[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
EVALUATING FEDERAL OFFSHORE OIL AND GAS DEVELOPMENT ON THE OUTER
CONTINENTAL SHELF
=======================================================================
OVERSIGHT HEARING
before the
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
of the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
Wednesday, July 12, 2017
__________
Serial No. 115-14
__________
Printed for the use of the Committee on Natural Resources
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COMMITTEE ON NATURAL RESOURCES
ROB BISHOP, UT, Chairman
RAUL M. GRIJALVA, AZ, Ranking Democratic Member
Don Young, AK Grace F. Napolitano, CA
Chairman Emeritus Madeleine Z. Bordallo, GU
Louie Gohmert, TX Jim Costa, CA
Vice Chairman Gregorio Kilili Camacho Sablan,
Doug Lamborn, CO CNMI
Robert J. Wittman, VA Niki Tsongas, MA
Tom McClintock, CA Jared Huffman, CA
Stevan Pearce, NM Vice Ranking Member
Glenn Thompson, PA Alan S. Lowenthal, CA
Paul A. Gosar, AZ Donald S. Beyer, Jr., VA
Raul R. Labrador, ID Norma J. Torres, CA
Scott R. Tipton, CO Ruben Gallego, AZ
Doug LaMalfa, CA Colleen Hanabusa, HI
Jeff Denham, CA Nanette Diaz Barragan, CA
Paul Cook, CA Darren Soto, FL
Bruce Westerman, AR A. Donald McEachin, VA
Garret Graves, LA Anthony G. Brown, MD
Jody B. Hice, GA Wm. Lacy Clay, MO
Aumua Amata Coleman Radewagen, AS Vacancy
Darin LaHood, IL
Daniel Webster, FL
Jack Bergman, MI
Liz Cheney, WY
Mike Johnson, LA
Jenniffer Gonzalez-Colon, PR
Greg Gianforte, MT
Todd Ungerecht, Acting Chief of Staff
Lisa Pittman, Chief Counsel
David Watkins, Democratic Staff Director
------
SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
PAUL A. GOSAR, AZ, Chairman
ALAN S. LOWENTHAL, CA, Ranking Democratic Member
Louie Gohmert, TX Anthony G. Brown, MD
Doug Lamborn, CO Jim Costa, CA
Robert J. Wittman, VA Niki Tsongas, MA
Stevan Pearce, NM Jared Huffman, CA
Glenn Thompson, PA Donald S. Beyer, Jr., VA
Scott R. Tipton, CO Darren Soto, FL
Paul Cook, CA Nanette Diaz Barragan, CA
Vice Chairman Vacancy
Garret Graves, LA Vacancy
Jody B. Hice, GA Raul M. Grijalva, AZ, ex officio
Darin LaHood, IL
Jack Bergman, MI
Liz Cheney, WY
Rob Bishop, UT, ex officio
------
CONTENTS
----------
Page
Hearing held on Wednesday, July 12, 2017......................... 1
Statement of Members:
Gosar, Hon. Paul A., a Representative in Congress from the
State of Arizona........................................... 1
Prepared statement of.................................... 3
Lowenthal, Hon. Alan S., a Representative in Congress from
the State of California.................................... 4
Prepared statement of.................................... 6
Statement of Witnesses:
Howell, Margaret S., Founder, Stop Offshore Drilling in the
Atlantic, Pawleys Island, South Carolina................... 19
Prepared statement of.................................... 21
Knapp, James H., Ph.D., Professor, School of the Earth,
Ocean, and Environment, University of South Carolina,
Columbia, South Carolina................................... 38
Prepared statement of.................................... 40
Questions submitted for the record....................... 45
LeBlanc, Lori, Director, Offshore Committee, Louisiana Mid-
Continent Oil and Gas Association, Baton Rouge, Louisiana.. 14
Prepared statement of.................................... 16
MacGregor, Katharine, Acting Assistant Secretary, Land and
Minerals Management, U.S. Department of the Interior,
Washington, DC............................................. 7
Prepared statement of.................................... 8
Questions submitted for the record....................... 13
Whatley, Michael, Executive Vice President, Consumer Energy
Alliance, Charlotte, North Carolina........................ 28
Prepared statement of.................................... 29
Additional Materials Submitted for the Record:
Department of Defense, April 26, 2017 Letter to
Representative Matt Gaetz.................................. 77
Department of Defense, June 23, 2017 Letter to Representative
Rob Bishop................................................. 77
Department of Defense, June 27, 2017 Letter to Senator Bill
Nelson..................................................... 78
Georgia Department of Natural Resources, July 6, 2017 Letter
to Jolie Harrison, NMFS Office of Protected Resources...... 67
List of documents submitted for the record retained in the
Committee's official files................................. 81
OVERSIGHT HEARING ON EVALUATING FEDERAL OFFSHORE OIL AND GAS
DEVELOPMENT ON THE OUTER CONTINENTAL SHELF
----------
Wednesday, July 12, 2017
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources
Committee on Natural Resources
Washington, DC
----------
The Subcommittee met, pursuant to notice, at 10:02 a.m., in
room 1324, Longworth House Office Building, Hon. Paul Gosar
[Chairman of the Subcommittee] presiding.
Present: Representatives Gosar, Gohmert, Lamborn, Wittman,
Graves, Hice; Lowenthal, Brown, Tsongas, Beyer, Soto, and
Barragan.
Dr. Gosar. The Subcommittee on Energy and Mineral Resources
will come to order. I ask that there not be any kind of
disruption regarding the testimony given here today. It is
important that we respect the decorum and the rules of the
Committee and of the House, and to allow the Members and the
public to hear our proceedings.
The Subcommittee is meeting today to hear testimony on
evaluating Federal offshore oil and gas development on the
Outer Continental Shelf.
I ask unanimous consent that the gentleman from Alaska, Mr.
Young, be allowed to sit with the Subcommittee and to
participate in this hearing.
Without objection, so ordered.
Under Committee Rule 4(f), any oral opening statements at
the hearings are limited to the Chairman, the Ranking Minority
Member, and the Vice Chair. This will allow us to hear from our
witnesses sooner, and help the Members keep to their schedules.
Therefore, I ask unanimous consent that all other Members'
opening statements be made part of the hearing record, if they
are submitted to the Subcommittee Clerk by 5:00 p.m. today.
Without objection, so ordered.
STATEMENT OF HON. PAUL A. GOSAR, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF ARIZONA
Dr. Gosar. Today, the Subcommittee will discuss Federal
offshore oil and gas development on the Outer Continental
Shelf, or OCS. America's offshore industry produces 20 percent
of our Nation's domestic oil supply from the OCS, and directly
employs 300,000 Americans. In turn, this industry supports
hundreds of thousands of additional jobs through associated
industries, and serves as an important facet of coastal life.
Furthermore, it is an economic boon for those states
fortunate enough to enjoy offshore production. Through lease
bonuses, rental payments, and production royalties, states,
their coastlines, and the Federal Government are provided with
billions of dollars each year.
In fact, Federal leasing revenues for 2016 totaled $2.8
billion, with portions going to states and coastal communities.
These shared revenues are used to fund schools, coastal
restoration, and infrastructure projects throughout each
receiving state, fortifying their economies and providing jobs
across the Gulf Coast.
However, this revenue source has fallen dramatically over
the past 8 years due to the prior administration's hostile
position toward harnessing our offshore energy potential. In
fact, at $18 billion in 2008, the share brought into Federal
coffers from offshore revenues was more than six times higher
than it was in 2016, at the end of the Obama administration.
The new Administration's ``America First'' initiative seeks
to reverse the prior administration's stunted approach to
domestic energy production by requiring our government to
carefully review and reconsider all of our Nation's energy
resources, including coal, oil and gas, as well as renewable
resources.
The review of our offshore resources is being conducted by
the Bureau of Ocean Energy Management (BOEM) and the Bureau of
Safety and Environmental Enforcement (BSEE), who together
administer over 1.7 billion acres of federally submerged lands
and over 3,000 active leases. It is the duty of these agencies
to ensure the exploration, leasing, and development of offshore
hydrocarbon resources are promoted to fulfillment of the
President's energy initiative.
To determine the location and schedule of Federal offshore
lease sales, BOEM develops a 5-year leasing program that
considers geological data, public input, and environmental
impacts to determine the area and timing of offshore leasing.
The basis for planning requires an accounting of what we
actually have to work with.
In recent years, the advent of 3D seismic surveying and
data processing has provided a more dynamic and accurate
picture of geologic formations that allows policy makers, the
public, scientists, and industry to make informed and safe
decisions about leasing and drilling.
However, much of our Nation's offshore resources have not
been evaluated in more than 30 years, inhibiting our
regulators' ability to make informed leasing decisions.
In order to accurately manage our energy inventory, meet
future demand, and ensure national security, it is imperative
that we facilitate the seismic surveying permitting process in
these offshore areas, including the Atlantic and Pacific
Oceans.
Our leasing and drilling decisions should be determined by
geology, not shifting partisan politics. I applaud Secretary
Zinke's efforts to improve the seismic permitting process, and
re-evaluate the OCS leasing schedule by requiring the issuance
of a new 5-year plan that will take effect in 2019.
The new program will allow full consideration of OCS
production in Alaska, the Mid and South Atlantic, and the Gulf
of Mexico. Communities and states along the Atlantic Coast, in
particular, have long expressed interest in evaluating and
potentially developing offshore energy resources, and will have
a voice in the leasing process.
With 94 percent of the OCS precluded from responsible
development under the previous plan, the new planning process
will give previously excluded communities an opportunity to
join the leasing conversation.
According to a recent study, offshore leasing in the
Atlantic, Pacific, and Eastern Gulf of Mexico would result in
the creation of 800,000 new jobs, and $200 billion in state and
Federal revenues by 2035. Furthermore, enhanced domestic
production would improve our national security position by
decreasing our country's reliance on foreign sources of
petroleum.
For instance, in 2016, decreased production in Alaska
forced California to meet its energy demand by importing over
half its crude supply from foreign sources, such as Saudi
Arabia.
We are grateful for the opportunity to re-evaluate the
management of our Nation's offshore resources, and look forward
to a strong, respectful conversation on these issues.
[The prepared statement of Dr. Gosar follows:]
Prepared Statement of the Hon. Paul A. Gosar, Chairman, Subcommittee on
Energy and Mineral Resources
Today, the Subcommittee will discuss Federal offshore oil and gas
development on the Outer Continental Shelf, or ``OCS.'' America's
offshore industry produces 20 percent of our Nation's domestic oil
supply from the OCS, and directly employs 300,000 Americans. In turn,
this industry supports hundreds of thousands of additional jobs through
associated industries, and serves as an important facet of coastal
life.
Furthermore, it is an economic boon for those states fortunate
enough to enjoy offshore production. Through lease bonuses, rental
payments, and production royalties, states, their coastlines, and the
Federal Government are provided with billions of dollars each year. In
fact, Federal leasing revenues for 2016 totaled $2.8 billion, with
portions going to states and coastal communities. These shared revenues
are used to fund schools, coastal restoration, and infrastructure
projects throughout each receiving state, fortifying their economies
and providing jobs across the Gulf Coast.
However, this revenue source has fallen dramatically over the past
8 years due to the prior administration's hostile position toward
harnessing our offshore energy potential. In fact, at $18 billion in
2008, the share brought into Federal coffers from offshore revenues was
more than six times higher than it was in 2016 at the end of the Obama
administration.
The new Administration's ``America First'' initiative seeks to
reverse the prior administration's stunted approach to domestic energy
production by requiring our government to carefully review and
reconsider all of our Nation's energy resources, including coal, oil
and gas, as well as renewable sources. The review of our offshore
resources is being conducted by the Bureau of Ocean Energy Management,
or BOEM, and the Bureau of Safety and Environmental Enforcement, or
BSEE, who together administer over 1.7 billion acres of federally
submerged lands and over 3,000 active leases. It is the duty of these
agencies to ensure the exploration, leasing, and development of
offshore hydrocarbon resources are promoted in fulfillment of the
President's energy initiative.
To determine the location and schedule of Federal offshore lease
sales, BOEM develops a 5-year leasing plan that considers geologic
data, public input, and environmental impacts to determine the area and
timing of offshore leasing. The basis for planning requires an
accounting of what we actually have to work with. In recent years, the
advent of 3D seismic surveying and data processing has provided a more
dynamic and accurate picture of geologic formations that allows
policymakers, the public, scientists, and industry to make informed and
safe decisions about leasing and drilling. However, much of our
Nation's offshore resources have not been evaluated in over 30 years,
inhibiting our regulators' ability to make informed leasing decisions.
In order to accurately manage our energy inventory, meet future
demand, and ensure national security, it is imperative that we
facilitate the seismic surveying permitting process in these offshore
areas, including the Atlantic and Pacific Oceans. Our leasing and
drilling decisions should be determined by geology, not shifting
partisan politics, and I applaud Secretary Zinke's efforts to improve
the seismic permitting process and re-evaluate the OCS leasing schedule
by requiring the issuance of a new 5-year plan that will take effect in
2019.
The new program will allow for full consideration of OCS production
in Alaska, the Mid and South Atlantic, and the Gulf of Mexico.
Communities and states along the Atlantic Coast, in particular, have
long expressed interest in evaluating and potentially developing
offshore energy resources, and will have a voice in the leasing
process. With 94 percent of the OCS precluded from responsible
development under the previous plan, the new planning process will give
previously excluded communities an opportunity to join the leasing
conversation.
According to a recent study, offshore leasing in the Atlantic,
Pacific, and Eastern Gulf of Mexico would result in the creation of
800,000 new jobs and $200 billion in state and Federal revenues by
2035. Furthermore, enhanced domestic production would improve our
national security position by decreasing our country's reliance on
foreign sources of petroleum. For instance, in 2016, decreased
production in Alaska forced California to meet its energy demand by
importing over half its crude supply from foreign sources, such as
Saudi Arabia.
We are grateful for the opportunity to re-evaluate the management
of our Nation's offshore resources, and look forward to a strong,
respectful conversation on these issues.
______
Dr. Gosar. I now recognize the gentleman from California,
the Ranking Member, Mr. Lowenthal, for his 5 minutes.
STATEMENT OF THE HON. ALAN S. LOWENTHAL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Dr. Lowenthal. Thank you, Mr. Chairman. Before getting into
the offshore discussion, I would just like to touch on a few
things about onshore drilling.
Just 2 weeks ago, we learned that the oil and gas companies
currently hold 7,950 approved drilling permits that they have
not used--that is almost 8,000. We have also learned that the
so-called backlog of unprocessed drilling permits is the
smallest in over a decade. It is roughly 2,800.
If we take these two facts, a record high number of
permits--8,000 waiting to be used--and a historically low
number of permits waiting to be approved, and combine that with
the glut of domestic oil that is so huge that we are shipping
it to other countries almost as fast as we can get it out of
the ground, you might think that speeding up drilling permits
shouldn't be a pressing issue.
But you would be wrong, because last week Secretary Zinke
announced a new effort to try to approve permits even faster.
In doing so, he said, ``the Department of the Interior will be
a better neighbor in the new Trump administration.''
So, if you are the kind of person who likes to live next to
oil rigs, that will undoubtedly be true, because the Department
of the Interior and the Administration have made it clear they
are fully devoted to giving the oil and gas industry anything
that it wants.
But if you live near public lands and appreciate clean
water or clean air, or the ability to hunt, fish, camp, hike,
graze, or simply enjoy the scenic beauties of the land,
Interior is going to become the worst neighbor imaginable.
One of these places where clean water and scenic beauty are
particularly important is our beaches. According to the
National Oceanic and Atmospheric Administration, tourism and
recreation along our Atlantic and Pacific coasts alone employs
over 1.5 million people, and creates $71 billion in GDP. Over 1
million of those jobs are on the East Coast.
Think about that when you hear the industry-generated
fantasies of 215,000 jobs if the entire Atlantic Seaboard was
open to drilling rigs. Four times as many jobs would be at risk
from the industrial facilities that would be built along the
coast. Four times as many jobs would be at risk from the
chronic pollution and pipeline spills that are widespread with
offshore rigs of oil and gas. And four times as many jobs would
be at risk from a catastrophic blowout like the one we saw in
the Gulf of Mexico only 7 years ago.
Prior to the Deepwater Horizon, we were told time and time
again that nothing like that could ever again happen in the
United States. The industry was too smart, the technology was
too good to let something like that happen. After all, it had
been 40 years since the Santa Barbara blowout, which just
showed that we were perfectly safe.
But obviously, we were not safe. We did learn a lot from
the Deepwater Horizon, with hundreds upon hundreds of
recommendations for improving the regulation, safety, and
environmental impact of offshore drilling. Some of those
recommendations were aimed at Congress. We have not acted.
But many of those recommendations were taken to heart by
the Obama administration, which toughened the rules on
drilling, required real safety plans from companies, and
established an agency devoted to regulating safety offshore.
Now, with all that new regulation, what happened? Offshore
oil production is now at an all-time high and climbing. In the
first half of the year, nearly 400 offshore permits were
approved, and only 23 are pending.
But now the Trump administration wants to take us backward.
Currently, they are reviewing all--and I repeat, all--the new
offshore policies with an eye not toward what makes us safer--
that is not what they are looking at--but what makes things
easier and more profitable for ExxonMobil, Shell, and BP.
And now they have decided to restart a new 5-year leasing
process, throwing away 2\1/2\ years of planning and tens of
millions of dollars of effort, ignoring the overwhelming
bipartisan opposition from hundreds of thousands of people up
and down the Atlantic and Pacific Coasts, and eliminating the
protections that President Obama provided for the fragile
Arctic.
Lifting regulations on the oil and gas industry, while
giving them more of our oceans to play with is a dangerous
combination. I fear it would just be a matter of time before we
see a repeat of that horrible day 7 years ago.
Thank you, and I yield back my time.
[The prepared statement of Dr. Lowenthal follows:]
Prepared Statement of the Hon. Alan S. Lowenthal, Ranking Member,
Subcommittee on Energy and Mineral Resources
Thank you, Mr. Chairman.
Before getting into the offshore discussion, I'd like to just touch
on a few things about onshore drilling.
Two weeks ago, we learned that oil and gas companies currently hold
7,950 approved drilling permits that they have not used. We also
learned that the so-called ``backlog'' of unprocessed drilling permits
is the smallest in over a decade--roughly 2,800.
Take these two facts--a record high 8,000 permits waiting to be
used, and a historically low number of permits waiting to be approved--
and combine that with a glut of domestic oil so huge we're shipping it
to other countries almost as fast as we can get it out of the ground,
and you might think that speeding up drilling permit approvals
shouldn't be a pressing issue.
But you'd be wrong.
Because last week Secretary Zinke announced a new effort to try to
approve permits even faster. In doing so he said, ``The Department of
the Interior will be a better neighbor in the new Trump
administration.''
If you're the kind of person who likes to live next to oil rigs,
that will undoubtedly be true. Because the Department of the Interior
and this Administration have made it clear they are fully devoted to
giving the oil and gas industry anything it wants. But if you live near
public lands and appreciate clean water, or clean air, or the ability
to hunt, fish, camp, hike, graze, or simply enjoy the scenic beauty of
those lands, Interior is going to become the worst neighbor imaginable.
One of those places where clean water and scenic beauty are
particularly important is our beaches. According to the National
Oceanic and Atmospheric Administration, tourism and recreation along
our Atlantic and Pacific coasts alone employs over 1.5 million people
and creates $71 billion in GDP. Over 1 million of those jobs are on the
East Coast. Think about that when you hear the industry-generated
fantasies of 215,000 jobs if the entire Atlantic seaboard was open to
drilling rigs.
Four times as many jobs would be at risk from the industrial
facilities that would be built along the coast. Four times as many jobs
would be at risk from the chronic pollution and pipeline spills that
are widespread with offshore oil and gas. And four times as many jobs
would be at risk from a catastrophic blowout like the one we saw in the
Gulf of Mexico only 7 years ago.
Prior to the Deepwater Horizon, we were told time and time again
that nothing like that could ever happen in the United States. The
industry was too smart, and the technology too good, to ever let
something like that happen. After all, it had been 40 years since the
Santa Barbara blowout, which just showed that we were perfectly safe.
But we obviously were not safe.
We did learn a lot from the Deepwater Horizon, with hundreds upon
hundreds of recommendations for improving the regulation, safety, and
environmental impact of offshore drilling. Some of the recommendations
were aimed at Congress. We have not acted.
But many of those recommendations were taken to heart by the Obama
administration, which toughened the rules on drilling, required real
safety plans from companies, and established an agency devoted to
regulating safety offshore.
