PUBLIC IC POLICY Y TRENDS S & DEVELOP LOPMENTS MENTS FOR OFFSHORE OF SHORE OI OIL & G & GAS AS EX EXPLORATIO ORATION Inters rsta tate e Oil and Gas Compact ct Commiss ssion, , Midyear r Issues Summit May 23-25, 2010, Lexingto ton, , Kentucky ky E NERGY RGY N ORTH ORTH A ME MERIC RICA, A, LL LLC
MAJOR JOR FACTORS TORS IMPAC ACTI TING G OF OFFSH SHORE RE OI OIL & GAS www.energ rgy-nort rtha hamer merica ca.co .com • Federal l Offshore re Program 2010 -2015 & 2012 – 2017 2017 • Response e to Oil Spill: l: Regulato tory ry and Legislative ive • Moratorium rium on Drilling • National l Ocean Policy • Climat ate Change/Oc /Ocea ean Acidification
WHERE WE WERE www.energ rgy-nort rtha hamer merica ca.co .com • Trend d for opening new areas • Publi lic c support rt at new highs and Congress s allowed d moratori rium um to expire • Robust st external l outreach h campaign garnered more than 350,000 comments ts in support t of offshore e energy • Indus ustr try y & coalition efforts accounted ed for more than 71% of the 500,000+ 500,000+ com commen ents received received by by MMS S • Strong efforts by CEA were responsi sible ble for such a significant t positive e response se – almost four times the response e from the 2007-2012 2012 comment t period
OB OBAMA MA ADMINISTRATI INISTRATION N OC OCS POL OLIC ICY: Y: What t the Ad Admi ministr istrati ation is saying ing www.energ rgy-nort rtha hamer merica ca.co .com • DEVELOP: OP: We are opening new areas for offshore re oil and gas developmen pment t as part of a comprehens ensive ive energy plan for the country. y. • EXPLO LORE: E: We are expandi ding g offshore re oil and gas explorat ation and scientific analysi sis to gather the informati tion we need to develop p resources in the right places and the right ways. • PROTEC ECT: We are protecting special places that are simply y not appropri riate te for oil and gas drilling. g.
BASICS CS OF DRAFT T PROPO POSED SED PLAN www.energ rgy-nort rtha hamer merica ca.co .com • WGOM, , CGOM, , and EGOM Beyond d 125 miles of Florida • Recently tly Clarified ed to apply y to islands s like the Florida Keys • Mid-Atla Atlanti ntic/ c/Sout South h At Atlantic tic (Will be studies s : May not offer leases) • Beaufo fort, t, Chukc kchi hi (Will be studies: s: May not offer more leases or develo lopme pment) t) • North Atlantic c Off-Li Limi mits ts (40 percent t of Atlanti tic Resource e Base) • North Al Aleutian n Basin (Bristol l Bay) Off-Li Limi mits ts (Prove ven n discoveries) es) • Pacific Coast Off-Li Limi mits ts (proven – larger than EGOM) • Blue Areas Listed as “Low Resource Potential” – but we no idea what resources s exist there • Bottom m Line: Areas Taken off the Table have more oil and gas potential al than what they say was added
DRAFT FT PROPO POSED SED PLAN www.energ rgy-nort rtha hamer merica ca.co .com
DRAFT FT PROPO POSED SED PLAN AL ALASKA SKA AR AREAS www.energ rgy-nort rtha hamer merica ca.co .com
CHRONO ONOLO LOGY Y OF OCS 5-YEAR PLAN EVENTS TS www.energ rgy-nort rtha hamer merica ca.co .com • March 31, 2010: 2007-2012 Preliminary ry Revised d Program (PRP) & 2012-2017 Scoping Notice for Draft EIS released • May 3, 2010: 2007-2012 PRP comments ts due; final leasing program to be announce ced d sometime thereafte fter • June 30, 2010: 2012-2017 EIS comments s due • June – July, y, 2010: Public c meetings s held on scope of EIS • Spring 2011: 2012-2017 Proposed d Program Schedule ule and Draft EIS expected ed • Early y 2012: 2012-2017 Proposed d Final Program and Final EIS expecte ted, d, followed d by final decision no sooner than 60 days later • July y 1, 2012: 2012-2017 Program takes effect
GULF F OF MEXI XICO SPILL RESPONSE NSE WHAT AT IS BEING NG DON ONE www.energ rgy-nort rtha hamer merica ca.co .com • DHS-DOI DOI investigat ation launched hed • Sec. Salazar directed d to complet ete e report by May 28 on additional l safety measures es for offshore re operations • Moratorium rium: : AP APDs for any new offshore drilling ng activity y not to be considere red d until safety y review complete ted d • DOI establishe shed d OCS Safety y Oversight ht Board • MMS complete ted d inspecti tions s of all 30 deepwate ter r drilling rigs. No significant t issues • CEQ/D /DOI OI announce ce review of NEPA procedure ures s for MMS. • National l Ac Academy y of Engineerin ring analysis s and technical l investigat ation • Executiv utive e Order established shed the National Commissi sion on the BP Deepwater Horizon Oil Spill and Offsho hore re Drilling • Sec. Salazar issued order restructur cturing g MMS into three separate te entities • BP will invest up to $500 million to research h program on incident
