San Antonio Express-News, January 27, 2015

Obama drilling plan leaves both industry, environmentalists fuming
By Jennifer A. Dlouhy, Washington Bureau

WASHINGTON — The Obama administration tried to balance the interests of both oil industry and environmentalists Tuesday when it unveiled a plan to consider offshore drilling along four southern Atlantic states while blocking the activity in nearly 10 million acres of the Arctic Ocean. But the proposal only served to alienate both constituencies.

For the oil industry — already reeling under collapsing crude prices — it was more bad news, coming on the heels of the administration’s decision to block drilling in roughly 12 million acres of the Arctic National Wildlife Refuge and ahead of a host of new federal regulations.

“We’re not seeing a lot of activity on efforts to open the horizons” for more oil and gas development, said Dan Naatz, vice president of federal resources with the Independent Petroleum Association of America. “Instead, it’s this onslaught.”

Oil and gas companies are bracing for new mandates governing hydraulic fracturing on federal lands, rules cracking down on the sector’s methane emissions, stepped-up standards for emergency devices used to safeguard offshore wells and endangered species listings. On Sunday, the White House announced its plan to block drilling in the Arctic refuge’s coastal plain, a 1.5-million-acre area long prized by the industry for its oil and gas potential.

“It’s been a difficult sequencing of announcements coming from the administration, in terms of seeing decision after decision that does not reflect a positive environment for the oil and gas industry,” said Erik Milito, upstream director for the American Petroleum Institute.

The moves Tuesday reflect President Barack Obama’s approach to regulating the domestic oil boom: Trying not to throttle a major economic driver in the United States while appeasing environmentalists worried about climate change.

Developed by the Interior Department’s Bureau of Ocean Energy Management, the draft proposes 14 sales of offshore drilling leases: 10 in the Gulf of Mexico, three off the coast of Alaska and one for territory along the south and mid-Atlantic states. No auctions are contemplated in Pacific waters.

The draft plan only defines the broad contours of the final sale schedule. From here, the lease plan can only get smaller, whittled down by regulators in response to public comments. Any areas left out of the draft proposed program are out for good.

Environmentalists cast the administration’s proposal as a step backward, further wedding the United States to oil and gas development when the country should be investing heavily in cleaner-burning alternatives.

“This takes us in exactly the wrong direction,” said Peter Lehner, executive director of the Natural Resources Defense Council. “It would expose the Eastern Seaboard, much of the Atlantic and most of the Arctic to the hazards of offshore drilling.”

Miyoko Sakashita, oceans program director at the Center for Biological Diversity, said the 2010 Deepwater Horizon disaster and blunders during Shell’s 2012 Arctic drilling program “should have been wake-up calls to the Obama administration.”

“Instead,” Sakashita said, “the president appears to be sleepwalking his way right into the next big offshore-oil nightmare.”

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