And with all that new regulation, what happened? Offshore oil
production is now at an all-time high, and climbing. And in the first
half of the year, nearly 400 offshore permits were approved, and only
23 are pending.
But now the Trump administration wants to take us backwards.
Currently they are reviewing all the new offshore policies with an eye
not toward what makes us safer, but what makes things easier and more
profitable for ExxonMobil, Shell, and BP.
And now they have decided to restart a new 5-year leasing process,
throwing away 2\1/2\ years and tens of millions of dollars of effort,
ignoring the overwhelming bipartisan opposition from hundreds of
thousands of people up and down the Atlantic and Pacific coasts, and
eliminating the protections that President Obama provided for the
fragile Arctic.
Lifting regulations on the oil and gas industry, while giving them
more of our oceans to play with is a dangerous combination, and I fear
it would just be a matter of time before we see a repeat of that
horrible day 7 years ago.
I yield back the balance of my time.
______
Dr. Gosar. I thank the gentleman. I am now going to
introduce our guests.
First we have Ms. Katharine MacGregor, Acting Assistant
Secretary, Land and Mineral Management, U.S. Department of the
Interior--Round two, right? And Ms. Lori LeBlanc, Director,
Offshore Committee, Louisiana Mid-Continent Oil and Gas
Association; Ms. Margaret S. Howell, Founder, Stop Offshore
Drilling in the Atlantic; Mr. Michael Whatley, Executive Vice
President, Consumer Energy Alliance; and Dr. James H. Knapp,
Professor, School of the Earth, Ocean, and Environment,
University of South Carolina.
Let me remind the witnesses that under our Committee Rules,
they must limit their oral statements to 5 minutes, but their
entire statement will appear in the hearing record.
Our microphones are not automatic. Once you start, you have
to push the little button to make sure you are speaking. You
are going to see a little flag up in front of you. For the
first 4 minutes it is going to be green. Then it will turn to
yellow. When you see the red, I am going to start cutting you
off, so wrap it up.
I am going to now start with Ms. MacGregor.
Thanks for coming back. You are recognized.
STATEMENT OF KATHARINE MacGREGOR, ACTING ASSISTANT SECRETARY,
LAND AND MINERALS MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR,
WASHINGTON, DC
Ms. MacGregor. Chairman Gosar, Ranking Member Lowenthal,
and members of the Subcommittee, thank you for, once again, the
opportunity to appear before you today to discuss the
Department of the Interior's offshore oil and gas programs. My
name is Kate MacGregor, and I am currently serving as the
Acting Assistant Secretary for Land and Minerals Management.
The Department, through the Bureau of Ocean Energy
Management (BOEM) and the Bureau of Safety and Environmental
Enforcement (BSEE) plays a central role in advancing the
Administration's America First energy agenda and Secretary
Zinke's goal of achieving American energy dominance.
BOEM manages the Nation's energy and mineral resources on
1.7 billion acres of the Outer Continental Shelf. BSEE is
charged with regulatory oversight and enforcement to ensure
safe and responsible exploration, development, and production.
The Administration's America First energy agenda aims to
safely harness all of our Nation's energy resources, including
oil and gas, coal, and renewable energy. Offshore energy
production is vital to this strategy, and currently accounts
for 18 percent of our domestic oil production, 4 percent of our
domestic natural gas production, billions of dollars in revenue
for the Treasury, states, and conservation programs, and it
supports over 300,000 jobs nationwide. Over 85 oil and gas
companies operate today on the OCS, and in 2016 alone,
production from offshore leases generated $2.8 billion. In
short, the OCS is a critical economic driver for our Nation.
Last month marked the end of the 2012-2017 5-year OCS oil
and gas leasing program, comprised of 13 lease sales. Lease
sale 244, the final sale in the program, was conducted last
month in Alaska's Cook Inlet. That sale received bids on 14
tracks for a total of more than $3 million. This is the first
time in 20 years that Federal leases in the Cook Inlet have
received bids. We are now operating under the 2017-2022 5-year
offshore oil and gas leasing program. This program consists of
11 lease sales, nearly all of which are in the Gulf of Mexico,
with the exception of one in the Cook Inlet.
Since the start of this Administration, several ongoing
efforts have been underway to ensure that OCS oil and gas
resources are made available to help meet our Nation's energy
needs. I want to touch on just a few examples of the work the
Department and its bureaus are doing to advance this agenda
under Secretary Zinke's leadership.
First, in March, Secretary Zinke signed an order
implementing the review of agency actions directed by the
President's Executive Order entitled, ``Promoting Energy
Independence and Economic Growth.'' This order directed
agencies to review all actions that potentially burden domestic
energy production. BSEE and BOEM are undertaking a thorough
review of their rulemakings in accordance with this directive.
Second, in May, Secretary Zinke signed Secretarial Order
3350, which implements the President's America First offshore
energy Executive Order. This order enhances opportunities for
energy exploration, leasing, and development; directs a review
of specific regulatory actions; and promotes collaboration with
other Federal agencies whose actions may impact offshore energy
development.
Chief among the action items called for in this order is
the development of a new 5-year program with full consideration
given to areas omitted in the current program. This includes
areas in Alaska and the Mid and South Atlantic.
The leasing program is critical to future development
because the life cycle of an offshore well can span several
years. In many cases, production today is the result of leases
issued decades ago. By opening the planning process for a new
5-year program, we will examine long-term opportunities to
enhance responsible offshore energy development in the United
States. We will ensure public input throughout the process, and
maintain our ultimate commitment to safety.
Dominance is defined as exerting authority or commanding
from a superior position. Dominance does not stem from
eliminating areas from future production. Instead, the United
States can maintain its position as a global energy leader by
harnessing energy resources on public lands, and doing so
safely and responsibly. Under this Administration, offshore
energy production will continue to support our Nation's
position of energy superiority to meet national need, promote
job growth, and keep energy prices low for American families
and businesses.
As we carry out the Administration's goal of energy
dominance, we look forward to working with you and members of
this Committee in our efforts. Thank you for the opportunity to
testify today, and I will be happy to answer any questions.
[The prepared statement of Ms. MacGregor follows:]
Prepared Statement of Katharine S. MacGregor, Acting Assistant
Secretary, Land and Minerals Management, U.S. Department of the
Interior
Chairman Gosar, Ranking Member Lowenthal, and members of the
Subcommittee, I am pleased to join you today to discuss the Department
of the Interior's (Department) offshore programs carried out by the
Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and
Environmental Enforcement (BSEE), and our efforts to advance these
programs to help secure American energy dominance, create jobs, lower
costs for working Americans and build a strong economy, freeing us from
dependence on foreign oil. Through these programs, the Department is
providing access to our energy resources offshore, while adhering to
all safety and environmental laws and regulations.
The Outer Continental Shelf (OCS) is a vital component of our
Nation's energy economy. It accounts for 18 percent of domestic oil
production, 4 percent of domestic natural gas production, billions of
dollars in annual revenue for the Treasury, states, and conservation
programs, and supports more than 300,000 jobs. OCS activities are a key
aspect of the Trump administration's America First Energy Agenda and
Secretary Zinke's goal of maintaining our Nation's energy dominance by
advancing domestic energy production, generating revenue, and creating
and sustaining jobs throughout our country.
background
The Department manages and regulates the development of America's
natural resources, including oil, gas, mineral, and renewable energy
sources offshore. American energy resources create hundreds of
thousands of jobs and generate significant revenue both to the U.S.
Treasury and states. Through natural resource policies designed to
foster growth and facilitate local input, the Department provides
opportunities for new jobs and revenue for Federal, state and local
governments.
BOEM manages the Nation's energy and mineral resources on 1.7
billion acres of Federal submerged lands known as the Outer Continental
Shelf (OCS). BOEM is responsible for managing development of these
resources through offshore leasing, resource evaluation, review and
administration of oil and gas exploration and development plans,
renewable energy development, economic analysis, National Environmental
Policy Act analysis, and environmental studies. BOEM promotes energy
security, environmental protection and economic development through
responsible, science-informed management of offshore conventional and
renewable energy and mineral resources. BOEM carries out these
responsibilities while ensuring that American taxpayers receive fair
market value from OCS leases, balancing the energy and mineral needs of
the Nation with the protection of the human, marine, and coastal
environments.
BSEE was established to protect life, property, and the environment
by ensuring the safe and responsible exploration, development, and
production of the Nation's offshore energy resources. BSEE fulfills
this mission through integrated preparedness, prevention, and
compliance activities. The Bureau's diverse team includes highly
skilled engineers, geoscientists, geologists, environmental
specialists, inspectors, and preparedness analysts. As the
Administration works to support and promote domestic energy production,
BSEE is taking the necessary steps to provide effective oversight of
oil and natural gas development on the OCS, which reflects a careful
balance among resource development, production goals, worker safety,
and environmental protection. BSEE also consults with BOEM on these
issues with respect to renewable energy.
BSEE actively works to promote the efficient and responsible
production of America's offshore energy resources, pursuing this
objective through a comprehensive program of permitting, regulations,
compliance monitoring and enforcement, technical assessments,
inspections, and incident investigations. As a steward of the Nation's
OCS oil, gas, and mineral resources, BSEE protects Federal royalty
interests as well as energy users by ensuring that oil and gas
production methods maximize recovery from underground reservoirs.
The Administration's America First Energy Plan is an ``all-of-the-
above'' plan that includes oil and gas, coal, and renewable resources
and the OCS is integral to the development of important energy
resources. A key principle of this plan is that America's free markets
will help determine where and when energy development on the OCS is
feasible. To begin implementing this strategy, the President signed an
Executive Order on April 28, 2017 which directs the Secretary to take
regulatory steps to encourage energy exploration and production. In
furtherance of this directive and in order to respond to our Nation's
energy needs, the Department is engaged in a variety of ongoing efforts
to support domestic offshore production while meeting our stewardship
and environmental responsibilities. These efforts include predictable
leasing; reducing barriers to accessing energy resources on the OCS;
reviewing and streamlining leasing and permitting processes to serve
its customers and the public more efficiently and effectively;
regulatory reform; and improving coordination among key stakeholders,
including state and local governments, other Federal agencies, and the
public.
outer continental shelf contribution to energy independence
Oil and gas production from the OCS is a significant part of the
America First Energy Plan and is a critical component in the Nation's
energy supply. As of July 2017, there were more than 3,000 active oil
and gas leases on more than 16 million OCS acres. In 2016, OCS leases
provided 582 million barrels of oil, which accounted for 72 percent of
all oil production from Federal lands, and 18 percent of total U.S.
production of oil. During that same period, 1.3 trillion cubic feet of
natural gas was produced in Federal waters, representing 27 percent of
all natural gas produced on Federal lands and 4 percent of total U.S.
natural gas production.
The OCS is also a key revenue source for the Federal Government,
providing a significant non-tax source of funding to Federal as well as
state treasuries, which serves as an important economic driver for
local communities across the country. More than 85 oil and gas
companies operate on Federal submerged lands. There are more than 2,100
offshore production platforms and approximately 26,800 miles of
pipelines transporting oil and gas to shore. In Fiscal Year 2016, BOEM
and BSEE offshore oil and gas activities supported a total of more than
300,000 jobs across the country, and billions in value added economic
output. In 2016 alone, production from leases on the Federal OCS
generated $2.8 billion dollars in leasing revenue.
I would now like to provide you with information on the most recent
activities in these programs.
the 2012-2017 and 2017-2022 ocs oil and gas leasing programs
Last month marked the end of the 2012-2017 Five-Year OCS Oil and
Gas Leasing Program. During that period, BOEM held 13 lease sales. Not
including Lease Sale 244, BOEM awarded leases on over 1,350 tracts for
a total of over $3.3 billion in bonus bids. Lease Sale 244, the final
sale in the program, was conducted on June 21 in the Cook Inlet
Planning Area in Alaska. That sale received bids on 14 tracts for a
total of $3,034,815 in high bids and the bid evaluation process is
currently being conducted. This is the first time in 20 years that OCS
tracts in the Cook Inlet have received bids.
Last month also marked the beginning of the 2017-2022 Five-Year
Offshore Oil and Gas Leasing Program. The Program schedules 10 region-
wide sales comprised of unleased acreage in the Western, Central, and
Eastern Gulf, not subject to moratoria or otherwise unavailable. This
includes one sale during 2017 and 2022 and two sales during 2018, 2019,
2020, and 2021. This region-wide sale approach provides greater
flexibility for industry to respond to changing market conditions,
including Mexican energy reforms. The first lease sale in this program
is scheduled for August 2017 in the Gulf of Mexico and will offer
approximately 13,725 tracts covering about 73 million acres. The
Program also offers one sale off the coast of Alaska in Cook Inlet.
lease continuation through operations rule
On June 9, 2017, BSEE issued a final rule entitled, ``Oil and Gas
and Sulphur Operations on the Outer Continental Shelf--Lease
Continuation Through Operations,'' which amended sections 250.171 and
250.180 of title 30 of the Code of Federal Regulations. This rule,
issued in response to provisions of the Consolidated Appropriations Act
of 2017 (P.L. 115-31), extends from 180 days to 1 year the time a lease
in its extended term is allowed to continue between periods of
production, drilling or well-reworking operations on that lease, before
the lease would expire. These additional months mean companies doing
business on the OCS will have more planning flexibility, which will
help them be more cost efficient, create more jobs, and maximize the
economic benefit for the entire nation.
secretary's order 3349
On March 29, 2017, Secretary Zinke signed Secretary's Order 3349,
which implements the review of agency actions directed by an Executive
Order signed by the President on March 28, 2017, and entitled
``Promoting Energy Independence and Economic Growth.'' It also directs
a re-examination of the mitigation policies and practices across the
Department of the Interior in order to better balance conservation
strategies and policies with the equally legitimate need to create jobs
for hard-working American families.
BSEE and BOEM are undertaking a thorough review of their
rulemakings in accordance with this directive. In addition, on June 22,
2017, the Secretary requested public input on how the Department of the
Interior can improve implementation of regulatory reform initiatives
and policies and identify regulations for repeal, replacement, or
modification. (82 Federal Register 28429; https://
www.Federalregister.gov/documents/2017/06/22/2017-13062/regulatory-
reform) The Secretary's request also provides an overview of the
Department's approach for implementing the regulatory reform initiative
to alleviate unnecessary burdens placed on the American people, which
was established by President Trump in Executive Order (E.O.) 13777,
``Enforcing the Regulatory Reform Agenda.''
secretary's order 3350
On May 1, 2017, Secretary Zinke signed Secretary's Order 3350,
which implements the President's Executive Order 13795 entitled,
``Implementing an America-First Offshore Energy Strategy'' (Executive
Order). Secretary's Order 3350 enhances opportunities for energy
exploration, leasing, and development on the OCS; establishes
regulatory certainty for OCS activities; and enhances conservation
stewardship, providing jobs, energy security, and revenue for the
American people. BOEM and BSEE were tasked, as discussed more fully
below, with the following action items:
Initiation of the National Program Process
This action item calls for the development of a new Five-Year Outer
Continental Shelf Oil and Gas Leasing Program, with full consideration
given to leasing the OCS offshore Alaska, Mid-Atlantic, South Atlantic,
and the Gulf of Mexico, in accordance with the provisions of the Outer
Continental Shelf Lands Act (OCSLA) as directed by the Executive Order.
On July 3, BOEM initiated development by publishing in the Federal
Register a Request for Information (RFI) seeking comments from a
multitude of stakeholders, including states, local and tribal
governments, Federal agencies, energy and non-energy industries, public
interest groups, and the general public. The information will be used
in the analyses that the Secretary must consider in making his first of
three decisions on potential sales, the Draft Proposed Program. Under
the last administration, 94 percent of the OCS was off-limits to
responsible development, despite interest from state and local
governments and industry leaders. The Trump administration is dedicated
to promoting access to our offshore energy resources in order to
promote energy dominance, create more job opportunities, and keep
energy prices low for American families and businesses. By opening the
planning process for a new Five-Year Program, we will achieve these
goals while also ensuring the public has a say in how our natural
resources are used.
Cooperation with the National Marine Fisheries Service on Seismic
Survey Permitting Oversight
S.O. 3350 directs BOEM, in cooperation with the National Marine
Fisheries Service (NMFS), to establish a plan to expedite consideration
of Incidental Take Authorization requests, including Incidental
Harassment Authorizations (IHA) and Letters of Authorization, that may
be needed for seismic survey permits and other OCS activities; and to
develop and implement a streamlined permitting approach for privately-
funded seismic data research and collection aimed at expeditiously
determining the offshore energy resource potential of the United
States.
On May 11, 2017, Departmental leadership met with their National
Oceanic and Atmospheric Administration (NOAA)/NMFS counterparts to
begin to establish a plan to expedite consideration of Marine Mammal
Protection Act authorization requests, as well as associated Endangered
Species Act requests, and to develop and implement a streamlined
permitting approach for privately funded seismic surveys. All parties
agreed that NMFS and the Department, through the U.S. Fish and Wildlife
Service, would convene an interagency working group to carry out these
tasks. BOEM remains steadfast in its goals to implement its legal
requirements expeditiously and effectively. BOEM will participate in
the interagency working group as soon as it is established, identifying
issues and potential solutions that would most help to streamline the
permitting process for seismic surveys.
Consideration of Atlantic Seismic Permitting Applications
This directive calls for the expedited consideration of appealed,
new, or resubmitted seismic permitting applications for the Atlantic.
As we begin the important job of deciding which areas will be offered
for exploration and development in a new Five-Year Program, information
on what resources are potentially available is critical. For this
reason, we are moving forward with evaluation of the seismic permit
applications for the Mid- and South Atlantic. The current data for
these areas was collected 30 to 40 years ago. There have been many
advances in technology since then, and we need to have a better
understanding of the resources we manage for the Nation.
Following the previous administration's January 2017 denials of six
pending G&G permit applications, and the subsequent Notices of Appeal
by the applicants, BOEM's Acting Director issued a memorandum on May
10, 2017, seeking a remand by the Interior Board of Appeals of the
January 2017 denials so that the applications could be processed. Upon
request by BOEM, the Interior Board of Land Appeals remanded the
appealed denials to BOEM on May 15, 2017, and BOEM notified the
companies that the denials had been rescinded.
BOEM has resumed its evaluation of the previously denied
applications. The NMFS Draft Proposed IHAs were published in the
Federal Register on June 6, 2017, initiating a 30-day public comment
period that has since been extended by NOAA to July 21, 2017. The draft
IHAs will be updated to reflect any new information resulting from the
public review. BOEM will then coordinate with NMFS on mitigation
issues.
Review of Notice to Lessees (NTL) No. 2016-N01
The order directs BOEM to promptly complete the previously
announced review of NTL No. 2016-N01 and to produce a report describing
the review and options for revising or rescinding the NTL. This NTL
modified BOEM's financial assurance program, which is designed to
ensure that OCS lessees are able to meet all of their obligations.
Currently, the timeline for implementation of the NTL has been extended
pending completion of the review by the Department. However, BOEM has
the authority to issue sole liability orders if it determines there is
a substantial risk of nonperformance of the interest holder's
decommissioning liabilities.
BOEM is finalizing its review of NTL 2016-N0l, and has obtained
significant industry feedback, principally from the Outer Continental
Shelf Advisory Board, the Offshore Operators Committee, and the
Pipeline Coalition. Final program recommendations from BOEM to senior
management are forthcoming. Consistent with Secretary's Order 3350,
BOEM does not intend to implement the NTL prior to completing its
review.
Re-Examination of the ``Offshore Air Quality Control, Reporting, And
Compliance'' Proposed Rule
This action item requires that BOEM immediately cease all
activities to promulgate the ``Offshore Air Quality Control, Reporting,
and Compliance'' Proposed Rule published in the Federal Register on
April 5, 2016, and all other rules and guidance published pursuant
thereto. BOEM is reviewing options for revising or withdrawing the
proposed rule.
Review of the Well Control and Blowout Preventer Rule (BOP)
This action item directs BSEE to ``Promptly review the final rule
on `Oil and Gas and Sulfur Operations in the Outer Continental Shelf--
Blowout Preventer Systems and Well Control' for consistency with the
policy set forth in section 2 of the Executive Order as well as all
policies, rules, guidance, instructions, notices, or other implementing
actions that have been adopted or are in the process of being developed
relating thereto.''
The final Well Control Rule (WCR) was issued more than 12 months
ago and is being implemented by industry while some provisions of the
rule have staggered implementation dates. Based on feedback from
industry and other parties since the final rule was issued, BSEE has
identified potential modifications to the rule and subsequent related
rulemakings. While internal review of this regulation is ongoing, any
change would require adherence to the rulemaking process, which would
provide opportunities for public comment on any proposed changes.
