Nothing tilts public opinion more than high gasoline prices, or worse yet shortages! Hence the 1975 legislation establishing the SPR, the massive SPR drawdown in 2022, and this year’s withdrawals.
Looking back to the halcyon days of the US offshore program, it was the gas lines in the 1970s that drove the remarkable and rather unlikely growth in the program during the Carter Administration (1977-1981). A few highlights from those four years:
15 lease sales including 3 offshore Alaska, 3 in the Atlantic, and 1 offshore California
Drilling activity in all 4 regions: GoM, Pacific, Alaska, and Atlantic
North, Mid, and South Atlantic District offices for permitting and inspections
5300 well starts including 97 in water depths > 1000′
314 new platforms including Cognac, the world’s first platform in > 1000′ of water
Perhaps unthinkable today, the Governor of Massachusetts from 1979-1983, Ed King, was a strong supporter of offshore drilling. Absent that support, the exploratory drilling on Georges Bank would probably have never occurred. /s/ Nostalgic Old Man 😉
BOEM completed the area identification (outlined in diagram above) for marine minerals offshore American Samoa. The full decision memorandum is attached.
In response to BOEM’s Request for Information, Impossible Metals confirmed their interest in the identified area. Several other companies also expressed interest. The Governor and a number of other parties submitted interesting comments, which are summarized on p. 2 of the attachment.
The first two steps in a process that could ultimately lead to a mineral lease sale have thus been completed. Steps 3 to 6 remain. (See below)
Request for Information and Interest (RFI) published in the Federal Register. complete
Identification of Areas to be considered for leasing. complete
Environmental Analysis for the lease sale.
Proposed Leasing Notice Published in the Federal Register.
The proposed lease area, located within the U.S. outer continental shelf (OCS) off the Mid-Atlantic coast, is highly prospective for heavy mineral sands rich in titanium, zirconium, rare earth elements (REEs), and phosphate.
This would be a shelf dredging operation rather than the deepwater module collection being proposed for the Pacific.
heavy minerals prospectsheavy minerals sand resources
As expected, the White House announced the largest ever permanent ban on offshore oil and gas leasing in the US, and to the best of my knowledge, anywhere in the world.
The sheer magnitude of the ban makes other such withdrawals appear modest by comparison. It’s amazing how bold Presidents (and their handlers) become when they are about to leave office.
The permanent ban includes:
The entire Atlantic Outer Continental Shelf (OCS): While there are no current oil and gas leases in the US Atlantic, the region is highly prospective and could contain more than 20 billion barrels of oil equivalent (BOE).
The Eastern Gulf of Mexico: This is the OCS area that many petroleum geologists find most attractive. The best prospects are >100 miles from shore which minimizes coastal risks, and the high natural gas potential aligns with Florida legislation supporting the use of gas for power generation.
The entire Pacific OCS: While the resources are substantial, their loss has been a foregone conclusion for 25 years. When you can’t even decommission old platforms or restore production on important existing facilities (i.e. the Santa Ynez Unit), how can you possibly expect to issue new leases?
The remainder of the OCS offshore western Alaska. The wishes of the majority of Alaskans, who support offshore exploration and development, have been largely ignored for decades.
President-elect Trump has vowed to reverse President Biden’s leasing ban, but that may not be so easy. This is not a matter of simply reversing an executive order. Sec. 12(a) of OCSLA grants the authority to withdraw lands to the President and does not provide for reversal by future Presidents. The attached NYU Law brief concludes that “a subsequent president lacks authority to restore previously withdrawn lands to the federal oil and gas leasing inventory.”
The new Administration will no doubt have a different view than that expressed in the NYU Law brief, but any reversal decision will likely be challenged in court.
Those who wrote and approved Sec. 12(a) should have had more foresight. However, 72 years ago the authors presumably thought Presidents would only use the authority to remove small, especially sensitive areas from leasing consideration, and never thought that a President would remove both of our oceans and much of the Gulf of Mexico!
Congress could of course reverse the Biden bans, but given the complexity of offshore energy issues, such legislation may be difficult to pass.
To find the sole exploratory well being drilled in the vast North American Atlantic, you have to exit “wind-only” US waters, head NE to St. John’s, NL (advancing your watch by 1.5 hours 😉), and transit another 317 miles NE to the Stena DrillMAX working for Exxon in the Orphan Basin.
The latest (8/20/2024) CNLOPB report (below) is that operations are ongoing. The well was spudded 3 months ago. That is about all they can disclose without compromising confidentiality. Even seemingly innocuous information like the current and projected well depth provides the opportunity to speculate about geologic conditions and current well activities.
The Valaris DS-17 drillship is now on location to drill the Algerich-1 well for Equinor 315 km from Mar del Plata in 1527 m of water at Block CAN 100.
Concurrently, at the opposite end of the Pan American continents, the Stena DrillMAX is closing in on Exxon’s Orphan Basin location offshore Newfoundland to drill another high potential well.
No matter what happens, Sale 220 isn’t much to get excited about, especially if the Department of Defense has its way. In light of world events and the fuel demands of our military, one would assume that DOD would be a leading advocate for offshore energy exploration and development. However, rightly or wrongly, preventing disruptions to military training and operations has always been a higher DOD priority than domestic energy production.
Oil is where you find it, not where you wish it was, where it is most convenient, or where you legislate it to be. Ditto for natural gas. We need an offshore oil and gas program that identifies the most prospective targets, provides for exploratory drilling to evaluate these targets, facilitates production, and effectively manages the safety and environmental risks. We can’t just explore the small slivers that remain after political and administrative reviews have eliminated the rest.
Like it or not, our Outer Continental Shelf lands belong to the entire nation. We need to manage these lands and the associated resources in a manner that is in the best interest of all Americans.
Comment: Kudos to Google for their leadership in financing a power grid for Atlantic wind projects. The grid should greatly improve the economics of offshore wind development. The challenge for the Google team and other wind developers will be demonstrating that they can manage complex offshore projects, protect workers, and maintain the integrity of their assets.
Bud's Offshore Energy (BOE) 