EnergyFactor By ExxonMobil | Pespectives has a new home

A missed opportunity on increasing access to U.S. energy supplies

In finalizing its proposed offshore oil and gas leasing program covering the years 2012-2017 recently, the Obama administration announced it was advancing the president’s “directive to continue to expand safe and responsible production of America’s important domestic resources.”

But a closer look at the plan’s details makes one wonder where the expansion is.

The federal government’s proposed five-year leasing plan keeps the vast majority of U.S. offshore areas off-limits for energy development, including the Atlantic Ocean, Pacific Ocean, nearly all of the Eastern Gulf of Mexico and most Alaskan waters. The plan stands in stark contrast to a previous proposal that would have opened up parts of the Atlantic Coast for responsible energy development, and offered the possibility that the Eastern Gulf of Mexico would be opened as well.

The Obama administration later withdrew support for that idea, and now about 85 percent of U.S. offshore areas remain off-limits.

This is in spite of the fact that leaders in several states affected by the ban have expressed interest in opening their waters to energy development.

Senator Lindsey Graham recently revealed a bill that would give South Carolina the option to allow for oil and natural gas exploration from 10 to 50 miles offshore. In proposing his plan, Graham talked about the importance of the “revenue stream for the state of South Carolina” that would accompany oil and gas development.

South Carolina’s plan is similar to one that received bipartisan support in Virginia last year. There, Senators Jim Webb and Mark Warner proposed a bill to allow oil and natural gas exploration and development off the Virginia coast. In 2010, Virginia was poised to become the first state on the Atlantic Coast to allow such development, a plan that the administration halted after the Deepwater Horizon incident. Despite the fact that offshore development returned in the Western and Central Gulf of Mexico, Virginia’s offshore ban has yet to be lifted.

Virginia Governor Bob McDonnell recently talked about this decision in a Wall Street Journal op-ed, saying that when the federal government negated the Virginia lease sale, it also negated the prospect of thousands of new jobs and significant new revenues for the state and local governments. “There is no reason, other than political calculation, that we couldn’t have been home to the East Coast’s first offshore oil and natural gas development,” McDonnell said.

McDonnell went on to say that “Energy is the lifeblood of our nation’s economic growth.”

U.S. energy development supports job creation, both directly in the energy industry and in related goods and service industries. In fact, nine million American jobs can be traced back to the energy industry, according to a recent study.  In a post earlier this week I noted another report suggesting that opening up areas currently off-limits to energy production could create an additional half-million new jobs by 2025.

The industry also generates tax revenues for local, state and federal governments struggling to balance budgets. And, all the while, this activity produces the oil and natural gas that fuels our homes, transportation, businesses and industries.

That’s why the announcement of the administration’s proposed final five-year plan for oil and natural gas leasing represents a lost opportunity. Only when policymakers in Washington recognize the importance of greater access to U.S. energy supplies will our country realize the full benefits of oil and natural gas development from coast to coast.


  • Worth a deeper look...