Review of Final Rule on Exploratory Drilling in the Arctic
This action item calls for the prompt review by both BOEM and BSEE
of the final rule entitled ``Oil and Gas and Sulfur Operations on the
Outer Continental Shelf--Requirements for Exploratory Drilling on the
Arctic Outer Continental Shelf,'' published in the Federal Register on
July 15, 2016. In accordance with Section 4c of Secretary's Order 3350,
the President's Executive Order on Promoting Energy Independence and
Economic Growth, signed on March 28, 2017, as well as OMB guidance on
Regulatory Review, internal review of this regulation is ongoing. Any
change would require adherence to the rulemaking process, which would
provide opportunities for public comment on any proposed changes.
BOEM and BSEE are currently on track to comply with all action
items tasked to them by Secretary's Order 3350.
renewable energy program
BOEM has 13 commercial offshore wind energy leases in Federal
waters, totaling over 1.2 million acres on the OCS. In fact, BOEM's
Offshore Renewables Program now has wind energy leases off every state
from Massachusetts to North Carolina, forming the foundation for an
offshore wind industry in the Atlantic.
In the Atlantic, BOEM has held seven competitive offshore wind
lease sales, generating $67.9 million in high bids. In December 2016,
after soliciting input from all stakeholders, particularly the fishing
community, BOEM conducted an auction for 79,350 acres offshore New
York, resulting in a winning bid of $42,469,725 for the lease area.
This auction, which yielded the highest revenue of any domestic
offshore renewable energy auction to date, underscores the growing
market demand for renewable energy among our coastal communities. In
March 2017, BOEM auctioned 122,405 acres offshore Kitty Hawk, North
Carolina. The provisional winner of the lease sale is Avangrid
Renewables, LLC, with a bid of over $9 million.
In the Pacific, BOEM continues to work closely with states and
other stakeholders to facilitate offshore renewable energy development
on the OCS off California, Oregon, and Hawaii. In the Gulf of Mexico,
we are seeing interest by some oil companies to possibly use renewable
energy resources to provide or supplement power for offshore
operations, as well as interest from oil and gas-related manufacturing,
fabrication and service industries to expand into the renewable energy
sector.
marine minerals program
BOEM is the only Federal agency authorized under the OCSLA to
convey OCS sand resources for shore protection, beach, or wetland
restoration projects undertaken by a Federal, state or local
government. In exercising this authority, BOEM may issue a negotiated
non-competitive lease for the use of OCS sand to a qualifying entity in
response to a request.
BOEM has invested more than $40 million over the past 20 years to
identify non-energy resources on the OCS, conduct world-class
scientific research, and lease OCS resources to coastal communities and
other Federal agencies in need. Information from environmental research
and resource identification has informed environmental assessment and
leasing decisions concerning the use of OCS sand resources in beach
nourishment and coastal restoration. To date, BOEM has authorized the
conveyance of over 139 million cubic yards of sand in eight states
resulting in the restoration of 303 miles of coastline. Notable
projects include significant beach restoration in Brevard, Duval, and
Pinellas Counties in Florida, and coastal restoration along the coasts
of New Jersey and New York in the aftermath of Hurricane Sandy. Major
restoration efforts have also occurred along the coastline of
Louisiana.
conclusion
Mr. Chairman, thank you again for the opportunity to be here today
to discuss the Department, BOEM and BSEE's efforts to execute our
missions to safely and responsibly reduce our dependence on foreign oil
and create jobs through the development of these important energy
resources.
I will be glad to answer any questions that you or members of the
Subcommittee may have.
______
Questions Submitted for the Record to Ms. Katharine MacGregor, Acting
Assistant Secretary, Land and Minerals Management, U.S. Department of
the Interior
Ms. MacGregor did not submit responses to the Committee by the
appropriate deadline for inclusion in the printed record.
Questions Submitted by Rep. Gosar
Question 1. Does BOEM consider impacts to microorganisms (or
plankton) when completing Programmatic Environmental Impact Statements
for OCS G&G activities?
Question 2. What is BOEM's process for considering and assessing
new scientific studies and how does BOEM incorporate new scientific
findings into its decision-making process?
Question 3. What improvements have been made since the Deepwater
Horizon spill to prevent future spills?
Questions Submitted by Rep. Lowenthal
Question 1. Please provide the full analysis performed by BOEM to
support the reduction of royalty rates for shallow-water leases in Gulf
of Mexico Lease Sale 249.
Question 2. Please explain the specific way that the Department of
the Interior is calculating benefits for regulations and policies being
reviewed for their potential burden on the development of energy
resources.
Question 3. Both you and the Secretary have said that the
Department is fully committed to all energy sources, and does not favor
oil and gas over renewables. However, the proposed FY 2018 budget for
renewables is cut in both BOEM and BLM while oil, gas, and coal
programs would receive budget increases. When asked about the cut to
the BOEM renewable energy program during the FY 2018 budget hearing,
Secretary Zinke said, ``With regard to wind, the budget matches the
anticipated demand.''
3a. Please provide the analysis showing the expected drop in
offshore wind demand that justifies the proposed cut to the BOEM
renewable energy program.
3b. Please provide any analysis that was done to show the expected
increase in demand in Federal coal leasing that justifies the proposed
80 percent increase in the FY 2018 BLM coal program budget.
3c. The FY 2018 BOEM Budget Justification indicates that the cut to
the BOEM renewable energy program would significantly hurt the program,
and drive a decrease in demand for offshore wind. It reads that the cut
will, ``slow the advancement of offshore renewable energy commercial
leasing activities on both the Atlantic and Pacific coasts,'' and that,
``although stakeholder meetings will still occur, BOEM may not be able
to provide a trained facilitator at all of these meetings, which could
impact their effectiveness.'' How are these statements consistent with
the idea that the renewable budget is being cut due to an expected
decrease in demand that is separate from the impact of the budget cut
itself?
3d. The Secretary also indicated his desire to hold better
stakeholder outreach regarding offshore wind, particularly with
fishermen. Given that the proposed BOEM FY 2018 budget would, according
to BOEM, make stakeholder outreach meetings less effective, how is the
proposed cut consistent with Secretary Zinke's stated desire to improve
outreach to fishermen?
Question 4. Please identify each remaining deepwater lease issued
inclusively between 1996 and 2000 under the provisions of the OCS Deep
Water Royalty Relief Act for which royalties were not paid in FY 2016,
the volumes of royalty-free deepwater (> 200m) oil and gas produced in
FY 2016 broken down by the amount of production of oil and gas
attributable to each company that owns all or part of each royalty-free
deepwater lease, and the amount of royalty-free volumes of oil and gas
remaining to be produced from each of the remaining leases. What is the
total amount of royalties that have been foregone under the terms of
the OCS Deep Water Royalty Relief Act?
______
Dr. Gosar. Thank you. The Chair now recognizes Ms. LeBlanc
for her 5 minutes.
STATEMENT OF LORI LeBLANC, DIRECTOR, OFFSHORE COMMITTEE,
LOUISIANA MID-CONTINENT OIL AND GAS ASSOCIATION, BATON ROUGE,
LOUISIANA
Ms. LeBlanc. Good morning, Mr. Chairman, Ranking Member
Lowenthal, and members of the Committee. I appreciate the
opportunity to participate in today's hearing on oil and gas
development opportunities of the OCS. My name is Lori LeBlanc.
I currently serve as the Director of the Offshore Committee for
the Louisiana Mid-Continent Oil and Gas Association (LMCOGA),
and I live and work in Lafourche Parish, Louisiana.
LMCOGA is Louisiana's longest-standing trade association,
exclusively representing all aspects of the oil and gas
industry onshore and offshore. First, I would like to take a
moment to recognize Majority Whip Scalise, who has been a
champion for Louisiana's offshore energy industry, and we
continue to keep him in our prayers as he is going through this
recovery process. I also thank Congressman Graves for his
leadership on our offshore energy issues.
As the Committee looks at opportunities for increasing
offshore access for oil and gas development, I urge you to look
to Louisiana and our long history in successfully producing
America's energy.
I want to make two primary points in today's testimony.
First, Louisiana is a leader in producing American energy,
and we do it in such a way that we balance energy production
with environmental stewardship. Louisiana has demonstrated that
not only are we an energy state, but we are also the
sportsman's paradise.
My second point is that the OCS revenue sharing is critical
to Louisiana's environmental stewardship, and it should be
preserved, enhanced, and included in any future proposals for
OCS energy development activities.
To best understand the potential of our Nation's offshore
energy development, it is useful to take a look at the scope of
energy production that takes place in the Gulf. Since the first
offshore well was drilled 70 years ago, the Gulf has produced
90 percent of domestic U.S. crude oil from all OCS territories,
with approximately 20 percent of our Nation's oil and gas
currently coming from the Gulf.
Louisiana has a long and distinguished history of producing
the energy to fuel America. In 2016, about 18 percent of our
crude oil and 4.5 percent of our natural gas production
occurred in Federal waters off of our coast. Louisiana is first
in revenues generated offshore, with an estimated $5 to $14
billion going to the Federal Treasury each year.
In 2014, in fact, Federal revenues from energy production
in the Gulf were $7.4 billion. This revenue stream is one of
the largest sources of annual deposits to the national
Treasury.
The total economic impact of Gulf energy is immense. It
creates jobs in every state in the United States, with more
than 650,000 jobs nationwide estimated to be linked to Gulf
energy activity. We are an example of how a robust offshore oil
and gas industry can provide significant benefits to our local
state and national economies. A 2014 economic study indicates
the offshore industry has a $4 billion annual impact to
Louisiana.
A robust offshore oil and gas industry also results in a
boom of many other industries. In fact, Louisiana has one of
the top port systems in the country: 5 of the top 15 largest
ports in the United States are located in Louisiana, with Port
Fourchon considered to be our Nation's energy port.
The state of Louisiana does all this while also boasting
some of America's most precious landscapes and habitats.
Louisiana has demonstrated firsthand how to balance the
development of our Nation's oil and gas resources off our coast
and still maintain a robust hunting, fishing, and wildlife
industry, and a world-renowned tourist destination.
In Louisiana, our commercial fishing represents nearly 30
percent of the commercial fishing landings of the Continental
United States. Our wetlands provide habitat for over 5 million
migratory water fowl, and wildlife recreation has amounted to a
$3 billion industry supporting over 25,000 jobs.
In fact, in 2016, Louisiana experienced a record-breaking
year for tourism, with 46.7 million visitors and spending of
nearly $17 billion.
Energy production in the Gulf is also critical to restoring
Louisiana's coast and protecting our coastal communities. As a
result of the 2006 Gulf of Mexico Energy Security Act,
investments by Louisiana's oil and gas industry in the Gulf
will soon fund coastal restoration and protection projects.
In Louisiana, revenue-sharing is dedicated for funding the
state's coastal restoration and protection initiatives. In
fact, in 2006, Louisiana voters passed a constitutional
amendment to dedicate 100 percent of our GOMESA revenues to the
restoring and protecting of Louisiana's coast. Our coastal land
loss is a crisis, and the state has a $50 billion master plan
over a 50-year period to restore our coast. GOMESA funding is
critical to those efforts. And I will add primary
responsibility of our coastal land loss is due to the fact that
we put levees on the Mississippi River, and that sediment is no
longer replenishing our coastal wetlands.
Finally, I just want to tell you that I live in south
Louisiana. It is a place where we live, where we work, and
where we play. It is a working coast where we feed and fuel
America. I am proud to call it my home, and we are proud to
produce America's energy.
Thank you.
[The prepared statement of Ms. LeBlanc follows:]
Prepared Statement of Lori LeBlanc, Director, Offshore Committee,
Louisiana Mid-Continent Oil and Gas Association
Good morning Chairman Gosar, Ranking Member Lowenthal and members
of the Committee. I appreciate the opportunity to participate in
today's hearing on oil and gas development opportunities on the Outer
Continental Shelf (OCS). My name is Lori LeBlanc, I am the Director of
the Offshore Committee for the Louisiana Mid-Continent Oil and Gas
Association (LMOGA). In addition to serving as the Director of LMOGA's
Offshore Committee, I also serve as the Executive Director of the Gulf
Economic Survival Team and previously served as the Deputy Secretary of
Louisiana Department of Natural Resources as well as the Executive
Director of a non-profit coastal restoration organization, Restore or
Retreat.
LMOGA is Louisiana's longest standing trade association,
exclusively representing all aspects of the oil and gas industry
onshore and offshore, including exploration, production, mid-stream
activities, pipeline, refining and marketing.
I would like to start off by saluting the Administration and the
Department of the Interior for taking a hard and thorough look at the
abundance of opportunities that comprise our country's very promising
energy future.
I want to make two primary points in today's testimony. First,
Louisiana is a leader in producing American Energy and we do it in such
a way that we balance energy production with environmental stewardship.
Because of our responsible management of our abundant natural
resources, Louisiana has demonstrated that we are an Energy State as
well as the Sportsman's Paradise. Louisiana's success in effectively
achieving that balance is a shining example of what the United States
can achieve in other Federal offshore areas. My second point is that
OCS revenue sharing is critical to Louisiana's environmental
stewardship and it should be preserved, enhanced and included in any
future proposals for OCS energy development activities.
To best understand the potential of our Nation's offshore energy
development, it is useful to take a look at the scope of energy
production that takes place in the Gulf of Mexico and recognize that a
successful OCS industry requires a blend of major integrated oil
companies and smaller independents working both competitively and
cooperatively where the market forces determine what works best. A
successful OCS industry also requires a Federal regulatory regime in
which operators are provided a high degree of clarity, predictability
and certainty as they invest hundreds of millions of dollars in
developing and producing our Nation's energy.
Since the first offshore well was drilled 70 years ago, the Gulf
has produced 90 percent of domestic U.S. crude oil from all of the OCS
territories, with approximately 20 percent of our Nation's oil and gas
currently coming from the Gulf of Mexico. In 2016, offshore production
of crude oil in Federal waters totaled more than 594 million barrels,
which represented over 18 percent of total U.S. crude oil production,
according to the Energy Information Administration (EIA). In 2016, EIA
data shows that there was 1.2 trillion cubic feet of offshore natural
gas production or a little less than 4.5 percent of total marketed
domestic gas production.
U.S. crude oil production in the Federal Gulf of Mexico (GOM) set
an annual high of 1.6 million barrels per day (b/d) in 2016, surpassing
the previous high set in 2009 by 44,000 b/d. In January 2017, GOM crude
oil production increased for the fourth consecutive month, reaching 1.7
million b/d. On an annual basis, oil production in the GOM is expected
to continue increasing through 2018, based on forecasts in EIA's latest
Short-Term Energy Outlook.
The total economic impact of Gulf energy is immense. It creates
jobs in every state in the United States, with more than 650,000 jobs
nationwide estimated to be linked to Gulf energy activity, along with
tens of thousands here in Louisiana alone. In fact, the Department of
the Interior has cited that over $1 trillion in net economic value is
associated with the development of the Gulf of Mexico over the past 20
years and the Federal Government has collected over $150 billion in
revenues during that time. In 2014, for example, Federal revenues from
energy production in the Gulf of Mexico were $7.4 billion. This revenue
stream is one of the largest sources of annual deposits to the national
Treasury.
As the Committee explores opportunities for increasing offshore
access for oil and gas development and expanding the tremendous
economic benefits of offshore production, I urge you to look to
Louisiana and our long, distinguished history of successfully producing
the Energy to fuel America.
The first land-based oil well was drilled in Louisiana in 1858, the
first ``offshore'' well was drilled in state inland waters in 1911, and
the first successful well drilled out of sight of land was in 1947,
bringing with it a whole new era of oil and gas exploration and
production for Louisiana and our Nation. Deepwater Gulf of Mexico
operations now account for 80 percent of all Gulf oil produced.
Louisiana proudly serves as the gateway to the Gulf, the front door
to the boundless energy potential just miles off our coast and
thousands of feet under the water's surface. It is a job that
Louisianans have done proudly and it has become a significant part of
our livelihood and our culture, just as much as our bountiful hunting
and fishing, our wildlife watching, our ecotourism, and our unique food
and music.
The state of Louisiana is first in OCS oil production and second in
OCS natural gas production. Louisiana is first in revenues generated
offshore with an estimated $5-$14 billion deposited into the Federal
Treasury each year from activity off of the Louisiana coast.
Louisiana is an example of how a robust offshore oil and gas
industry can provide significant benefits to our local, state and
national economies. A 2014 study by economist Dr. Loren C. Scott,
indicates the offshore industry has a $44 billion annual impact to
Louisiana and a $70 billion annual impact when you factor in the
related pipeline and refining activities.
In 2013, energy jobs and earnings existed in all 64 Louisiana
parishes with 17 parishes employing more than 1,000 workers in the
energy industry. In Lafayette Parish alone, the energy sector accounted
for more than 16,000 direct jobs and more than $1 billion in salaries.
Where I live in Lafourche Parish, Louisiana, it is very common to have
at least one energy worker in your family or several others living in
your neighborhood--it's a way of life.
A robust offshore oil and gas industry results in a boom of many
other industries from ports, to pipelines, to refineries, to
shipbuilding to platform fabrication, to offshore transportation, to
drilling services, to catering services, to numerous specialty and
service supply companies. As stated in BOEM's Five Year Plan 2017-2022,
``An OCS oil and gas project requires equipment and supplies for
exploration, development, platform fabrication, pipeline construction,
air and water transportation, and other activities. Not only does the
industry purchase goods and services from vendors and suppliers across
the country, but its work schedules (usually a week or more offshore,
followed by the same period off duty) allow offshore workers to commute
even from thousands of miles away.''
Louisiana has one of the top port systems in the country and 5 of
the top 15 largest ports in the United States are located in Louisiana
with Port Fourchon considered to be our Nation's Energy Port. Port
Fourchon is an intermodal and supply port located on the Gulf of Mexico
near the mouth of Bayou Lafourche and is the only Louisiana port
directly on the Gulf of Mexico. More than 250 companies utilize Port
Fourchon in servicing offshore rigs in the Gulf of Mexico, carrying
equipment, supplies and personnel to offshore locations. In terms of
service, Port Fourchon's tenants provide services to more than 90
percent of all deepwater rigs in the Gulf of Mexico, and roughly 45
percent of all shallow water rigs in the Gulf. Eighty percent of all
Gulf oil now comes from deepwater Gulf of Mexico operations. In total,
Port Fourchon plays a key role in providing nearly 20 percent of the
Nation's oil supply--or one in every five barrels of oil in the
country.
The state of Louisiana does all of this while also boasting some of
America's most precious landscapes and habitats. Truly, Louisiana has
demonstrated firsthand how to balance the development of our Nation's
oil and gas resources off its coast and still maintain a robust
hunting, fishing, and wildlife industry as well as world-renowned
tourist destination. In Louisiana:
Our commercial fishermen harvest over 2 billion pounds of
fish and shellfish annually, representing nearly 30 percent
of the commercial fishing landings of the continental
United States.
Our wetlands provide habitat for over 5 million migratory
waterfowl.
Wildlife recreation, which includes hunting, fishing and
wildlife watching has amounted to a $3 billion industry,
supporting over 25,000 jobs.
In 2016, Louisiana experienced a record-breaking year for
tourism with 46.7 million visitors and spending $16.8
billion. In fact, tourism increased approximately 65
percent from 2013 to 2016.
For those of us who live in Louisiana, oil and gas is a way of life
that is intertwined with our love for hunting and fishing. The oil and
gas industry is part of our geography, our society, our economy, our
culture. The Louisiana energy industry has been a responsible community
partner for more than a century, creating more jobs than any other
industry in Louisiana, raising the standard of living and quality of
life all across Louisiana. At the same time, the industry has invested
hundreds of millions of dollars and forged partnerships with the best
scientists to develop cutting-edge efforts to protect and restore our
coastal wetlands and communities.
The people who really understand American energy are those who live
it. I'm talking about those folks on the front lines of producing
American Energy in small towns across the Gulf Coast--from Gulf Port,
to Galliano to Galveston. Nowhere else in America would you find an
annual festival called the Shrimp & Petroleum Festival, but here in
Louisiana, we celebrate these two bountiful resources each Labor Day
weekend.
Additionally, nowhere else in America is safe offshore energy
development as important as it is in Louisiana. This is a place where
we live, work and play. Every day our family, friends, and neighbors go
off to work in their hard hats and steel toe boots and we want them to
come home safely. Increased activity in the Gulf of Mexico has rested
on the implementation of strict safety and environmental standards.
