At a recent energy industry forum, Interior Secretary Ken Salazar left few clues as to what the Administration would decide regarding the Department’s Five-Year Leasing Program for 2007-2012 and the draft 2010-2015 plan proposed by the outgoing Bush Administration that would greatly expand offshore leasing for oil and gas exploration and production. As Salazar put it, “We’ll try to bring all those together in the next – very soon.” Salazar has also been relatively quiet about the 2011 Atlantic lease sale that was a part of the Bush Administration’s proposed 2007-2012 offshore energy development plan. The Secretary recently announced the beginning of a 45-day comment period in late January for the development of an Atlantic exploration environmental impact statement, but it’s unclear whether the Administration will allow the lease sale offshore Virginia to proceed. Even if the sale is given the green light, MMS officials recently indicated that procedurally, the earliest the area could be leased is 2012. Virginia’s new Governor, Bob McDonnell, has publicly called for Secretary Salazar to hold the lease sale scheduled in the current 5-year program. And last Wednesday, McDonnell renewed his appeal in the official Republican response to the President’s State of the Union address.
On an interesting note, Stephen Power reported in his Wall Street Journal Washington Wire blog on February 4 that public comments in favor of offshore drilling outnumber those against drilling by two to one. In his report, he says the director of the Minerals Management Service, Liz Birnbaum, advised Secretary Salazar on ways to avoid acknowledging the support for the drilling plan. A spokesman for Birnbaum stated in reaction that the issue isn’t so cut-and-dried, and that MMS’s analysis was “still under way.” It remains to be seen what kind of reaction this report will have.
Finally, industry also awaits the Department’s environmental sensitivity analysis required by the D.C. Circuit Court of Appeals in Center for Biological Diversity v. Interior. Shortly after its release, the 2007-2012 program was challenged by the Center for Biological Diversity. The D.C. Circuit vacated and remanded the Five-Year Program (later limiting its decision to Alaska) and identified certain analytical defects in the Five-Year Program pertaining to the environmental sensitivity of different areas of the OCS. The Department is in the process of completing the court-ordered analysis, determining whether to exclude from leasing any proposed area, and weighing the potential for environmental damage and the discovery of oil and gas. Interior expects to complete its analysis and release a proposal by February 26. We would expect the Department to seek public comment on the proposal (which could have significant impacts on industry).