remove the Atlantic after having proposed drilling there, Jewell said “This is not a big reversal. Basically, this is exactly how the process is intended to work.”

Velda Addison can be reached at vaddison@hartenergy.com, and Leslie Haines can be reached at lhaines@hartenergy.com.