Since the 2010 Deepwater Horizon incident, the oil and gas industry
has demonstrated its commitment to ensure that people and the
environment are protected during all phases of energy exploration,
development and production. A robust collaborative effort among
industry has resulted in the development of new technology and
standards for prevention, intervention and response. Industry
established the Center for Offshore Safety (COS) to foster safety
culture and share lessons learned across industry, and the Marine Well
Containment Company (MWCC) and the Helix Well Containment Group (HWCG)
to provide containment technology and response capabilities.
The reality is that not a single industry has a zero risk; however,
the industry has taken extensive measures to reduce risk. According to
the Bureau of Labor Statistics for 2015, the total recordable incident
rate for private industry was 3.0; whereas the total recordable
incident rate for support activities for oil and gas operations was
1.2. The industry is committed to a goal of zero fatalities, zero
injuries and zero incidents.
Louisiana's oil and gas industry provides significant benefits to
our Nation's energy supply, American jobs and local economies, but
energy production in the Gulf of Mexico is also critical to saving
Louisiana's coast and our coastal communities. This brings me to my
second point--how revenue sharing can help preserve Louisiana's ability
to continue to provide energy security for our Nation.
As a result of the 2006 Gulf of Mexico Energy Security Act
(GOMESA), investments by Louisiana's oil and gas industry in the Gulf
will soon fuel coastal restoration and protection projects, with
hundreds of millions of dollars from offshore drilling revenue coming
to Louisiana and three other Gulf states. It's another example of the
powerful positive impacts of offshore energy development.
GOMESA officially recognizes the efforts and contributions of
states like Louisiana in supporting America's energy supply and
generating Federal revenue. Each year, the Federal Government collects
on average between $5 billion-$14 billion in offshore royalty revenue,
much of it from right here in the Gulf of Mexico.
For the first time in our Nation's history, GOMESA provides a way
to compensate Gulf states and coastal communities with a much deserved
and long overdue portion of royalty revenue collected from the OCS in
the Gulf. GOMESA represents our fair share for supporting offshore oil
and gas activity, just as non-coastal states share in royalty revenues
for activity on Federal lands, although at a much higher rate.
GOMESA was designed to ensure that states have adequate resources
for coastal restoration, conservation, and hurricane protection
projects. In Louisiana, revenue sharing is dedicated for funding the
state's coastal restoration and protection initiatives as well as
protecting critical energy infrastructure such as Louisiana Hwy 1,
which is the only highway to Port Fourchon, America's energy port. In
fact, in 2006 Louisiana voters passed a constitutional amendment to
dedicate 100 percent of all GOMESA revenues to the restoring and
protecting of Louisiana's coast. Large-scale restoration of coastal
Louisiana is critical to protecting existing infrastructure and an
industry of national importance.
GOMESA funding is a reinvestment in America's wetlands and our
critical energy infrastructure. GOMESA represents Louisiana's fair
share of offshore royalty revenues and this funding is critical for
restoring Louisiana's vanishing coastline as well as protecting the
coastal communities and businesses who support our offshore oil and gas
industry. It is imperative that this reinvestment in America's coastal
communities that give so much be sustained.
In closing, Louisiana has proven firsthand that we can successfully
produce American energy while at the same time protecting our
environment. As Congress and the Administration considers opportunities
to expand oil and gas development and production in the OCS, look no
further than Louisiana for an example of the tremendous benefits such
robust activity can offer while also protecting precious coastal
environments, wildlife and fisheries. Consider Louisiana as well, when
you consider the impact that GOMESA funds can make in preserving this
economic engine and environmental treasure for decades to come.
The vibrant offshore oil and gas industry in the Gulf of Mexico has
proven to provide long-lasting and undisputable economic and energy
security benefits not only to Louisiana, but also to the entire Nation.
These are direct benefits that states across our country could
experience with the opening of additional OCS territories for energy
development. The OCS has significant reserves of oil and natural gas
that could help reduce our dependence on foreign energy sources, expand
employment opportunities, improve the stability of our economy, and
reduce the burden on consumer's pocketbooks. It's time to look at all
of these options as we forge America's energy future.
______
Dr. Gosar. I thank the gentlelady.
The Chair will now recognize Ms. Howell for her 5 minutes.
STATEMENT OF MARGARET S. HOWELL, FOUNDER, STOP OFFSHORE
DRILLING IN THE ATLANTIC, PAWLEYS ISLAND, SOUTH CAROLINA
Ms. Howell. Thank you. Chairman Gosar, Ranking Member
Lowenthal, and honorable Subcommittee members, good morning. My
name is Peg Howell. Thank you for inviting me to testify before
the Committee today. I would like to submit my written
testimony for the record.
I especially want to thank you for inviting a citizen who
lives on the beautiful South Atlantic coast. The binders in
front of me hold resolutions and letters from just some of the
people I am representing today who opposed seismic testing and
drilling.
There are over 126 East Coast municipalities, more than
1,200 local state and Federal elected officials, an alliance
representing over 41,000 businesses, and half-a-million fishing
families. There are fishing management councils, restaurant and
hotel associations, numerous chambers of commerce, tourism
boards, and homeowners represented in these binders. All of
these people are Republicans and Democrats. For us, protecting
their Atlantic Coast is not a partisan issue.
My comments today are informed by my firsthand experience
as an offshore drilling engineer and business owner, and
especially as a mother who is committed to leaving this world a
better place for my son and for generations to come.
I was the first female company man--which is the oil
field's term for a drilling rig supervisor--in the Gulf of
Mexico. I have worked for Mobil, Marathon, and Chevron Oil
companies in the U.S. Gulf and in the North Sea. I later earned
an MBA from Harvard and have run my own consulting business for
23 years.
On behalf of the coastal businesses and residents, I want
to emphasize four important points today.
First, the Atlantic Coast economy, nearly 1.4 million jobs
and over $95 billion in GDP annually from our fishing, tourism,
and recreation industries, rely on a healthy ocean ecosystem
and an unsoiled coast. Offshore exploration and production and
the dirty onshore infrastructure that support it represent too
great a risk to our current and future livelihood and quality
of life. To expose the Atlantic to offshore drilling is, as my
state of South Carolina's Governor McMaster says, ``killing the
goose that laid the golden egg.''
The Gulf Coast's economy grew up with the oil business. The
people of the Atlantic Coast have protected it from misuse and
exploitation for hundreds of years. To now bring the pipelines,
vessel traffic, storage tanks, and refineries to the Atlantic
Coast not only guarantees destruction of our coastal economy,
it also puts at risk human health and quality of life.
Onshore infrastructure like that at Port Fourchon,
Louisiana are pollution threats to water and air quality,
especially when hurricanes strike. Remember the Deepwater
Horizon catastrophe? Visitor spending in Louisiana alone in
2010 dropped by $247 million. The total impact of that disaster
on fisheries could total $8.7 billion by 2020.
Two, there is no reason to drill in the Atlantic to enhance
our energy independence or security. The United States is
already the dominant producer of oil and gas in the world.
Because we have an abundant supply, in December of 2015,
Congress allowed oil companies to start exporting our crude oil
for the first time since the oil embargoes in the 1970s. We are
now exporting more than a million barrels of our oil a day to
foreign countries like China.
Congress and the Administration acknowledge that our supply
is so secure that they will be selling off half of our
strategic petroleum reserve. Our global security comes from
moving away from oil and gas toward cleaner energy sources.
Three, contrary to claims made by oil and gas industry
associations, seismic airgun blasting is not harmless, and
drilling is not safer or environmentally friendly.
Let's start with seismic surveys. Seismic airgun blasts,
one of the loudest man-made noises in the ocean, are discharged
every 10 to 12 seconds, 24 hours a day, for months at a time.
The noise can be heard more than 2,500 miles from the source,
approximately the distance from New York to Las Vegas.
Five seismic companies are currently applying for permits
to blast an unprecedented amount of noise into the ocean. There
is nowhere for the impacted mammals like whales, dolphins, and
sea turtles to escape the noise, which seriously affects their
ability to communicate, navigate, feed, and mate. Numerous
studies show the detrimental impact of seismic airguns on our
fisheries and on zooplankton, the foundation of our marine food
web.
If seismic testing had definitively found oil and gas, then
Royal Dutch Shell would not have spent $7 billion in the Arctic
2 years ago to drill a dry hole. In order to find oil and gas,
you have to drill.
Now, let's talk about drilling. It is not safer. In fact,
the safeguards put in place after Deepwater Horizon are being
rolled back by this Administration. But the Deepwater Horizon
blowout did not happen because of failed technology. It
happened because of a bad decision. Technology may improve, but
decisions are still made by people, and people make mistakes.
Four, when the oil and gas business comes to town, they are
here to stay. Some people in our government think that somehow
oil rigs just come, drill holes, and then they go away. They
don't know that if commercial quantities of oil and gas are
found, as Kate mentioned earlier, the lease entitles the oil
company to produce there forever. This is the sad reality of
the West Coast, where Californians have been trying to stop
offshore drilling for nearly 50 years. In some foreign
countries there are precious reserves; the oil companies pocket
the profits, and those of us along the coast take all the
risks.
[The prepared statement of Ms. Howell follows:]
Prepared Statement of Margaret S. Howell, Founder, Stop Offshore
Drilling in the Atlantic
Chairman Gosar, Ranking Member Lowenthal and Honorable Committee
Members: Good morning. My name is Peg Howell. Thank you for inviting me
to testify before the Committee today. I look forward to a robust
conversation about the impacts that the proposed offshore drilling and
seismic testing in the Atlantic will have on coastal economies and the
people who live and visit here. I would like to submit my written
testimony for the record.
I especially want to thank you for inviting a citizen who lives on
the beautiful Atlantic coast. We are the ones who will be most impacted
if the Atlantic is opened to offshore exploration and drilling. It is a
daunting task to represent the millions of residents, tens of thousands
of business owners, and the marine and wild life that grace our coast--
all of which will be harmed in some way by offshore drilling, seismic
testing, and the onshore infrastructure that supports it.
The opposition to seismic airgun blasting and offshore drilling in
the Atlantic is enormous and continues to grow [Fig. 1]. We have
resolutions and letters opposing seismic testing and drilling from:
126 East Coast municipalities
Over 1,200 local, state and Federal elected officials
An alliance representing over 41,000 businesses and
500,000 fishing families from Florida to Maine
New England, South and Mid-Atlantic Fishery Management
Councils
Other commercial and recreational fishing interests, such
as the Fisheries Survival Fund, Southern Shrimp Alliance,
Billfish Foundation and International Game Fish Association
Numerous chambers of commerce, tourism boards, and
homeowners, restaurant and hotel associations from New
Jersey to Florida
In addition, NASA, the Department of Defense, and the Florida
Defense Support Task Force have also expressed concern with offshore
oil and gas development threatening their ability to perform critical
activities.
In my own state of South Carolina, every mayor in every coastal
city and town as well as our Governor oppose seismic testing and
drilling. They are Republican and Democrat alike; protecting our coast
is not a partisan issue.
My comments today are informed by my firsthand experience as an
offshore drilling engineer, business owner, educator and especially as
a mother who is committed to leaving this world better than I found
it--for my son and for generations to come.
I was the first female petroleum engineer to graduate from Marietta
College, where I earned my B.S. in Petroleum Engineering, cum laude. I
was also the first female ``company man''--which is the oilfield's term
for drilling rig supervisor--in the Gulf of Mexico [Fig. 2]. I have
worked for Chevron, Mobil, and Marathon oil companies in the United
States and in the North Sea. I later earned an MBA from Harvard
Business School and have run my own consulting business for 23 years.
My work has been focused on developing leaders, primarily senior
executives in Fortune 50 companies.
A little over 8 years ago, my husband and I semi-retired to a piece
of heaven on earth called Pawleys Island, South Carolina. Pawleys
Island is one of the oldest seaside resorts in the country, established
in the early 1700s by plantation owners who came to the beach in the
summertime to escape the mosquitoes and the malaria in the rice fields.
Pawleys is a place where people deeply love their land, the rivers, the
salt marshes and the beaches. We are proud, as one neighbor said, of
the ``generations of concerned, responsible people, along with county,
state and federal governments, that have worked for more than a century
to protect hundreds of miles of the Atlantic Coast from abuse, misuse
and exploitation. As a result, [our] coast contains some of the most
pristine waters, beaches and salt marshes (a vital nursery for sea
life) in the world.'' \1\ We are also proud of the science that is done
in those untouched inlets and coastal forests by universities across
the state and the country--science that helps us understand the
interconnectedness of all life.
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\1\ http: / / www.postandcourier.com / opinion / letters_to_editor
/ letter-seismic-testing / article_ afba5e44-5299-11e7-a1a5-
4be4ae320b7d.html?utm_medium=social&utm_source=facebook&utm_
campaign=user-share.
In that context, you can imagine my shock and dismay in the fall of
2013 when I started noticing articles and op-eds in our local newspaper
written by our County Councilman and State Representative supporting
oil and gas exploration in the Atlantic \2\ \3\ [Figs. 3, 4]. Why would
these men put our precious coast and economy at risk?
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\2\ Coastal Observer, ``House District 108: Questions for Stephen
Goldfinch,'' October 30, 2014.
\3\ Coastal Observer, ``Offshore Drilling, An Opportunity for
Economic Growth'' by Bob Anderson, former Georgetown County
Councilmember, District 6, October 24, 2013.
Those articles set in motion a series of events that culminated in
a small group of individuals in Pawleys Island forming an organization
called ``SODA-Stop Offshore Drilling in the Atlantic'' in February
2015. SODA is an all volunteer, non-partisan, grassroots organization
formed because of our desire to protect and preserve the health and
economy of the Atlantic coast, our home. Our sole mission is to prevent
offshore seismic testing and drilling for oil and gas in the Atlantic.
We have an extremely dedicated and talented core team that has been
meeting at least twice a month since our founding, and are joined by
approximately 2,000 active members engaged in educating the citizens
and elected officials of South Carolina about offshore issues, and
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advocating for our coast at the Federal, state and local levels.
Since March 2015, we have been researching and sharing with
literally thousands of people the facts about why offshore oil and gas
drilling and seismic airgun surveys are not good for South Carolina.
One of the most important contributions SODA has made to the effort is
a study called Tourism vs. Oil (TVO), written by three SODA team
experts [Fig. 5]. This analysis compared the financial trade-offs of
the proposed venture to drill for oil in the Atlantic Ocean off the
South Atlantic states with the projected value of South Carolina's
tourism-based economy, based on the study prepared for the American
Petroleum Institute and the National Ocean Industries Association,
titled, The Economic Benefits of Increasing U.S. Access to Offshore Oil
and Natural Gas Resources in the Atlantic, authored by Quest Offshore
Resources (the Quest Report). The TVO analysis concludes that the
overly optimistic projections for state revenues included in the Quest
Report are only 1/27th of the conservative estimates of South
Carolina's tourism economy over the same time period. In other words,
the TVO analysis shows, in indelibly stark numbers, that it is not in
the economic interest of the state of South Carolina or its residents
to support drilling in the Atlantic.\4\
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\4\ http://www.drilldownsc.com/#!tvo/c1sav.
Looking at the entire Atlantic coast economy, nearly 1.4 million
jobs and over $95 billion in gross domestic product rely on a healthy
coast and ocean ecosystems, mainly through fishing, tourism and
recreation. To expose the Atlantic to offshore drilling and seismic
testing is, as South Carolina Governor McMaster says, ``killing the
---------------------------------------------------------------------------
goose that laid the golden egg.''
As you know, offshore oil and gas exploration and development
begins with seismic airgun surveys, an extremely loud and dangerous
process used to search for potential oil and gas deposits deep below
the seafloor. The airgun blasts--one of the loudest man-made noises in
the ocean--are discharged every 10-12 seconds, 24 hrs/day for months at
a time. The noise can be heard more than 2,500 miles from the source,
approximately the distance from New York to Las Vegas. Five companies,
some of which are internationally based, are currently applying for
Incidental Harassment Authorizations (IHAs) from NOAA [Fig. 6]. The
standard they must meet to obtain the IHA is that the number of takings
would:
be of small numbers,
have no more than a ``negligible impact'' on those marine
mammal species or stocks, and
not have an ``unmitigable adverse impact'' on the
availability of the species or stock or ``subsistence''
uses.
The seismic companies will be running over 90,000 miles of seismic
lines across all the Mid- and South Atlantic Planning Areas, roughly
170 million acres. Combined, they will run a total of 906 days of
seismic within a 1-year permit period. This is an unprecedented amount
of noise. When comparing this amount of seismic to all the seismic run
from 1968 through 1997, there is no other year in any Federal OCS area
that ran this much seismic.\5\
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\5\ Geological & Geophysical Data Acquisition, Outer Continental
Shelf Through 1997, George Dellagiarino, Patricia Fulton, Keith Meekins
and David Zinzer, U.S. DOI MMS, OCS Statistical Report MMS 98-0027.
The five companies collectively have requested over 435,000
individual Level B harassments, and the proposed mitigation only
compresses the time frame during which the airgun blasts occur. There
is nothing ``small'' or ``negligible'' about that impact, given that
the airgun sound travels thousands of miles. There is nowhere for the
impacted mammals like whales, dolphins and sea turtles to escape the
noise, and we know the noise negatively affects mammals' ability to
communicate, navigate, feed and mate. For small populations of mammals,
such as the fewer than 500 North Atlantic Right Whales, this amount of
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noise will certainly cause population-level adverse impact.
It is important to note that one of the companies seeking a permit
to conduct seismic airgun blasting, CGG, is a French-based company that
is relying on selling the data from this permit to avoid bankruptcy.
The U.S. Federal Government is literally putting the interest of French
oil companies over its own coastal economies and residents.\6\
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\6\ https://www.reuters.com/article/france-cgg-idUSL8N1JB6H8.
Numerous studies show the detrimental impact seismic airguns have
on fisheries and marine mammals, thereby affecting the catch that
anglers bring dockside and the revenues generated by associated
businesses. A 2014 study conducted off North Carolina's coast by the
University of North Carolina Chapel Hill, Duke University and NOAA,
found that during seismic surveying the abundance of reef-fish declined
by 78 percent. Just last month, a new study published in Nature Ecology
and Evolution found that noise from seismic airguns can also kill
zooplankton from a distance of almost three-quarters of a mile away,
further than previously thought.\7\ Zooplankton is the foundation of
our marine food web. The resultant effects of this impact also damage
commercial fishing, restaurants and the recreational fishing businesses
in our coastal communities. This is why every major commercial fishing
association has opposed seismic surveys and offshore drilling.
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\7\ https://www.nature.com/articles/s41559-017-0195.
Some in government are saying, ``We should know what's out there.
Let's at least run the seismic.'' But we are now acutely aware of the
damage airgun blasts wreak on our marine life--from our largest marine
mammals down to the tiniest zooplankton. And it is very important to
note that seismic surveys alone do NOT definitively tell us what is out
there. Five applications for permits are currently under review to run
2D seismic in the Atlantic. Historically, 2D seismic alone is only
successful in finding oil and gas approximately 20-25 percent of the
time. After the requested 2D surveys, seismic companies will be back
here asking for permits to run 3D seismic, a second blast of non-stop
airgun noise in our ocean. And 3D seismic only increases the odds of
finding oil and gas to 40-50 percent of the time, in true ``wildcat''
exploration. If seismic surveys were able to definitively find oil and
gas, Royal Dutch Shell would not have spent $7 billion on a dry hole in
the Arctic 2 years ago. In order to find oil and gas, you will not
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``know what's out there'' until you drill.
Some proponents of opening drilling in the Atlantic make the
argument that seismic airgun surveys for oil and gas deposits would
allow local communities to learn more about what resources might be
available. The reality is that, by law, the seismic surveys are
proprietary for 25 years and only available to BOEM and to the oil and
gas companies which purchase them. The public, local government
officials and even Members of Congress would not have access to the
survey data. This inability to access information leaves coastal
communities without the opportunity to perform substantive cost-benefit
analyses for extracting oil and gas reserves off their coasts. Local
stakeholders would be left taking on significant risk without being
involved in future development decisions.
The dangers of offshore drilling, its associated onshore
infrastructure and the transportation of crude oil, liquefied natural
gas (LNG) and refined products are well known. The BP Deepwater Horizon
catastrophe should inform our decisions about the Atlantic. DWH was an
exploratory well in the Gulf of Mexico, located just 41 miles off the
coast. That blowout killed 11 men, pumped 210 million gallons of oil
into the waters off Louisiana, Mississippi, Alabama and Florida, and
contaminated over 1,100 miles of coastal marshes and beaches [Fig. 7].
It took months to regain well control. The impact of that disaster on
fisheries could total $8.7 billion by 2020, with the loss of 22,000
jobs and 10 million user-days of beach, fishing and boating activity.
