The Obama administration’s announcement that it may allow seismic studies potentially paving the way for offshore drilling along the East Coast is political posturing designed to distract voters concerned about high gasoline prices, oil industry leaders and Republican lawmakers said today.
The administration’s move “continues the president’s election-year political ploy of giving speeches and talking about drilling after having spent the first three years in office blocking, delaying and driving up the cost of producing energy in America,” said Rep. Doc Hastings, R-Wash. “The president is focused on trying to talk his way out of what he’s done, rather than taking real steps to boost American energy production.”
At issue is Interior Secretary Ken Salazar’s announcement in Norfolk, Va., this morning that the government is assessing the environmental effects of allowing seismic surveys along the mid- and south-Atlantic that could help locate hidden pockets of oil and gas. If ultimately approved, the studies by private geological research companies also could help guide decisions about where to place renewable energy projects off the coast.
The Interior Department is issuing a draft environmental impact statement that assesses the consequences of seismic research on marine life in the area. The Obama administration had planned to release a similar document in 2010, before the Gulf of Mexico oil spill.
If the draft environmental assessment is finalized after public comments and hearings, the Bureau of Ocean Energy Management could give companies permits to conduct the studies off the coasts of eight East Coast states.
Salazar said that if the geological research turned up promising results, that could open the door to offshore drilling in the area within five years, even though the administration currently has ruled out that kind of exploration before 2017. A government plan for selling offshore drilling leases from 2012 to 2017 does not include any auctions of Atlantic territory.
“If the information that is developed allows us to move forward in a quicker time frame, we can always come in with an amendment,” Salazar said. “We’re not prejudging that at this point in time. My view is … we need to develop information so we can make those wise decisions.”
Industry officials noted that under federal laws, it could take years for the government to revise the 2012-2017 leasing plan, even if federal officials decided to pursue Atlantic drilling.
Erik Milito, upstream director for the American Petroleum Institute, said the administration is repackaging old news and old plans to make it appear it is making real progress to encourage more domestic energy development.
“This is political rhetoric to make it appear the administration is doing something on gas prices, but in reality it is little more than an empty gesture,” Milito said.
Randall Luthi, the president of the National Ocean Industries Association, likened the administration’s announcement to giving the industry “a canoe with no oars, since there are no lease sales planned anywhere off the East Coast.”
If allowed to conduct seismic surveys, geological research firms would ultimately give the resulting information to the government and sell it to companies eager to analyze the data.
But Milito questioned whether seismic companies would pursue the work, given that some of their best customers — oil companies — wouldn’t be able to use it to plan offshore drilling for years, if at all.
“Without an Atlantic coast lease sale in their five-year plan, the administration’s wishful thinking on seismic research has no ultimate purpose,” Milito said. “The White House has banned lease sales in the Atlantic for at least the next five years, discouraging the investment and job creation, and ultimately production, which would make seismic exploration valuable.”
Still, at least six companies already have told the government they want to conduct seismic research along the East Coast.
“We have gotten significant expressions of interest from companies in contracting for these seismic surveys,” said Tommy Beaudreau, the director of the Bureau of Ocean Energy Management. “I am confident that, assuming the process continues on the track we anticipate, that there will be significant interest next year in conducting these surveys.”
Geological research uses seismic waves to map what lies underground or beneath the ocean floor. The shock waves — which some environmental advocates say may harm marine life — map the density of subterranean material and can gives clues about possible oil and gas.
Seismic studies also help identify geologic hazards and archaeological resources in the seabed — information useful in determining the placement of renewable energy infrastructure as well as oil and gas equipment.
The existing seismic surveys of the Atlantic coast are decades old, and in the years since, “there have been enormous technological advances,” Salazar noted.
“We do need to have seismic moving forward so we can really understand what the resource potential is,” Salazar added.
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“This will boost our presence in Northern Norway and help ensure added value from the Northern fields in the future. Ever since the merger in 2007, and the setting up of Operations North in Stjørdal, we have expressed our intention of establishing a new operational area in the North when activities and materiality justified such an industrial decision – and we are now seeing that level of activity,” states Statoil CEO Helge Lund.
Lund adds that there are also expectations of further activities in Northern Norway, owing to the increase in exploration in newly opened acreage, and in areas expected to be made available to the petroleum industry; initially the Barents Sea, and subsequently areas in the north-eastern Norwegian Sea.
Increased activity in Northern Norway
To begin with the new operational area will be responsible for the already operative Norne and Snøhvit fields, as well as for the Åsta Hansteen field, for which a decision will be taken later this year. In due course the Skrugard/Havis field will also report to the new operational area, which will be managed along similar lines and carry the same executive authority as other operational areas.
Meanwhile, it is the intention to locate the Åsta Hansteen field’s operational organisation in Harstad, the supply base in Sandnessjøen and the helicopter base in Brønnøysund. These choices have been made after consultation with the partners on the field and final decisions here will be taken in connection with the impact assessment study.
“In wishing to base the Åsta Hansteen operational organisation in Harstad, we are envisaging the possibility of synergy effects obtained from a joint localisation with the Norne field. A new operational organisation will also boost competence and enhance the specialist milieus in Harstad,” says the executive vice president for Development and Production Norway, Øystein Michelsen.
The creation of this new area of operations will entail an increase in the number of employees at the Harstad office. Once the decision on Åsta Hansteen is taken, more employees will join the new area; overall the increase is likely to amount to some 30-50 persons.
Work on the detailed planning of the new operational area in Northern Norway is now getting under way. The area will commence its operations in the course of the first half of 2013.
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