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Obama admin rules out Arctic leases in 2017-2022 OCS plan

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WASHINGTON, D.C. — U.S. Secretary of the Interior Sally Jewell and Bureau of Ocean Energy Management (BOEM) Director Abigail Hopper have released the final plan to guide future energy development for the nation’s Outer Continental Shelf (OCS) for 2017-2022.

The Proposed Final Program offers 11 potential lease sales in four planning areas — 10 sales in the portions of three Gulf of Mexico Program Areas that are not under moratorium and one sale off the coast of Alaska in the Cook Inlet Program Area.

After receiving extensive public input and analyzing the best available scientific data, the Beaufort and Chukchi Seas planning areas in the Arctic are not included in the Proposed Final Program. The Proposed Final Program makes available areas containing approximately 70% of the economically recoverable resources in the OCS.

“The plan focuses lease sales in the best places -– those with the highest resource potential, lowest conflict, and established infrastructure -– and removes regions that are simply not right to lease,” said Secretary Jewell. “Given the unique and challenging Arctic environment and industry’s declining interest in the area, forgoing lease sales in the Arctic is the right path forward.”

Release of the Proposed Final Program, along with the accompanying Final Programmatic Environmental Impact Statement, is one of the final steps in a multi-year process that was initiated in June 2014 to develop a final offshore leasing program for 2017-2022.

The OCS Lands Act requires the Secretary of the Interior to prepare a Five-Year Program that includes a schedule of potential oil and gas lease sales and indicates the size, timing and location of proposed leasing determined to best meet national energy needs, while addressing a range of economic, environmental and social considerations.

The Secretary may approve the final 2017-2022 program after a minimum of 60 days; the plan would then become effective on July 1, 2017.

Regional approach

The Proposed Final Program continues a tailored leasing strategy set forth in the current 2012-2017 Program that takes into account regional differences and information from each planning area.

Gulf of Mexico:

Consistent with the Proposed Program, the Proposed Final Program includes 10 sales in the Gulf of Mexico — one of the most productive basins in the world — where resource potential and industry interest are high, and oil and gas infrastructure is well established.

To provide greater flexibility for investment in the Gulf, the program adopts a new approach to lease sales by offering two annual lease sales for the entire Western, Central, and Eastern Gulf of Mexico acreage not under moratorium. This is a shift from the traditional approach of one sale per year in each of the Western Gulf and the Central Gulf and periodic sales in the Eastern Gulf.

Alaska:

The Proposed Final Program does not include any lease sales in the Chukchi or Beaufort Seas. Based on consideration of the best available science and significant public input, the Department’s analysis identified significant risks to sensitive marine resources and communities from potential new leasing in the Arctic. Moreover, due to the high costs associated with exploration and development in the Arctic and the foreseeable low projected oil prices environment, demonstrated industry interest in new leasing currently is low.

The Proposed Final Program includes one sale in the northern portion of the Cook Inlet Planning Area. Cook Inlet is a mature basin with a long history of oil and gas development in state waters, where existing infrastructure could support new activity. The design of this program area balances the protection of endangered species by taking into account the beluga whale and the northern sea otter critical habitat, with the availability for leasing of areas with the greatest industry interest and existence of oil and gas resources.

Atlantic:

Areas off the Atlantic coast are not included in this program. After an extensive public input process, the lease sale that was proposed in the Draft Proposed Program in the Mid- and South Atlantic area was removed during the earlier Proposed Program stage of the process due to current market dynamics, strong local opposition and conflicts with competing commercial and military ocean uses.

Pacific:

Areas off the Pacific coast are not included in the 2017-2022 Program, in line with the earlier Draft Proposed Program and the Proposed Program. The decision not to include the Pacific in the 2017-2022 Program is consistent with the long-standing position of the Pacific coast states in opposition to oil and gas development off their coasts.

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