Leisure-visitor spending in Louisiana alone in 2010 dropped by $247
million.\8\
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\8\ http: / / usa.oceana.org / sites / default / files /
deepwater_horizon_anniversary_report_updated_ 4-28.pdf.
While that blowout was extraordinary, at least monthly we hear news
of a spill from offshore drilling, transporting, storing or refining
oil and natural gas. According to the Bureau of Ocean Energy
Management, there were 232 oil spills in the Gulf of Mexico between
1964 and 2012 resulting in a total of 223,332,900 gallons of oil dumped
into the Gulf.\9\ In 2016 alone, 497 accidents (damages, injuries and
spills) involving offshore oil rigs were reported.\10\ \11\
---------------------------------------------------------------------------
\9\ https: / / www.bsee.gov /sites /bsee.gov /files /reports /
incident-and-investigations /spills-greater-than-50-barrels1964-2012-
as-of-august-3-2012.pdf.
\10\ https://www.doi.gov/sites/doi.gov/files/migrated/budget/
appropriations/2016/upload/FY2016_ NRDA_Greenbook.pdf.
\11\ https://www.fastcompany.com/40406093/how-satellite-data-
caught-gulf-oil-companies-hiding-enormous-oil-spills.
We know from industry reports that oil companies are particularly
interested in drilling in deep (>1,000 ft.) and ultra-deep (>5,000 ft)
water depths, along the escarpment of the outer continental shelf \12\
[Fig. 8]. Deep water exploration is the most dangerous type of
drilling. Not only does it require more sophisticated and oftentimes
new and untested technology, it is often located farther away from the
coast, hence farther away from emergency support services in the case
of a blowout. Note that while the Deepwater Horizon was located only 41
miles from shore, it was drilled in a water depth of 5,000 ft, which
made it much more difficult to cap, ultimately allowing the well to
blow out for 87 days while a relief well was drilled. The Atlantic
seismic permit applications request survey lines run in over 16,000 ft
of water. The deepest water depth a well has been drilled to date is
11,156 ft.\13\ This raises another concern that oil companies may want
to explore for the first time at record water depths.
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\12\ The Economic Benefits of Increasing U.S. Access to Offshore
Oil and Natural Gas Resources in the Atlantic, authored by Quest
Offshore Resources, December 2013.
\13\ http://gcaptain.com/maersk-venturer-begins-drilling-worlds-
deepest-well/.
Every U.S. coast where offshore oil and gas is produced and
transported has suffered multiple massive spills and billions of
dollars in damages--most notably oil spills off the Santa Barbara
coast, the Exxon Valdez, near-daily spills in Galveston Bay, and spills
and ongoing leaks caused by hurricane damage to hundreds of offshore
platforms and thousands of miles of pipelines in the Gulf of Mexico
---------------------------------------------------------------------------
[Fig. 9]. The Atlantic coast will be no different.
Those of us who live near or visit the Atlantic wonder, ``Why would
anyone want to put at risk this ocean, our jobs, our property, our
favorite vacation spots and our way of life?'' Opening the Atlantic to
seismic testing and drilling jeopardizes our coastal businesses,
fishing communities, tourism and our national defense. It opens the
door to even greater risks from offshore oil and gas production down
the road. Do we need to drill in the Atlantic to be ``energy
independent,'' or as Interior Secretary Zinke likes to say, ``energy
dominant?'' The answer is ``no.'' Because of the ``shale revolution,''
the United States is already the world's leader in oil and gas
production. The United States has been first in the world in natural
gas production since 2009, when American output surpassed Russia. U.S.
production of petroleum hydrocarbons exceeded that of Saudi Arabia in
2013 \14\ [Fig. 10].
---------------------------------------------------------------------------
\14\ https://www.oilandgas360.com/despite-oil-downturn-u-s-ranks-
no-1/.
---------------------------------------------------------------------------
So why is there is a desire to drill in the Atlantic?
In my work with CEOs across many industries, I have seen how the
constant need to increase stock price drives a lot of bad decisions.
Wall Street's need to see increasing growth and ever higher returns
pushes companies to only think of consistently delivering the bottom
line. In an extraction industry like oil and gas, where the resource is
finite, non-renewable and depleting, you have to continuously find new
oil and gas reserves to `feed the beast' and seek new markets around
the world to export those newly developed quantities of oil and gas.
Oil companies want to drill in the Atlantic to be able to export
even more U.S. oil and gas overseas. Since December 2015, when Congress
allowed oil companies to export our crude oil for the first time since
the Arab oil embargoes of the 1970s, we have been steadily increasing
our crude exports and are now sending more than a million barrels a day
to countries like China \15\ [Figs. 11 and 12]. We are also now
exporting over 187 billion cubic feet of liquefied natural gas (LNG) a
year \16\ \17\ \18\ [Fig. 13]. In addition, Congress and the
Administration have proposed selling off half of our Strategic
Petroleum Reserve because, according to OMB Director Mulvaney, ``We
think it's the responsible thing to do.'' Mr. Mulvaney told the press,
``I don't need to take this much of your money to bury it in the ground
out in West Texas someplace for domestic security and national security
reasons when we have domestic supplies like we do.'' \19\
---------------------------------------------------------------------------
\15\ https://www.eia.gov/dnav/pet/hist/
LeafHandler.ashx?n=PET&s=MCREXUS1&f=M.
\16\ https://www.eia.gov/dnav/pet/pet_move_expc_dc_NUS-
Z00_mbbl_m.htm.
\17\ https://www.oilandgas360.com/despite-oil-downturn-u-s-ranks-
no-1/.
\18\ https://www.eia.gov/todayinenergy/detail.php?id=31532.
\19\ http://thehill.com/policy/energy-environment/334811-budgets-
oil-provisions-divide-congress-white-
house?utm_source=&utm_medium=email&utm_campaign=8890.
If the Administration believes that our energy supply is secure
enough to sell off 50 percent of our strategic reserve, then why would
it risk the $95 billion in annual GDP from the Atlantic region and
instead take on the significant economic, health and environmental
---------------------------------------------------------------------------
risks associated with exploration and development of the Atlantic?
While oil companies' stock prices may benefit from these export
sales, U.S. consumers lose. When demand (domestic plus export) exceeds
supply, prices go up. According to the Energy Information Agency
(EIA)'s latest Short-Term Energy Outlook (STEO), ``New natural gas
export capabilities and growing domestic natural gas consumption
contribute to the natural gas spot price rising from an average of
$3.16/MMBtu in 2017 to $3.41/MMBtu in 2018.'' \20\
---------------------------------------------------------------------------
\20\ https://www.eia.gov/outlooks/steo/report/natgas.cfm.
The Atlantic coast developed differently than the Gulf coast.
Offshore oil and gas has been part of the Gulf's economy since the
1930s. The offshore waters and marshlands of south Louisiana were
carved by canals dug through them to position rigs and gather
production. ``Going to the beach'' means something very different in
south Louisiana than it does along the mid and south Atlantic. To now
bring to the Atlantic region the onshore infrastructure, pipelines,
vessel traffic and pollution that accompanies offshore drilling
guarantees destruction of the beautiful beaches, healthy marshes and
---------------------------------------------------------------------------
rivers--as well as the economy--of our coast.
Our health and quality of life are also at risk. Onshore
infrastructure, including oil and gas storage, refineries and gas
liquefaction plants, and the diesel and chemicals stored there for use
in drilling, are a necessary part of the drilling and production
support bases. Bases like Port Fourchon, Louisiana are pollution
threats to water and air quality, especially when hurricanes strike
[Fig. 14]. This type of infrastructure and the petrochemical industry
that frequently locates nearby is not only incompatible with our
tourism and recreation-based economies; it is also inconsistent with
the healthful environment people seek when they move here.
We must also consider the impact of the oil and gas industry on our
children. The Annie E. Casey Foundation has published the ``Kids Count
Data Book'' for nearly three decades which tracks the well-being of the
nation's children, state by state, using a comprehensive index,
including indicators across four domains: Economic Well-Being,
Education, Health, and Family & Community. The overall ranking of the
four Gulf states were some of the lowest in the Nation (TX 41st, AL
44th, LA 48th, and MS 50th). The overall ranking of the mid and south
Atlantic states were higher (VA 10th, MD 16th, NC 33rd, SC 39th, FL
40th, GA 42nd) \21\ [Fig. 15]. While this doesn't prove that states
that don't have oil and gas industry revenues have better child well-
being, it certainly raises the question: why do states that are heavily
dependent on oil and gas revenues rank so low?
---------------------------------------------------------------------------
\21\ http://www.aecf.org/resources/2017-kids-count-data-book/
?gclid=CPzat7Wm-tQCFc1LDQodua QGcw.
Some people who live here, including many of our government
officials, were initially under the impression that because you can't
see the rigs from the beaches (assuming the 50 mile buffer will be
included in the new proposed plan), that there will be no harm to our
coast. They think that somehow the rigs just come, drill, and then go
away, without considering the deleterious effect of oil and gas
---------------------------------------------------------------------------
production on the local economy and environment.
We have found it helpful to share with them the history of Southern
California's experience with the oil and gas industry:
In California, the first Federal OCS lease sale was held in 1963.
Six years later the first Santa Barbara spill occurred which caused
such an uproar against drilling that the U.S. Secretary of the Interior
removed Federal tracts near Santa Barbara from oil and gas leasing.
However, the Federal Government quickly resumed offshore leasing and
continued to hold sales through 1982, when the U.S. Congress directed
that no Federal funds be used to lease additional Federal tracts off
the coast of California. No Federal lease sales have been proposed for
offshore California since then--until President Trump's Executive Order
was signed this April which will require California to once again be
considered.
During this same time, the California State Lands Commission, which
owns and controls the mineral resources within 3 nautical miles of the
coast, had not permitted leasing of state offshore tracts since the
Santa Barbara oil spill in 1969.
In 1996, Chevron removed four of its oil and gas platforms off the
Santa Barbara and Ventura coast which led to Federal plans for the
decommissioning of the remaining offshore California structures. At
that time, there were a total of 27 oil and gas platforms and
approximately 200 miles of associated pipelines located off the coast
of Southern California. All of this oil infrastructure was installed as
a result of the initial lease sales, but remained even after the 1982
ban on further lease sales.
A second large Santa Barbara oil spill happened just before
Memorial Day weekend 2015, when an underground pipeline that transports
oil from an offshore platform to refineries ruptured, spilling 142,000
gallons of crude oil into a coastal state park. The spill, caused by
corrosion in a pipeline that did not have automatic shutoff valves,
closed nearby beaches for 2 months, killed hundreds of animals,
including birds, sea lions, and dolphins, and cost $96 million to clean
up.
By law, as long as Federal OCS wells are producing commercial
quantities of petroleum, oil companies may continue to produce from
those leases, drill more wells, or sell the property to another
operator. In the California OCS waters, oil companies have produced
from some of these OCS leases for over 50 years--more than 40 years
after the Santa Barbara spill.\22\,\23\
---------------------------------------------------------------------------
\22\ http: / / www.ogj.com / articles / 2017 / 06 /boem-to-
identify-california-offshore-platform-decommissioning-issues.html.
\23\ http://www.mercurynews.com/2017/04/17/first-california-
offshore-oil-platform-to-be-removed-in-20-years/.
Despite the long-term bans on new leasing in California state
waters (since 1969) and Federal waters (since 1982), drilling and
production have continued on these leases. The point of reviewing this
history is to educate Atlantic coast residents and elected officials
that when the oil business comes to town, it is very slow to leave, if
---------------------------------------------------------------------------
ever.
Some of the same people who thought the rigs would just come,
drill, and then go away, have also heard that drilling technology has
improved, and it's safer since the Deepwater Horizon disaster. Although
the Department of the Interior adopted many of the safety
recommendations from the National Commission on the BP Deepwater
Horizon Oil Spill, President Trump's April 28 Executive Order on
offshore energy threatens to abolish these safety improvements. Bob
Graham, a former Florida Governor and U.S. Senator, and William K.
Reilly, a former administrator of the Environmental Protection Agency,
were co-chairmen of the commission. They, along with the other
commission members are unanimous in their view that the actions
proposed in the President's Executive Order are unwise.\24\
---------------------------------------------------------------------------
\24\ https: / / www.nytimes.com / 2017 / 07 / 05 / opinion / trump-
oil-drilling-energy-gulf.html?smid= fb-share.
``I don't have any doubt it's safer than before, but you can't
eliminate risks in operations like this,'' says Michael Bromwich, who
led the Interior Department's newly created agency to regulate the
industry after the Gulf spill. ``Anytime you go deeper, the
technological risks increase.'' Deepwater drilling still relies on the
same underlying technology and a skilled workforce, says Paul Bommer,
who holds the Chevron lectureship in petroleum engineering at the
University of Texas at Austin. ``It's still a people business,'' Bommer
says.\25\
---------------------------------------------------------------------------
\25\ http://news.nationalgeographic.com/2015/04/150420-bp-gulf-oil-
spill-safety-five-years-later/.
---------------------------------------------------------------------------
And people make mistakes.
As an engineer, I was taught to identify the problem and solve it.
While earning an MBA, my problem-solving and decision-making horizon
expanded. I learned that effective leaders consider both the short-term
and long-term aspects of a problem. While Wall St. demands short-term
results, responsible leadership requires making decisions that are
consistent with our values and goals as a society.
Whether or not to drill in the Atlantic is a leadership challenge
which requires considering all the issues, then thinking about our
values and the impact on our children and their futures. If the
Atlantic is opened to offshore drilling and seismic testing, will
Winyah Bay near my home still host those beautiful redfish? Will North
Inlet's salt marshes still be a pristine nursery for crabs, shrimp and
oysters? Will the snowy egrets and blue herons still vie for the best
places to roost while keeping an eye on the alligators at Huntington
Beach State Park? Will my son's children and their children still
remember the beautiful beach where Grandma and Grandpa took them to
look for sea turtle tracks in the morning and watch for dolphins on the
horizon at day's end?
I don't expect that I--or most of you for that matter--will still
be here in 40 years when we will know the consequences of these
decisions about seismic blasting and drilling in the Atlantic. I want
to believe that the Atlantic Ocean and our coast will still be as
magnificent as they are today and future generations will be inspired
by our legacy, because this is a FOREVER decision.
I look forward to answering any questions you may have today. Thank
you.
*****
The following document was submitted as a supplement to Ms. Howell's
testimony. This document is part of the hearing record and is being
retained in the Committee's official files:
--APPENDIX, containing Figures 1-15.
______
Dr. Gosar. I thank the gentlewoman.
Ms. Howell. Interested in taking your questions later.
Dr. Gosar. The Chair now recognizes Mr. Whatley for his
testimony.
STATEMENT OF MICHAEL WHATLEY, EXECUTIVE VICE PRESIDENT,
CONSUMER ENERGY ALLIANCE, CHARLOTTE, NORTH CAROLINA
Mr. Whatley. Thank you, Mr. Chairman, Ranking Member
Lowenthal, and members of the Subcommittee. It is an honor to
be here today on behalf of Consumer Energy Alliance (CEA) to
testify on the important need for expanded oil and natural gas
leasing on the Outer Continental Shelf.
Consumer Energy Alliance is a national, non-profit, non-
partisan trade association with more than 280 affiliate members
which represent truckers, manufacturers, farmers, and nearly
every sector of the U.S. economy, along with 450,000
individuals across the country who are dedicated to developing
and implementing energy policies which will promote affordable
and reliable energy.
CEA strongly supports expanded offshore energy development
as a critical component of a rational, balanced, all-of-the-
above energy policy, and we applaud the decision by the Trump
administration to develop a new 2019-2024 offshore energy
leasing program.
With 94 percent of the Federal waters currently closed to
leasing, the development of a new 5-year plan will provide an
important opportunity for the Interior Department to reassess
and revise existing restrictions and expand leasing in the
Arctic, Gulf of Mexico, and the Atlantic.
As a resident of North Carolina, the benefits of potential
Atlantic development are important to me. According to a recent
study conducted by Quest Offshore Resources, Atlantic energy
development could create more than 55,000 jobs, add more than
$4 billion annually to the state's economy, and generate nearly
$4 billion in new state revenues in North Carolina alone.
More broadly, Atlantic development could generate almost
280,000 jobs, nearly $200 billion in increased economic
activity, and $51 billion in new public revenues, regionally.
Furthermore, Atlantic development could generate an
additional 1.3 million barrels of oil equivalent per date. This
is enough to replace nearly two-thirds of the crude oil and
petroleum products that we import daily from the Persian Gulf.
Expanded access in the Atlantic, Gulf of Mexico, Pacific,
and Alaska could provide significant benefits for the entire
Nation. Access to the 404 trillion cubic feet of natural gas
and 90 billion barrels of oil projected to sit in the Outer
Continental Shelf would create more than 840,000 jobs, $550
billion in increased economic activity nationwide, and more
than $395 billion in increased government revenues, as well as
keep prices of gasoline, diesel, and jet fuel affordable, which
is critical for every segment of the U.S. economy.
In terms of American energy security, it is important to
note the U.S. military. The single largest energy user in the
world relies heavily on oil, bunker fuel, and jet fuel to
protect U.S. interests around the world. In Fiscal Year 2014,
the Department of Defense used over 87 million barrels of fuel
at a cost of nearly $14 billion. With oil roughly $100 per
barrel cheaper than it was in 2008, we are now saving $8.7
billion per year in fuel, money that could be spent on body
armor, new weapon systems, or other critical programs.
Increased domestic production can also provide U.S. allies
with energy supplies, in turn reducing their dependence on
hostile regimes in opening global markets.
It is very important that the offshore energy development
is safe, and that it gets safer every day. Growing up, I spent
a lot of time with my family on beaches at Nags Head, Kitty
Hawk, and Topsail Island, North Carolina. Now I take my
children to the beach every year for vacation. It is important
to me, just like it is for all of the residents and vacationers
who visit America's beaches every year, that the industry and
the Federal Government work together to ensure that any
exploration and development of offshore energy resources is
done without harm to these national treasures.
Both the Federal Government and the offshore energy
industry have made great strides improving every aspect of
offshore energy production. Among these changes are the
creation of new, collaborative containment companies that stand
ready to deploy state-of-the-art containment technologies at
the first sign of any wellhead spill; the development of more
than 600 industry standards and 100 Federal standards covering
all aspects of energy production; and the creation of the
Center for Offshore Safety, which works with independent third-
party auditors and government regulators to create an industry-
wide culture of ongoing safety improvement.
More than 40,000 wells have been safely drilled in the Gulf
of Mexico, and more than 700 are operating at depths of more
than 5,000 feet today. This record, and the fact that 99.999
percent of all oil produced, transported, and refined in the
United States reaches its destination safely are important
points for Congress and the Trump administration to consider
when anti-development activists claim that the industry cannot
operate safely, or that a major spill is inevitable.
There is strong support across the country for opening up
new areas in the Arctic, Gulf of Mexico, and the Atlantic. In
addition to my full written testimony, I would ask to submit
for the record several letters from stakeholders and state
legislators in Virginia, North Carolina, South Carolina,
Georgia, and Florida, expressing strong support for the
Administration's decision to move forward with this new plan,
and asking for expanded OCS leasing, which will put Americans
to work, boost the economy, provide significant revenues to
help fund the government, and reduce our alliance on overseas
imports.
Thank you again for the opportunity to testify today.
[The prepared statement of Mr. Whatley follows:]
Prepared Statement of Michael Whatley, Executive Vice President,
Consumer Energy Alliance
Chairman Gosar, Ranking Member Lowenthal, and members of the
Subcommittee, it is an honor to be here today on behalf of Consumer
Energy Alliance to testify on developments surrounding offshore oil and
natural gas development in America's Federal waters.
Consumer Energy Alliance (CEA) is a nationwide non-profit, non-
partisan trade association which represents families and businesses in
advocating for balanced policies that support access to affordable,
reliable energy. CEA's membership includes over 275 affiliate members
that represent nearly every sector of the U.S. economy and more than
450,000 individuals across the country dedicated to developing and
implementing energy policies which will promote affordable and reliable
energy.
the need for expanded ocs leasing
The Federal Government forecasts that energy consumption will
continue to rise in the coming decades, with petroleum and natural gas
comprising more of the Nation's energy consumption portfolio in 2040
than it did in 2016,\1\ making it vital for the Federal Government to
promote opportunities to develop America's natural resources in order
to secure long-term affordable, reliable energy.
---------------------------------------------------------------------------
\1\ https://www.eia.gov/outlooks/aeo/pdf/0383(2017).pdf.