GULF F OF MEXI XICO SPILL RESPONSE NSE WHAT AT COU OULD LD BE DON ONE www.energ rgy-nort rtha hamer merica ca.co .com • Increas ase e in liability ty cap from current t limit set forth in the Oil Pollut ution on Act of 1990 (e.g. from $75M to $10B) • Extend d statuto tory ry time currently tly allowed for DOI to act on explora rati tion plans (e.g. from 30 days for existing leases, as set forth rth in OCS Lands Act, to 90 days, and when necessary ry even further er for the complet etion on of environmen menta tal/s l/saf afety ty reviews. . Potential l breach of contrac ract. t. Mobil v. US. US. • Increas ase e in excise tax that oil companies s pay to finance Oil Spill l Liability ty Trust Fund (e.g. from 8 cents/ba barr rrel l to 9 cents/bar barre rel l starting this year, , and rising to 10 cents/ba barr rrel el starting in 2017). Tax extende der r language could raise to 32 cents • Raise statutor ory y expendi ditur ture limitation from Oil Spill l Liability ty Trust Fund (e.g. from $1B to $1.5B) and increase the cap on natural l resource damage assessments ents and claims (e.g. from $500M to $750M) • Additi tional l DOI inspecti tions s and enforcemen ment t studies s and activities • Adopti tion of a new national l ocean policy that further er restricts ts and regulate tes s offshore energy developmen pment. t. (To be discussed ed later ter)
WHITE E HOUSE E COMMISSION MISSION www.energ rgy-nort rtha hamer merica ca.co .com • Co Co-cha haire red d by former Florida Governor or and Senator r Bob Graham m & former EPA A Ad Administr trato tor r William Reilly • Charged with examining relevant facts/circumstances concerning causes of… Deepwater Horizon spill, developing options for pre venti ting and mitigating g the impact of future re oil spills resulti ting from offshore e drilling, g, includi ding options involvi ving: • “(1) improvements to federal laws, regulations, and industry practices…that would ensure effective oversight, monitoring, and re response se capabilities; s; prote tect ct health th and safety ty, occupati tional l health lth and safety ty, and the environme ronment t and natural l resour urces; ces; and addres ress s affecte cted d communities ties; and • (2) 2) organizati tional l or othe her reforms rms of fede deral ral agenci cies or processe sses s necessa ssary ry to ensure re such improveme vements ts are implemente ted and m aintained” • Made up of 7 members; sitting government employees & elected officials not eligible to serve; Commission’s work subject to Fe deral l Adviso sory ry Committee ttee Act • Final report to be issued within 6 months of Commission’s first meeting; Commission terminates 60 days after submission of fi nal report
MMS REORGAN GANIZAT IZATION ON www.energ rgy-nort rtha hamer merica ca.co .com • May 19, 2010: Sec. Salazar issued Secretari arial al Order restruc uctur turing ng the Minerals ls Management nt Service into 3 separate entities with independ ndent nt missions: s: • Bureau reau of Ocean Energy rgy Management-- -- “responsible for the sustainable development of the Outer Continental Shelf’s conventional an d renewab wable le energy rgy resources, including resource evaluation, planning, and other activities related to leasing” • Bureau reau of Safety ty and Environmental tal Enforc rcement-- -- “responsible for ensuring comprehensive oversight, safety, and environmental pro tecti ction in all offsho shore re energy activities”. Both report to Asst. Secy for Land & Minerals ls Management • Offi fice ce of Natur ural l Resour urce ce Reve venue ue-- -- “responsible for the royalty and revenue management function including the collection and di stribu buti tion of revenue, ue, auditing and compliance, and asset management”. Reports to Asst. Secy. For Policy, Management & Budget • Imple lemen menta tati tion schedule le to be develo lope ped d within 30 days of Order
QUESTIONS? STIONS? www.energ rgy-nort rtha hamer merica ca.co .com Ja Jack k Be Belche cher Partne tner, r, Energy gy Nor orth th America ica 832 832-248 248-2914 14 jack.bel k.belche cher@ r@energy nergy-nort northam hamerica. rica.com om
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