---------------------------------------------------------------------------
CEA strongly supports expanded offshore energy development as a
critical component of a rational, balanced all-of-the-above energy
policy. Along with a robust pipeline network which can move offshore
energy to refineries, natural gas processing facilities and--
ultimately--to energy consumers, offshore energy production is
essential to meeting our national energy needs.
In addition to providing tens of thousands of high-paying jobs and
adding billions of dollars to the American economy, domestic offshore
oil and natural gas production has helped keep gasoline, diesel and jet
fuel prices affordable and greatly enhanced our national energy
security. Over the past 10 years, CEA has worked with the Bush and
Obama administrations, as well as dozens of governors, hundreds of
state legislators and stakeholders and hundreds of thousands of
individual energy consumers to support expanded leasing in the Gulf of
Mexico, Alaska and Atlantic OCS regions.
Consumer Energy Alliance applauds the decision by the Trump
administration to develop a new offshore energy leasing program and
urges the Department of the Interior to expand leasing in the Arctic,
Gulf of Mexico and the Atlantic. With 94 percent of Federal waters
currently closed to leasing, the development of a new program will
provide an important opportunity to reassess and reverse existing
restrictions in areas including the Arctic, Gulf of Mexico and the
Atlantic. Expanding leasing into these areas will generate significant
economic benefits for the entire United States and can be done safely.
atlantic benefits
As a resident of North Carolina, the benefits of potential Atlantic
development are important to me. According to a recent Quest Offshore
Resources study, for North Carolina alone, Atlantic energy development
could create more than 55,000 jobs, add more than $4 billion annually
to the state's economy, and cumulatively generate over $26 billion in
spending and nearly $4 billion in new state revenue.\2\
---------------------------------------------------------------------------
\2\ http://www.noia.org/wp-content/uploads/2013/12/The-Economic-
Benefits-of-Increasing-US-Access-to-Offshore-Oil-and-Natura....pdf.
---------------------------------------------------------------------------
This would provide a much needed boost at a time when North
Carolina's middle class is struggling. A North Carolina State
University economist reported just last week that North Carolina
middle-class jobs fell 5 percent from 2001 to 2015, while the national
average rose 6 percent, leading one professor at the University of
North Carolina to note that ``We are effectively seeing indications of
the disappearance of the middle class.'' \3\
---------------------------------------------------------------------------
\3\ http://www.citizen-times.com/story/news/2017/07/06/economist-
middle-class-wage-crunch-worse-north-carolina/103462192/.
---------------------------------------------------------------------------
Underscoring the need for an adequate supply of affordable energy,
Inside Energy notes that while economists consider ``affordable''
energy to equate to 6 percent of income, households in North Carolina,
South Carolina, and Georgia with incomes below 50 percent of the
Federal poverty level spend about 30-40 percent of their income on
energy, while such households in Virginia spend roughly 40-50 percent
of their income on energy.\4\
---------------------------------------------------------------------------
\4\ http://insideenergy.org/2016/05/08/high-utility-costs-force-
hard-decisions-for-the-poor/.
---------------------------------------------------------------------------
More broadly, Atlantic development could generate almost 280,000
jobs, nearly $200 billion in Gross Domestic Product, and over $194
billion in capital investment and spending and $51 billion in new
public revenue. For the Atlantic Coast region only, that includes more
than 215,000 jobs and over $130 billion in Gross Domestic Product, $109
billion in capital investment and spending, and $19 billion in new
state revenue.
Furthermore, the study found that Atlantic development could
generate an additional 1.3 million barrels of oil equivalent per day.
That is enough to replace nearly two-thirds of the 2.1 million barrels
of crude oil and petroleum products that we import daily from the
Persian Gulf.\5\
---------------------------------------------------------------------------
\5\ https://www.eia.gov/dnav/pet/
pet_move_impcus_a2_nus_ep00_im0_mbblpd_m.htm.
---------------------------------------------------------------------------
Public polling in Atlantic coastal states underscores the support
that exists for offshore development in the region. A recent poll
commissioned by Consumer Energy Alliance found continued majority
support for expanded drilling in Virginia and North Carolina,\6\ while
Harris Polls establish similar majority support for offshore
development in South Carolina \7\ and Georgia.\8\
---------------------------------------------------------------------------
\6\ https://consumerenergyalliance.org/2017/05/poll-finds-virginia-
west-virginia-north-carolina-voters-support-atlantic-coast-pipeline-
energy-development-infrastructure/.
\7\ http://www.api.org/?/media/Files/News/2016/16-February/What-
America-Is-Thinking-South-Carolina-Feb-2016-Questionnaire.pdf.
\8\ http://www.api.org/?/media/files/news/2015/15-january/what-
america-is-thinking-offshore-drilling-ga-january-2015.pdf.
---------------------------------------------------------------------------
national benefits
Nationally, expanded access to the Atlantic, Gulf of Mexico,
Pacific, and Alaska will provide significant benefits including the
creation of more than 893,000 jobs, $450 billion in new private sector
spending, $550 billion in increased economic activity nationwide and
more than $395 billion in increased government revenues.\9\
---------------------------------------------------------------------------
\9\ http://www.noia.org/wp-content/uploads/2013/12/The-Economic-
Benefits-of-Increasing-US-Access-to-Offshore-Oil-and-Natura....pdf;
http://www.noia.org/wp-content/uploads/2014/11/The-Economic-Benefits-
of-Increasing-US-Access-to-Offshore-Oil-Natural-Gas-Resources-in-the-
Eastern-GoM.pdf; http://www.noia.org/wp-content/uploads/2014/11/The-
Economic-Benefits-of-Increasing-U.S.-Access-to-Offshore-Oil-and-
Natural-Gas-Resources-in-the-Pacific.pdf; and http://
arcticenergycenter.com/wp-content/uploads/2015/08/National-Effects-
Report-FINAL.pdf.
---------------------------------------------------------------------------
Access to the 404 trillion cubic feet of natural gas and 90 billion
barrels of oil projected to sit in the Outer Continental Shelf will
ensure a stable, steady supply of energy for American energy consumers
with reduced reliance on imports from hostile overseas regimes. It will
also keep prices of gasoline, diesel and jet fuel affordable--which is
critical to every segment of the U.S. economy.
In terms of American energy security, it is important to note that
the U.S. military--the single largest energy user in the world--heavily
relies on oil, bunker fuel and jet fuel to protect our interests around
the world. In Fiscal Year 2014, the Department of Defense used over 87
million barrels of fuel, at a cost of nearly $14 billion.\10\ With oil
hovering around $100 per barrel less than 2008 prices, we are saving
around $8.7 billion per year in fuel costs--which can now be spent on
body armor, new weapons systems or other critical programs. Increased
domestic production can also provide U.S. allies with energy supplies,
in turn reducing their dependence on hostile regimes.
---------------------------------------------------------------------------
\10\ http://www.acq.osd.mil/eie/OE/OE_index.html.
---------------------------------------------------------------------------
safety
It is very important that offshore energy development is safe--and
is getting safer every day. Growing up, I spent a lot of time with my
family on the beaches of Nags Head, Kitty Hawk, and Topsail Island, NC.
Now, I take my children on vacations to the beach every year. It is
important to me--as it is to all of the residents and vacationers who
visit the Atlantic beaches every year--that the industry and the
Federal Government will work together to ensure that any exploration
and development of offshore energy resources is done without harming
these national treasures.
Both the Federal Government and the offshore energy industry have
made great strides in improving all aspects of offshore energy
production. Among these changes are the creation of new collaborative
containment companies which stand ready to deploy state-of-the-art
containment technology at the first sign of any wellhead spill, the
development of more than 600 industry standards covering all aspects of
production and the creation of the Center for Offshore Safety, which
works with independent third-party auditors and government regulators
to create an industry-wide culture of continuous safety improvement.
More than 40,000 wells have been safely drilled in the Gulf of
Mexico and more than 700 are operating at depths of more than 5,000
feet. This record and the fact that 99.999 percent of all oil produced,
transported and refined in the United States reaches its destination
safely are important points for Congress and the Trump administration
to consider when anti-development activists claim that the industry
cannot operate safely or that a major spill is inevitable.
Moreover, these accomplishments have occurred while the country has
been making environmental strides, with net U.S. greenhouse gas
emissions in 2015 being 11.5 percent lower than they were in 2005,\11\
and as President Obama noted last year, at a time when the country has
``reduced the pace at which we are emitting carbon dioxide into the
atmosphere faster than any other advanced nation.'' \12\ This
underscores the fact that American energy development and a healthy
environment go hand-in-hand.
---------------------------------------------------------------------------
\11\ https://www.epa.gov/sites/production/files/2017-02/documents/
2017_complete_report.pdf.
\12\ https://obamawhitehouse.archives.gov/the-press-office/2016/10/
03/remarks-president-south-south-lawn-panel-discussion-climate-change.
---------------------------------------------------------------------------
conclusion
The development of a new leasing program for 2019-2024 presents an
opportunity to expand OCS leasing in the Arctic, the Gulf of Mexico and
the Atlantic. To be sure, this is a long process. Assuming that these
areas are ultimately included in the new program, additional
environmental and public reviews, Federal approvals, and business
determinations will have to occur before any actual on-the-water
activity takes place. Given the long lead-times associated with
development in new OCS regions, actual production would be unlikely to
take place before the mid-2030s.
This important and comprehensive process provides ample opportunity
to ensure that all issues and concerns are fully coordinated and
addressed. At the same time, the fact that the process takes such a
long time underscores why it is imperative for the Department of the
Interior to take steps today to make sure that ample opportunities are
available to meet our energy needs well into the future.
*****
The following documents were submitted for the record as supplements to
Mr. Whatley's testimony.
ATTACHMENTS
Associated Industries of Florida,
Tallahassee, Florida
July 10, 2017
Hon. Paul Gosar, Chairman,
Hon. Alan Lowenthal, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
Washington, DC 20515.
Dear Chairman Gosar and Ranking Member Lowenthal:
On behalf of Associated Industries of Florida (AIF), a state trade
association representing a broad spectrum of industry, I write today
regarding your July 12, 2017 oversight hearing on ``Evaluating Federal
Offshore Oil and Gas Development on the Outer Continental Shelf,'' I
write to convey my strong support for including the Atlantic in the
2019-2024 National Outer Continental Shelf Oil and Gas Leasing Program.
While energy development may not be occurring directly off the
Florida Atlantic coast, businesses throughout Florida will benefit in
servicing the operations while creating jobs for Florida's residents.
In addition to helping to secure access to affordable, reliable energy
for the state's residents and businesses, exploration and production
leads to good-paying jobs and generate substantial economic activity.
In addition, to ensure that Florida is adequately positioned to
bear costs related to development in adjacent waters and has access to
the same benefits as other states with offshore oil and gas activity, I
fully support the expansion of revenue-sharing to states beyond the
Gulf of Mexico, including Florida.
I appreciate your interest in this important subject and urge your
support for expanding the nation's leasing program to include the
Atlantic and expanding revenue-sharing to all states including Florida
with adjacent offshore oil and gas activity.
Sincerely,
Brewster B. Bevis,
Senior Vice President,
State and Federal Affairs.
______
Florida House of Representatives,
Tallahassee, Florida
Hon. Paul Gosar, Chairman,
Hon. Alan Lowenthal, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
Washington, DC 20515.
Dear Chairman Gosar and Ranking Member Lowenthal:
In connection with your July 12, 2017 oversight hearing on
``Evaluating Federal Offshore Oil and Gas Development on the Outer
Continental Shelf,'' I write to convey my strong support for including
the Atlantic in the 2019-2024 National Outer Continental Shelf Oil and
Gas Leasing Program.
The State of Florida is positioned to realize significant benefits
from future Atlantic oil and natural gas development. While energy
development may not be occurring directly off the Florida Atlantic
coast, Florida's businesses up and down the coast will benefit in
servicing the operations while creating jobs for Florida's residents.
In addition to helping to secure access to affordable, reliable energy
for the state's residents and businesses, exploration and production
leads to good-paying jobs and generate substantial economic activity.
Furthermore, I support the prompt approval of pending applications
to conduct Atlantic oil and gas seismic exploration and issue the
permits and necessary approvals. Obtaining an updated oil and gas
resource estimate is critical to ensuring informed decisions related to
possible future Atlantic oil and gas development. With existing
estimates based on decades-old technology, it is vital that new
exploration using modern techniques be applied to ensure economically
and environmentally-efficient activity should development ultimately
take place.
Finally, to ensure that Florida is adequately positioned to bear
costs related to development in adjacent waters and has access to the
same benefits as other states with offshore oil and gas activity, I
fully support the expansion of revenue-sharing to states beyond the
Gulf of Mexico, including Florida.
I appreciate your interest in this important subject and urge your
support for expanding the nation's leasing program to include the
Atlantic and expanding revenue-sharing to all states with adjacent
offshore oil and gas activity.
Sincerely,
Jason Fischer,
Representative, District 16.
______
Georgia House of Representatives,
Atlanta, Georgia
July 11, 2017
Hon. Paul Gosar, Chairman,
Hon. Alan Lowenthal, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
Washington, DC 20515.
Dear Chairman Gosar and Ranking Member Lowenthal:
In connection with your July 12, 2017 oversight hearing on
``Evaluating Federal Offshore Oil and Gas Development on the Outer
Continental Shelf,'' I write to convey my strong support for including
the Atlantic in the 2019-2024 National Outer Continental Shelf Oil and
Gas Leasing Program.
The State of Georgia is positioned to reap significant benefits
from future Atlantic oil and natural gas development even though we
have a small coastline. Future oil and gas exploration activities could
generate 5,000 jobs and over $2.1 billion in cumulative spending and
over $700 million in new revenue for our state--based on estimates by
Quest Analytics. This would create significant economic activity at our
ports and help improve the quality of life with new opportunities
across the state.
In addition, I also support the swift approval of pending
applications to conduct Atlantic oil and gas seismic exploration and
issue the permits and necessary approvals. It's critical that we have
updated oil and gas resource information using the latest technology to
ensure informed decision-making is being made about resource estimates
in our federal waters in the Atlantic. With existing estimates based on
decades-old technology, it is vital that new exploration using modern
techniques be applied to ensure economically and environmentally-
efficient activity should development ultimately take place.
Finally, to ensure that Georgia is adequately positioned to bear
costs related to development in adjacent waters and has access to the
same benefits that other states enjoy under federal with offshore oil
and gas activity, I fully support the expansion of revenue-sharing to
states beyond the Gulf of Mexico, including my home state.
I appreciate your interest in this important subject and urge your
support for expanding the nation's leasing program to include the
Atlantic and expanding revenue-sharing to all states with adjacent
offshore oil and gas activity.
Sincerely,
Charles E. ``Chuck'' Martin, Jr.
Representative, District 49.
______
The James Madison Institute,
Tallahassee, Florida
July 11, 2017
Hon. Paul Gosar, Chairman,
Hon. Alan Lowenthal, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
Washington, DC 20515.
Dear Chairman Gosar and Ranking Member Lowenthal:
As the President and CEO of The James Madison Institute, Florida's
oldest and largest policy think tank, our commitment to free market
principles extends to all areas of economic prosperity. It is within
this context that I write to you today.
In connection with your July 12, 2017 hearing on ``Evaluating
Federal Offshore Oil and Gas Development on the Outer Continental
Shelf,'' I wish to convey JMI's support for North American energy by
including the Atlantic in the 2019-2024 National Outer Continental
Shelf Oil and Gas Leasing Program.
Florida's economy will benefit from working to support the energy
sector while ensuring that we maintain low energy costs which help our
state especially in the tourism and transportation industries.
Furthermore, JMI supports the prompt approval of pending
applications to conduct Atlantic oil and gas seismic exploration and
issue the permits and necessary approvals. Obtaining an updated oil and
gas resource estimate is critical to ensuring informed decisions
related to possible future Atlantic oil and gas development. With
existing estimates based on decades-old technology, it is vital that
new exploration using modern techniques be applied to ensure
economically and environmentally-efficient activity should development
ultimately take place.
Sincerely,
J. Robert McClure, Ph.D.,
President and CEO.
______
North Carolina Farm Bureau Federation, Inc.,
Raleigh, North Carolina
July 10, 2017
Hon. Paul Gosar, Chairman,
Hon. Alan Lowenthal, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
Washington, DC 20515.
Dear Chairman Gosar and Ranking Member Lowenthal:
In connection with your July 12, 2017 oversight hearing on
``Evaluating Federal Offshore Oil and Gas Development on the Outer
Continental Shelf,'' North Carolina Farm Bureau coveys its strong
support for including the Mid- and South Atlantic in the 2019-2024
National Outer Continental Shelf Oil and Gas Leasing Program.
Agriculture is North Carolina's number one industry generating more
than $84 billion annual economic activity and accounting for almost one
fifth of our State's jobs. Our agriculture economy is heavily dependent
on energy. Farmers depend on oil and natural gas for growing crops,
hauling them to market, food processing, crop drying and curing, crop
protection chemicals and fertilizer production.
Based on federal estimates, the Atlantic is home to significant
resources that could provide a stable and secure source for
domestically produced energy. In addition, one study found that
Atlantic development could bring more than 55,000 jobs to North
Carolina, grow the state's economy by $31 billion, and generate $4
billion in new state revenue. Many of these benefits will promote
needed economic development in our rural, eastern counties.
Importantly, Atlantic resource estimates are based on decades-old
seismic data and are likely to increase following new seismic surveys
using modern technology. Incentives to update the data by conducting
new studies will be limited to non-existent without the likelihood or
at least the possibility of lease sales. Including the Atlantic in the
Draft Proposed Program is critical to maintaining industry interest in
conducting new studies that ultimately enable more economically and
environmentally effective exploration.
North Carolina Farm Bureau strongly supports inclusion of the
Atlantic and urges your support as well.
Sincerely,
Larry B. Wooten,
President.
______
North Carolina General Assembly,
House of Representatives,
Raleigh, North Carolina
July 10, 2017
Hon. Paul Gosar, Chairman,
Hon. Alan Lowenthal, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
Washington, DC 20515.
Dear Chairman Gosar and Ranking Member Lowenthal:
In connection with your July 12, 2017 oversight hearing on
``Evaluating Federal Offshore Oil and Gas Development on the Outer
Continental Shelf,'' I write to convey my strong support for including
the Atlantic in the 2019-2024 National Outer Continental Shelf Oil and
Gas Leasing Program.
The State of North Carolina is positioned to realize significant
benefits from future Atlantic oil and natural gas development. In
addition to helping secure access to affordable and reliable energy for
the state's residents and businesses, exploration and production of oil
and natural gas offshore of our state will lead to increased employment
opportunities and substantial economic activity. In turn, such economic
activity would also provide the state and local governments with much-
needed revenue to fund public infrastructure projects that can
contribute to further economic prosperity for our citizens.
Furthermore, I support the prompt approval of pending applications
to conduct Atlantic oil and gas seismic exploration. Obtaining an
updated oil and gas resource estimate is critical to ensuring informed
decisions related to possible future Atlantic oil and gas development.
With existing estimates based on decades-old technology, it is vital
that new exploration using modern techniques be applied to ensure
economically and environmentally prudent decisions are made.
Finally, to ensure that North Carolina is adequately positioned to
bear costs related to development in adjacent waters, and has access to
the same benefits as other states with offshore oil and gas activity, I
fully support the expansion of revenue-sharing to states beyond the
Gulf of Mexico, including North Carolina.
I appreciate your interest in this important subject and urge your
support for expanding the nation's leasing program to include the
Atlantic and expanding revenue-sharing to all states with adjacent
offshore oil and gas activity.
Sincerely,
Representative Chris Millis,
16th District.
______
Palmetto Promise Institute,
South Carolina
July 11, 2017
Hon. Paul Gosar, Chairman,
Hon. Alan Lowenthal, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
Washington, DC 20515.
Dear Chairman Gosar and Representative Lowenthal:
In connection with your July 12, 2017 oversight hearing on
``Evaluating Federal Offshore Oil and Gas Development on the Outer
Continental Shelf,'' I write to convey my strong support for including
the Atlantic in the 2019-2024 National Outer Continental Shelf Oil and
Gas Leasing Program.
The State of South Carolina is positioned to realize significant
benefits from future Atlantic oil and natural gas development. In
addition to securing a new source of affordable, reliable energy for
the state's residents and businesses, offshore exploration could bring
billions of dollars of fresh investment, create tens of thousands of
jobs, generate up to several billion dollars in new tax revenue and
lease payments, and bring all manner of new industries to the Palmetto
State.
Furthermore, I support the prompt approval of pending applications
to conduct environmentally safe seismic exploration in the Atlantic and
issue the permits and necessary approvals. Obtaining an updated oil and
gas resource estimate is critical to ensuring informed decisions
related to possible future Atlantic oil and gas development. With
existing estimates based on decades-old technology, it is vital that
new exploration using modern techniques be applied to ensure
economically and environmentally-efficient activity should development
ultimately take place.
Finally, to ensure that South Carolina is treated fairly and has
access to the same benefits as other states with offshore oil and gas
activity, I fully support the expansion of revenue-sharing to states
beyond the Gulf of Mexico, including South Carolina.
With industry advances in technology and safety, I believe our
state's cherished natural beauty and robust tourism industry can exist
in harmony with offshore energy exploration. Guided by informed
decision-making made possible by new seismic maps and expanded revenue-
sharing for Atlantic states, we could be facing a generational
opportunity for the people of South Carolina.
I appreciate your interest in this important subject and urge your
support for expanding the nation's leasing program to include the
Atlantic and expanding revenue-sharing to all states with adjacent
offshore oil and gas activity. Thank you for your consideration.
Sincerely,
Ellen E. Weaver,
President.
______
Virginia Manufacturers Association,
Richmond, Virginia
July 11, 2017
Hon. Paul Gosar, Chairman,
Hon. Alan Lowenthal, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
Washington, DC 20515.
Dear Chairman Gosar and Congressman Lowenthal:
As you explore the state of offshore oil and natural gas
development in Federal waters at your July 12, 2017 oversight hearing,
the Virginia Manufacturers Association (VMA) offers its strong support
for expanded leasing opportunities, including in the Atlantic.
The Virginia Manufacturers Association has been a leader on
Atlantic access, going back to the 2006 legislation that created the
Virginia Energy Plan which first prioritized offshore energy
exploration 50 miles off our shores and overwhelmingly passed the
General Assembly 70-20 and Virginia Senate 37-0. Again, in 2010 the VMA
championed the legislation to prioritize exploration and production of
offshore energy while also considering the impact on affected
localities, the armed forces, and the Mid-Atlantic regional spaceport,
which again sailed through the General Assembly (69-28) and Senate (32-
8) by wide margins. This consideration included dedicating potential
offshore lease royalty revenue to the VA Transportation Trust Fund, the
VA Coastal Energy Research Consortium and local government
infrastructure. Finally, in 2014, the VMA supported amendments to the
VA Energy Plan to dedicate offshore lease royalties to the Virginia
Offshore Energy Emergency Response Fund. All the while, we have
advocated for Federal offshore lease royalty revenue sharing with
Virginia.
The reasons for the strong history of support by VMA and members of
both parties in the Commonwealth are simple. The economic benefits and
energy independence that offshore energy, including wind energy, can
bring to Virginia, the Mid-Atlantic and Southeast U.S. are badly
needed. One study found that for Virginia alone, Atlantic-wide oil and
natural gas development could generate nearly 25,000 jobs, $16.9
billion in economic activity, and nearly $2 billion in new state
revenue. The industry has also made incredible technological advances
to improve environmental safety. Simply put, we disagree with the false
narrative that you cannot develop offshore energy safely. Virginia can
put the best minds and technology to work for our economy and our
environment, and develop our offshore energy without harming the
environment.
For Virginia's 5,000+ manufacturers, the development of these
resources could mean new orders and long-term affordable energy prices
for an industry that contributes $43 billion to the gross state product
and accounts for over 84 percent of the state's manufactured goods
exported to the global economy. More stable and affordable energy
supplies also mean lower overhead, more capital available to hire
Virginians, and manufactured products that are made in Virginia.
Moreover, with the domestic energy renaissance, foreign energy
imports still account for over half of our nation's total daily supply.
Yet, the untapped Atlantic may hold enough resources to reduce our
imports from the Persian Gulf by more than 60 percent, which could
significantly move the needle toward greater U.S. energy self-
sufficiency.
Opening up the Atlantic not only makes sense from an economic and
national security perspective, it also makes sense for our environment.
As the Obama administration itself noted in 2016, in addition to losing
out on as much as $37 billion in incremental net benefits, foregoing
the previously proposed Mid- and South Atlantic lease sale could cause
between $1.6 billion and $2.9 billion in negative incremental
environmental and social costs, primarily due to greater reliance on
other sources for energy.
These are just a few of the reasons why leaders of both parties
helped make it the official policy of the Commonwealth to support the
exploration and development of offshore energy. VMA appreciates the
opportunity to provide input as you engage in this important issue, and
urges your support for expanding leasing access to the Atlantic.
Sincerely,
Brett A. Vassey,
President & CEO.
______
Dr. Gosar. Thank you for your testimony.
The Chair now recognizes Dr. Knapp for his testimony.
STATEMENT OF JAMES H. KNAPP, Ph.D., PROFESSOR, SCHOOL OF THE
EARTH, OCEAN, AND ENVIRONMENT, UNIVERSITY OF SOUTH CAROLINA,
COLUMBIA, SOUTH CAROLINA
Dr. Knapp. Good morning, Chairman Gosar, Ranking Member
Lowenthal, and distinguished members of the House Subcommittee
on Energy and Mineral Resources. It is a pleasure and an honor
to appear again before this Committee, and I applaud you for
holding this hearing today.
For the record, I am James H. Knapp, a Professor in the
School of the Earth, Ocean, and Environment at the University
of South Carolina in the Great Palmetto State. My comments
today represent my own views, and should not be construed to
reflect those of my institution or entities that support our
research.
I will summarize my written testimony in these opening
comments, which I submit for the record. And today I would like
to emphasize three points.
The premise that offshore development is inconsistent with
other uses and activities in the near and offshore is a
demonstrably false one, as Ms. LeBlanc has eloquently pointed
out.
Secondly, even with modern technology, discovery of new
energy resources remains a challenging and expensive
proposition, as it has from its earliest days.
And third, informed decisions about offshore development
potential can only be made with new state-of-the-art data.
By way of background, I am an environmentalist through my
upbringing in California during the 1960s and 1970s. I was in
Southern California when the Santa Barbara spill occurred. I am
an earth scientist through my academic training at Stanford and
MIT, and for most of the past decade, I have been a vocal
advocate for the acquisition of new seismic data on the
Atlantic OCS.
I believe an all-of-the-above strategy is the only sensible
and responsible approach to meeting the energy demands of a
vibrant U.S. and world economy, going forward.
In the spirit of full disclosure, we currently receive
Federal grant support from both the Bureau of Ocean Energy
Management, or BOEM, and the National Energy Technology
Laboratory of the U.S. Department of Energy. Our BOEM funding
supports evaluation of the sea bed and subsurface of offshore
areas of South Carolina for establishing wind energy
infrastructure.
Through funding from the Department of Energy, we, along
with colleagues from a number of organizations, are evaluating
the offshore geologic storage potential of CO2 as a
means of mitigating future fossil fuel carbon emissions. The
Atlantic OCS, in particular, appears to offer significant
potential for CO2 storage, in part because previous
exploratory drilling has not compromised potential reservoirs
suitable for storage.
At the request of the former Minerals Management Service,
and subsequently BOEM, the Department of Defense prepared an
evaluation of compatibility of offshore oil and gas development
with DoD activities. The 2010 analysis concluded that no more
than 1 percent of the entire Federal OCS was unsuitable for oil
and gas development, and an additional 2 percent was unsuitable
for permanent oil and gas surface structures.
The 2015 study arrived at similar numbers for areas
included within the 2015 draft proposed plan, concluding that
more than 96 percent of the OCS was either unrestricted or had
site-specific restrictions.
Even with modern technology, the discovery of subsurface
energy reserves remains challenging. By way of example, I can
cite the history of petroleum exploration in Florida, which
began with the first well in Escambia County in 1900. It was
more than 50 years and hundreds of exploration wells later that
the first discovery of oil was made in southern Florida. By
1970, when the Jay Field was discovered in the Florida
Panhandle, it was the largest domestic discovery in the United
States since the giant Prudhoe Bay discovery in the 1960s.
As is typically the case with such petroleum data, these
Florida wells played a significant role in establishing the
scientific basis for plate tectonic theory during the 1960s,
documenting based on the rocks discovered at depth that North
America and Africa were once connected, and the Atlantic Ocean
had subsequently opened where the continents split.
While new seismic methods have evolved particularly for the
offshore, the challenge to identify new energy reserves remains
a proposition with, at best, a 70 percent success rate.
Obviously, neither seismic surveying nor offshore exploration
are new to the Atlantic OCS. More than 240,000 line miles of 2D
seismic reflection were acquired off the shores of the U.S.
Atlantic between the late 1960s and late 1980s, in support of
an earlier phase of petroleum exploration.
In preparation for these activities, extensive
environmental impact studies were carried out by Federal
agencies, much as they are today, evaluating the potential
impacts of seismic surveying and offshore drilling on tourism,
commercial and recreational fishing, marine shipping, and
commerce. These other uses of the marine and near-shore
environment have continued apace over the last 50 years,
despite the previous efforts for offshore energy development,
belying the claim that such activities are mutually exclusive.
In conclusion, I am encouraged that the new Administration
appears poised to reinstate an opportunity for market forces to
determine whether offshore development of the Atlantic OCS is
warranted. Those decisions can only be made in an informed way
on the basis of new, state-of-the-art seismic surveys, such
that the Federal Government may fairly execute its statutory
obligation to adequately evaluate the resource potential. I
will yield back my time.
[The prepared statement of Dr. Knapp follows:]
Prepared Statement of James H. Knapp, Ph.D., Professor in the School of
the Earth, Ocean, and Environment at the University of South Carolina
introduction
Good morning, Chairman Gosar, Chairman Bishop, Ranking Member
Lowenthal, and honorable members of the House Subcommittee on Energy
and Mineral Resources. It is a pleasure and honor to appear again
before this Committee, and I applaud you for holding this hearing
today. For the record, I am James H. Knapp, Professor in the School of
the Earth, Ocean, and Environment at the University of South Carolina,
in the great Palmetto State. My comments today represent my own views,
and should not be construed to reflect those of my institution or
entities that support our research. I will summarize my written
testimony in these opening comments, which I submit for the record.
Today I would like to emphasize three points:
The premise that offshore development is inconsistent with
other uses and activities in the near and offshore is a
demonstrably false one;
Even with modern technology, discovery of new energy
resources remains a challenging and expensive proposition,
as it has from its earliest days; and
Informed decisions about offshore development potential
can only be made with new state-of-the-art data.
background
By way of background, I am an environmentalist through my
upbringing in California during the 1960s and 1970s, an Earth scientist
through my academic training at Stanford and M.I.T., and for most of
the past decade, a vocal advocate for the acquisition of new seismic
data on the Atlantic OCS. I believe an all-of-the-above strategy is the
only sensible and responsible approach to meeting the energy demands of
a vibrant U.S. and World economy going forward.
compatible uses of ocs
In the spirit of full disclosure, we currently receive Federal
grant support from both the Bureau of Ocean Energy Management (BOEM)
and the National Energy Technology Laboratory of the U.S. Department of
Energy (DoE). Our BOEM funding supports evaluation of the seabed and
subsurface of offshore areas of South Carolina for establishing wind
energy infrastructure (Figure 1). Through funding from DoE, we along
with colleagues from a number of organizations are evaluating the
offshore geologic storage potential of CO2 as a means of
mitigating future fossil fuel carbon emissions (Figure 2). The Atlantic
OCS in particular appears to offer significant potential for
CO2 storage, in part because previous exploratory drilling
has not compromised potential reservoirs suitable for storage.
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 1. Map of offshore wind energy study area (red boxes) funded
by the Bureau of Ocean Energy Management, offshore South Carolina.
Marine geophysical methods are used to characterize the seabed and
subsurface for suitability of offshore wind energy installations. Study
is a collaboration between Coastal Carolina University and the
University of South Carolina.
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 2. Location map of the Southeast Offshore Storage Resource
Assessment (SOSRA) study, funded by the National Energy Technology
Laboratory (NETL) of the U.S. Department of Energy, showing (A) map of
point sources of CO2 in the eastern United States (NATCARB
database) and (B) location of legacy marine seismic reflection and well
data used to characterize reservoir storage potential in the offshore.
Study area extends from offshore Delaware to offshore Louisiana, and
includes collaborators from Virginia Polytechnic Institute, Virginia
Department of Mines, Mining, and Energy, Oklahoma State University, the
South Carolina Geological Survey, the Alabama Geological Survey, and
coordinated by the Southern States Energy Board.
At the request of the former Minerals Management Service (MMS) and
subsequently BOEM, the Department of Defense prepared an evaluation of
compatibility of offshore oil and gas development with DoD activities
(Figure 3). The 2010 analysis concluded that no more than 1 percent of
the entire Federal OCS was unsuitable for oil and gas development, and
an additional 2 percent was unsuitable for permanent oil and gas
surface structures. The 2015 study arrived at similar numbers for areas
included within the 2015 Draft Proposed Plan, concluding that more than
96 percent of the OCS was either unrestricted (67.2 percent) or had
site-specific restrictions (29.5 percent).
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 3. Data from (1) Report on the compatibility of Department
of Defense (DoD) activities with oil and gas resource development on
the Outer Continental Shelf (OCS) (2010); and (2) DoD Mission
Compatibility Planning Assessment: BOEM 2017-2022 Outer Continental
Shelf (OCS) Oil and Gas Leasing Draft Proposed Program (2015).
challenge of exploration
Even with modern technology, the discovery of subsurface energy
reserves remains challenging. By way of example, I can cite the history
of petroleum exploration in Florida, which began with the first well in
Escambia County in 1900. It was more than 50 years and hundreds of
exploration wells later that the first discovery of oil was made in
southern Florida, in the Sunniland trend. In 1970, when the Jay field
was discovered in the Florida panhandle, it was the largest domestic
discovery in the United States since the giant Prudhoe Bay discovery in
the 1960s. As is typically the case with such petroleum data, these
Florida wells played a significant role in establishing the scientific
basis for plate tectonic theory during the 1960s, documenting based on
the rocks discovered at depth that North America and Africa were once
connected, and the Atlantic Ocean had subsequently opened where the
continents split. While new seismic methods have evolved, particularly
for the offshore, the challenge to identify new energy reserves remains
a proposition with at best a 70 percent success rate.
modern seismic surveying
Obviously, neither seismic surveying nor offshore exploration are
new to the Atlantic OCS. More than 240,000 line miles (385,000 line km)
of 2-D seismic reflection data were acquired off the shores of the U.S.
Atlantic between the late 1960s and late 1980s (Figure 4), in support
of an earlier phase of petroleum exploration. In preparation for these
activities, extensive environmental impact studies were carried out by
Federal agencies, much as they are today, evaluating the potential
impacts of seismic surveying and offshore drilling on tourism,
commercial and recreational fishing, and marine shipping and commerce.
These other uses of the marine and near-shore environment have
continued apace over the last 50 years, despite the previous efforts
for offshore energy development, belying the claim that such activities
are mutually exclusive.
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 4. Map of legacy 2-D seismic data on the Atlantic OCS
(courtesy of BOEM.) Approximately 380,000 line km (240,000 line miles)
of 2-D seismic data were collected in the Atlantic OCS between 1966 and
1988.
Despite the enormous scientific value of these legacy seismic data,
fully 80 percent of the territory that was originally included in the
draft 2017-2022 5-year plan has never been evaluated with commercial
seismic surveys (Figure 5). Furthermore, modern seismic surveys, driven
globally by exploration activities over the last two decades (Figure
6), have ushered in fundamentally new models for how continents break
and continental margins evolve.
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 5. Area within Mid- and South Atlantic OCS Planning Areas
originally included in the BOEM Draft Proposed Plan for 2017-2022. Red
boundary represents 50 mile buffer zone from state waters. Fully 80
percent of area which was under consideration for exploration leases
has never been the subject of commercial seismic surveys. (Produced at
the Tectonics and Geophysics Lab at USC with information from BOEM.)
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 6. Map showing current offshore exploration efforts in the
Atlantic Basin. Conspicuously absent are the Atlantic continental
margin and Eastern Gulf of Mexico of the United States. (Courtesy of G.
Steffens, Shell Oil Co.)
conclusion
In conclusion, I am encouraged that the new administration appears
poised to reinstate an opportunity for market forces to determine
whether offshore development on the Atlantic OCS is warranted. Those
decisions can only be made in an informed way on the basis of new,
state-of-the-art seismic surveys, such that the Federal Government
might fairly execute its statutory obligation to adequately evaluate
the resource potential of this essentially frontier petroleum province,
and the private sector might pursue environmentally responsible energy
development in the national interest.
______
Questions Submitted for the Record by Rep. Gosar to Dr. James Knapp,
Professor, University of South Carolina
I thank the Hon. Chairman Gosar for the questions, and the
opportunity to register these responses on the record. At the risk of
sacrificing brevity for clarity, I will endeavor to support my
responses with some appropriate background and references.
Question 1. What is the difference between large air-gun seismic
surveys being proposed for the Atlantic versus seismic surveys in other
regions of the U.S. OCS?
Answer. The short answer is, the design of the proposed seismic
surveys for the Atlantic Outer Continental Shelf (OCS) (1) does not
differ significantly from those previously carried out in other regions
of the U.S. OCS, and (2) is appropriate, including the size of the
airgun source, for the objective of resource potential evaluation.
Broadly speaking, geophysical surveying can be thought of as the
process of remotely sensing those parts of the Earth (generally the
subsurface, which is not readily observable directly), based on their
physical properties (composition, density, rigidity, shear strength,
porosity, fluid composition, magnetic susceptibility, etc.) and
variables of state (temperature and pressure). Accordingly, the design
of any geophysical survey is typically based on a combination of (a)
the scale or size of the inferred target, (b) the anticipated depth of
the target, and (c) the physical properties of interest. Seismic
surveying is only one, but arguably the most powerful, geophysical
surveying technique, providing quantitative information on the rocks,
sediments, and fluids in the subsurface on a regionally significant
spatial scale.
``Seismic surveying'' in the context of the U.S. OCS refers
typically to the method of ``seismic reflection surveying,'' wherein
acoustic energy (sound) is introduced to the subsurface, and is
recorded at or near the surface as it is ``reflected'' off boundaries
in the subsurface between bodies with differing physical properties.
While the technique has evolved considerably since the earliest
pioneering marine seismic surveys at the mouth of Chesapeake Bay (e.g.,
Ewing et al, 1937), the theoretical basis of the approach remains
unchanged. In particular, seismic reflection surveying has become the
essential tool for the evaluation of subsurface resource potential, as
it provides not only a graphic image of the features in the subsurface
and their geometric relationships, but also a quantitative measure of
the physical properties thereof.
Extensive marine seismic reflection surveys were carried out over
the past half century within the U.S. Exclusive Economic Zone (EEZ)
(Figure 1; Triezenberg et al, 2016), as well as globally (e.g. Figure
2, for northwestern Europe). The primary technological innovation since
commercial seismic reflection surveys were last recorded on the
Atlantic OCS during the 1970s and 1980s is the evolution from 2-D to 3-
D surveys. Whereas 2-D surveys provide a vertical cross-section through
the subsurface, 3-D surveys provide a volumetric image, much as modern
medical tomographic imaging does with the human body. While marine 3-D
seismic surveys are now commonplace worldwide, (1) only one small
commercial 3-D survey was ever collected on the Atlantic OCS before
moratoria were implemented, and (2) both survey designs have relevance
in evaluating resource potential on and exploring for petroleum
deposits within the essentially frontier province of the Atlantic OCS.
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
.epsFigure 1. Map of 2-D and 3-D marine seismic reflection surveys in
U.S. waters (pink lines), acquired by or contributed to U.S. Department
of the Interior agencies, downloaded on 26 July 2017 from the National
Archive of Marine Seismic Surveys, Pacific Coastal and Marine Science
Center of the U.S. Geological Survey (https://walrus.wr.usgs.gov/namss/
search/). 3-D seismic surveys (150) cover >121,000 km2, and
2-D seismic surveys (32,400 tracklines) cover >2,282,490 line km
(Triezenberg et al, 2016). Included are surveys in the Atlantic Ocean,
Pacific Ocean, Gulf of Mexico, and territorial waters of Alaska and
Hawaii, spanning more than six decades.
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 2. Map of proprietary 2-D and 3-D marine seismic reflection
surveys in NW Europe, available from Spectrum Geo Ltd., downloaded on
26 July 2017 from their online interactive seismic data library (http:/
/www.spectrumgeo.com/seismic-data-library/multi-client-library/
interactive-map). Each color in a given area represents a different
marine seismic reflection survey.
Despite the acquisition of more than 385,000 line km of marine
seismic reflection data in the Atlantic OCS during the late 1960s to
the late 1980s (Post et al, 2012), this province is still considered a
frontier basin. Thousands of exploration wells have been drilled
onshore along the Atlantic margin of the United States, but only 60
such wells have been drilled in the Atlantic OCS. Moreover, as much as
80 percent of the Atlantic OCS territory that was under consideration
for leasing in the 2017-2022 Draft Proposed Plan (Figure 3) has never
been the subject of commercial seismic surveying. It is therefore
difficult to understand how (1) the Federal Government could be
fulfilling its statutory obligation to evaluate fairly the resource
potential of, or (2) industry could realistically assess the viability
of exploration of the Atlantic OCS in the absence of new, state-of-the-
art seismic reflection surveys. While this region may yet prove to be
unprospective for commercial resource development, such a determination
could only be informed by new data and analyses.
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 3. Area within Mid- and South Atlantic OCS Planning Areas
originally included (and later removed) in the Bureau of Ocean Energy
Management (BOEM) Draft Proposed Plan for 2017-2022. Red boundary
represents 50-mile buffer zone from state waters. Fully 80 percent of
the area which was under consideration for exploration leases has never
been the subject of commercial seismic surveys. (Produced at the
Tectonics and Geophysics Lab at UofSC with information from BOEM.)
Question 2. Does seismic harm marine mammals?
Answer. As a Professor of geology and geophysics, and a former
employee in the petroleum industry, I have familiarity with a number of
aspects of marine seismic acquisition and offshore oil and gas
exploration and development. I cannot claim, however, to be an
authority on marine biology or marine mammal behavior. Having said
that, I am familiar with some of the peer-reviewed scientific
literature on the interaction of marine life with marine seismic
operations. Gordon and others (2004) provided a useful summary of
observations of behavioral change in various marine mammal species in
response to airguns and seismic surveys (Figure 4). While acknowledging
effects such as changes in vocalization, these authors concluded that
avoidance was the primary response documented across a variety of
species and in a geographic area of global extent where the studies
were conducted (Gordon et al, 2004).
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 4. Summary of studies from the scientific literature of
observed effects of marine seismic operations on various marine mammal
species (Gordon et al, 2004).
Perhaps some of the most compelling data on the putative adverse
effect of acoustic energy on marine mammals comes from the Federal
Government. Established in 1991, The Working Group on Marine Mammal
Unusual Mortality Events (UME) under the aegis of the Office of
Protected Resources with the National Oceanic and Atmospheric
Administration (NOAA) has formally identified 63 marine mammal UME in
U.S. waters over the last 26 years (Figure 5). In most cases where a
cause has been determined (32), infections and/or biotoxins were
indicated; of the 63 UME, not even one has been attributed to marine
seismic operations.
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 5. Cause of reported Unusual Mortality Events (UME) in U.S.
waters (63 total) between 1991 and 2017 (NOAA Fisheries Office of
Protected Resources; downloaded on 26 July 2017 from http://
www.nmfs.noaa.gov/pr/health/mmume/). While the cause of a significant
number (31) of UME remains ``undetermined/pending,'' only three have
been attributed to ``human interactions,'' and in no instance has a UME
been attributed to marine seismic operations.
A graph of the incidence of UME by geographic region is similarly
instructive (Figure 6). Of the total 63 events documented for the
period 1991-2017, the majority are nominally equally distributed
between the Atlantic, Pacific, and Gulf of Mexico, during a period when
extensive commercial seismic surveys have been conducted in the GOM,
but not on the Atlantic and Pacific margins. One might reasonably
expect a spatial and temporal correlation of UME with marine seismic
operations were there a causal relationship. These data suggest the
contention that marine seismic surveys result in mass mortality events
of marine mammals is likely a chimera.
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Figure 6. Percentage of reported Unusual Mortality Events (UME) in
U.S. waters (63 total) by geographic area between 1991 and 2017 (NOAA
Fisheries Office of Protected Resources; downloaded on 26 July 2017
from http://www.nmfs.noaa.gov/pr/health/mmume/). During the observation
period, extensive commercial seismic surveys have been conducted in the
Gulf of Mexico, but not in the Atlantic or Pacific OCS.
While not from the peer-reviewed literature, BOEM Chief
Environmental Officer William Brown was categoric in his statement on
the issue: ``To date, there has been no documented scientific evidence
of noise from airguns used in geological and geophysical (G&G) seismic
activities adversely affecting marine animal populations or coastal
communities. This technology has been used for more than 30 years
around the world. It is still used in U.S. waters off of the Gulf of
Mexico with no known detrimental impact to marine animal populations or
to commercial fishing'' (Brown, 2014). Brown continued in a follow-on
statement (Brown, 2015) that the lack of evidence for adverse
population-level effects on marine mammals does not conclusively prove
they do not occur, but ``since 1998, BOEM has invested over $50 million
on protected species and noise-related research, including marine
mammals.'' Given the historic level of marine seismic acquisition, both
in U.S. waters and globally, one might reasonably be led to the
conclusion that the preponderance of data suggests there is no
definitive correlation between marine seismic activities and
detrimental impacts to marine mammal populations.
Question 3. Does seismic harm fish?
Answer. As with the preceding question concerning marine mammals, I
cannot claim to be an authority on marine biology. Unlike many who
would claim to be authorities on marine acoustics and geophysical
methods, apparently without credential, I would not presume to have a
comprehensive knowledge of this subject. I would say I am unaware of a
credible body of scientific literature demonstrating a clear causal
relationship between marine seismic operations and detrimental impacts
on fish populations. Brown (2014) included ``marine animal
populations'' in his statement on the lack of documented scientific
evidence for such a relationship, which would include fish.
As was mentioned during the hearing, a recent study by McCauley et
al (2017) suggests there is a direct and mortal effect of seismic
airgun sources on zooplankton. Upon closer inspection, this study
appears flawed on a number of levels, even without knowledge of the
biology of zooplankton. Statistical analysis on an insufficient data
sample, inconsistencies between the raw and filtered data presented,
and unexplained variations in sample size between exposed and control
populations raise serious questions about the scientific methodology of
this study. Were these results robust, one might reasonably expect that
the oceans would now be devoid of life after many decades of marine
seismic operations worldwide.
Cited References/Sources:
Brown, W.Y., 2014, Science notes: The science behind the decision,
Bureau of Ocean Energy Management, 3 p.
Brown, W.Y., 2015, Science notes: Applied science for informed decision
making, Bureau of Ocean Energy Management, 2 p.
Ewing M., Crary, A.P., and Rutherford, H.M., 1937, Geophysical
investigations in the emerged and submerged Atlantic Coastal Plain,
Part I: Methods and Results, Bull. Geol. Soc. Am., v. 48, p. 753-802.
Gordon, J., Gillespie, D., Potter, J., Frantzis, A., Simmonds, M.P.,
Swift, R., and Thompson, D., 2004, A review of the effects of seismic
surveys on marine mammals, Marine Technology Society Journal, v. 37, n.
4, p. 16-34.
Marine Mammal Unusual Mortality Events, Office of Protected Resources,
National Marine Fisheries Service, National Oceanographic and
Atmospheric Administration, U.S. Department of Commerce (http://
www.nmfs.noaa.gov/pr/health/mmume/events.html).
McCauley, R.D., Day, R.D., Swadling, K.M., Fitzgibbon, Q.P., Watson,
R.A., and Semmens, J.M., 2017, Widely used marine seismic survey air
gun operations negatively impact zooplankton, Nature Ecology &
Evolution, Volume 1; Article Number: 0195, DOI: 10.1038/s41559-017-
0195.
National Archive of Marine Seismic Surveys, Pacific Coastal and Marine
Science Center, U.S. Geological Survey, U.S. Department of the Interior
(https://walrus.wr.usgs.gov/namss/).
Post, P., Klazynski, R., Klocek, E., DeCort, T., Riches, T., Li, K.,
Elliott, E., and Poling, R., 2012, Assessment of undiscovered
technically recoverable oil and gas resources of the Atlantic Outer
Continental Shelf 2011 as of January 1, 2009, BOEM 2012-016, 39 p.
Triezenberg, P.J., Hart, P.E., and Childs, J.R., 2016, National Archive
of Marine Seismic Surveys (NAMSS): A USGS data website of marine
seismic reflection data within the U.S. Exclusive Economic Zone (EEZ):
U.S. Geological Survey Data Release, doi: 10.5066/F7930R7P.
______
Dr. Gosar. I thank the gentleman. I thank the panel for
their testimony. Reminding the Members that the Committee Rule
3(d) imposes a 5-minute limit on questions, the Chairman will
now recognize Members for questions they may wish to ask the
witnesses.
I will recognize myself.
Ms. MacGregor, the Mid and South Atlantic OCS planning
areas were not included in the previous 2017-2022 5-year plan.
The Beaufort and Chukchi Seas off of northern Alaska were also
not included. Why has the new Administration chosen to
reconsider these areas at this time?
Ms. MacGregor. Thank you for the question. Just to clarify,
when it comes to initiating the new 5-year plan, we are at the
very early stages of a very long process that is outlined in
the Outer Continental Shelf Lands Act. So, for those who have
mentioned this earlier in their testimony, we are starting in
the same place that all administrations have always started,
which is all 26 planning areas are on the table, and will be
further evaluated thoroughly.
The Arctic and Mid-Atlantic planning areas are areas that
in the past have enjoyed wide bipartisan support, and I believe
that is one of the reasons why those have been selected for
further review.
Dr. Gosar. How would they be considered differently?
Ms. MacGregor. They will be considered equally among all 26
planning areas.
Dr. Gosar. When developing a new OCS leasing plan, how does
BOEM engage with state leaders, coastal communities, and other
stakeholders?
Ms. MacGregor. BOEM and the Department are very, very
engaged with all stakeholders, especially governors and local
and public leaders. It is actually written into Federal law
that BOEM work and receive feedback from governors. We have
already sent out our initial letters requesting feedback on
that, and we will be working with the public every step of the
way.
The process has 255 days of statute-required public
comment, as well.
Dr. Gosar. So, plenty of access to have opportunity to
voice your opinion?
Ms. MacGregor. Absolutely. We welcome everyone's input.
Dr. Gosar. Mr. Whatley, should the Mid and South Atlantic
planning regions be leased and developed, and how are the
Atlantic coastal states and communities prepared to handle the
offshore infrastructure?
Mr. Whatley. Well, the first part of the work that would be
done, in terms of once leasing blocks are put out there, would
be evaluations of the area. Those will be run mostly out of the
ports, such as Norfolk in Virginia; Charleston in South
Carolina; Savannah; Wilmington. And those states will have
time.
It is important to note what Kate mentioned with the
timelines in the plan, because once the leasing is done, there
is a 7- to 10-year time period where they evaluate the lease
blocks, where they do exploratory drilling. And then,
ultimately, you would get to a production point. The states
would know that this is coming and have the opportunities to
develop the infrastructure that they need in those areas.
Dr. Gosar. How would the states benefit from the leasing
and production?
Mr. Whatley. The jobs and the economic impacts that would
take place for exploration and production are very significant.
As I have mentioned in my testimony, the numbers that we have
seen in the Atlantic are that it would contribute, overall,
about 840,000 jobs, $550 billion in increased economic
activity, and $395 billion in increased government revenues.
And those would be, obviously, enhanced if revenue share
was put into place. But we think that the economic drivers for
the activity that would take place in the ports and in the
states is significant.
Dr. Gosar. Mr. Whatley, you work with many business
associations and State Congress folks throughout the Atlantic
states who have expressed interest in exploration and
development off their coasts. What value do these groups see in
the OCS development off the Atlantic?
Mr. Whatley. I think the primary benefits that they see are
twofold. First, there are the jobs that are going to be
created, the increased spending that would be done in the
state, and the government revenues that would flow from that.
But also, it is very important in terms of the economic
benefits of lower fuel prices.
So, when you talk about gasoline and diesel prices being
significantly lower because of American production, when you
talk about manufacturing that is coming back to the United
States because of lower natural gas and electricity prices,
those have long-term benefits for it.
We understand that energy prices are low today, and that is
great. But the offshore opportunity gives us a long-term
planning horizon for these companies to understand that the
energy prices will continue to be low, going forward.
Dr. Gosar. I appreciate it.
Ms. LeBlanc, Louisiana is the Number one state for OCS
production, and is home to an advanced energy industry. But
Louisiana is also known as a sportsman's paradise. How does a
state reconcile a robust offshore oil and gas industry and
environmental stewardship? I mean, I want my cake and eat it,
too. I like clean air, I like clean water, but I also like to
do my hunting and fishing, and like to have my fuels to get me
there.
Ms. LeBlanc. Thank you, Chairman, for the question. I think
in south Louisiana, we are very blessed with an abundance of
natural resources, and that includes our offshore oil and gas
production, as well as the hunting, the fishing, and the
wildlife watching. And we have taken tremendous strides to
protect our environment and to allow it so that we can have
multiple stakeholders and multi-use of our environment in south
Louisiana.
We have done a tremendous effort of balancing those two. We
have a very strong coastal restoration program right now, and
it is just really about balancing energy production and coastal
stewardship, environmental stewardship in order to be the
sportsman's paradise capital of the world.
Dr. Gosar. So, it is not mutually exclusive to have both?
Ms. LeBlanc. No, absolutely not. We are not an either-or
state, and we do not have to sacrifice our environment for
offshore production. I think that some of the statistics I
provided in my testimony demonstrate that.
I know a lot of folks are very concerned about tourism.
And, you know, Louisiana is a very, very strong tourist state,
as are the other Gulf Coast states that support oil and gas.
Dr. Gosar. Thanks, Ms. LeBlanc. I now recognize the Ranking
Member for his questions.
Dr. Lowenthal. Thank you. I just want to frame it, just try
to understand if I am clear, as I ask my questions.
The 2017-2022 Federal offshore oil and gas development on
the Outer Continental Shelf, that plan, as I understand, was
just completed in January of this year, 2017, the plan that we
are now about starting the process to undo. It did not go into
effect until last month.
It talked about prohibiting oil and gas development on the
Atlantic, Pacific, and Arctic, except for one area, I believe,
on Cook Island, and it promoted oil and gas development in the
Gulf, by saying that the plan would have a more strategic and
sustainable place where we would have our oil and gas
development. It was not one-sided, it was really thoughtful.
So, now we are going to undo that. I really want to know
what is the basis for that. My first question is to Ms.
MacGregor.
The amount of oil produced offshore in 2016 was 17 percent
higher than in 2008. In fact, production hit a record high
amount in January of this year, and is still rising. So, the
question is, are all these offshore oil companies currently
complying with the safety regulations and policies that were
put into place after Deepwater Horizon?
Ms. MacGregor. Sir, all of the regulations that are on the
books that have been enacted are being adhered to and being
inspected to, specifically.
As for your figures, yes, Fiscal Year 2016 we had
significant oil production. Fiscal Year 2009 was actually
higher.
Dr. Lowenthal. That is true. But we know that was the
highest year. Then last year was the second highest, so we are
talking about still very high oil and gas production. Is that
not true?
Ms. MacGregor. That is true. Production is increasing, and
I think that is such an important point, because----
Dr. Lowenthal. Under the existing planning process, and the
new planning that we have in place, production is increasing.
Ms. MacGregor. Actually, you struck that point exactly. It
is under existing leases, and most of the production that came
on-line, some of the big projects, such as Stones in 2016 that
came on-line, it was leased in 1996, and that is why leasing is
so incredibly important.
Dr. Lowenthal. And we still have large numbers of leases.
But I guess we talked about earlier on the onshore that have
been permitted, and have been approved but not implemented.
Ms. MacGregor. Right. When we lease, whether it is the
BLM--we provide a 10-year lease term offshore. The lease terms
are 5, 7, and 10 year terms, and companies who bid and acquire
that lease are able to develop on it. But----
Dr. Lowenthal. I appreciate it, and I am going to
interrupt----
Ms. MacGregor. Oh, sorry.
Dr. Lowenthal. I apologize. But my question really is not
about the leasing.
My question, as I asked you about complying with the safety
regulations under Deepwater Horizon, you said yes, they are.
But now Interior is currently reviewing or has recently
reviewed those regulations and policies to determine if they,
and let me quote, ``potentially burden the development of
energy resources.'' Is that correct?
Ms. MacGregor. It is correct. BOEM, BSEE, and Department-
wide, we are reviewing all of our regulations.
Dr. Lowenthal. So, you are reviewing those, and given that
oil production is at a high and has been increasing, and
companies are meeting all--as you pointed out--the new safety
regulations and policies, it does not appear that these
policies are burdening energy development. Is that not true?
Ms. MacGregor. Actually, we are still in the process of
evaluating all of these policies.
Dr. Lowenthal. But if you look at the data, and you get
back, there does not seem to be any reduction. Or we have not
seen these new policies that have had a negative impact----
Ms. MacGregor. Well, frankly, several of the policies, such
as the Arctic Rule or Well Control Rule--for instance, in the
Arctic Rule there is no Federal offshore production in the
Arctic. So, we don't know how that is actually working.
Dr. Lowenthal. Got it.
Ms. MacGregor. Well control is the same way. It was just
put into place last year, there is somewhat of a lag between
implementing policies on safety, and actually seeing how they--
--
Dr. Lowenthal. How are you going to measure benefits? How
will you be measuring the benefits?
Ms. MacGregor. Well, the Executive Order by the President
put forward some pretty straightforward requirements when it
comes to evaluating the regulations. When it came to benefits,
it simply says we are going to evaluate based on imposed costs
that may or may not exceed benefits.
But I guess, at the end of the day, we will adhere to all
requirements by the government agencies.
Dr. Lowenthal. Will you be making them public before you
make any regulatory changes?
Ms. MacGregor. When we make regulatory changes, whether it
is a recision, revision, or anything to regulations, we will be
adhering to the APA process, which requires----
Dr. Lowenthal. So, you will be providing the public with a
cost benefit analysis publicly before you make any----
Ms. MacGregor. Yes, it is part of the Administrative
Procedure Act. We have to not only provide an RIA, but also
look at providing notice and comment, which I know that in the
past was a big concern for several folks raising regulations
that were finalized in the last administration that in some
cases did not provide the ability to have notice and comment.
So, we will absolutely be ensuring that there is comment on
those.
Dr. Lowenthal. Thank you. Thank you for your testimony, and
I yield back.
Dr. Gosar. I thank the gentleman. The gentleman from
Colorado, Mr. Lamborn, is recognized for his 5 minutes.
Mr. Lamborn. Thank you, Mr. Chairman, and thanks for having
this hearing.
Ms. MacGregor, thanks for coming back to the Committee. I
have a question I would like to ask you, and then turn to Dr.
Knapp on the same question.
There are concerns over the ecological impact of seismic
testing. How are seismic surveys required to mitigate potential
environmental effects of seismic testing?
Ms. MacGregor. Thank you for that question. Seismic is, of
course, the scientific endeavor of using acoustic sound to
determine what is occurring below the sea bed, and it is used
for a multitude of purposes. Aside from just determining where
hydrocarbons are, it also is used for aiding and siting
renewable energy projects offshore, locating potential sand and
gravel resources that we utilize in areas like Florida to help
in coastal restoration, and identifying geological hazards.
Right now, there are a multitude of mitigation techniques
that are employed to make sure that we are working to be
respectful of the marine mammals that are also in that
environment. Many companies, I believe, are required to have
marine mammal observers on board to simply point out when there
is some sort of occurrence of a marine mammal.
You have to go through a very thorough permitting process
through the Department, and also through partner agencies like
the Department of Commerce, that has to issue an incidental
harassment authorization. But there are very many mitigation
techniques that are used right now.
Mr. Lamborn. Dr. Knapp, can you add to that?
Dr. Knapp. Thank you for the question, former Chairman
Lamborn. I will not reiterate what Ms. MacGregor has already
said, but I would add to that, as I tried to bring out in my
testimony, seismic studies are the first, foremost, and
fundamental way that we understand what is beneath the ground,
short of actually putting a hole in the ground and recovering
material.
But it is used for any number of purposes. For those of us
in the scientific community, especially geophysicists, as we
call ourselves, it is something that is fundamental to our
ability to understand image, as essentially a doctor would a
human: a three-dimensional picture of what is beneath the
surface.
Mr. Lamborn. Can it be done in an environmentally safe and
responsible manner?
Dr. Knapp. Absolutely, it can. It has been done for
decades, globally, in many sensitive areas. And the data
clearly show that there is yet to be any scientific data that
show significant effects on marine mammal populations, despite
even recent studies that are somehow suggesting that marine
seismic surveys are detrimental even to the micro-organisms in
the ocean. I think that there is yet to be conclusive evidence
coming forward that there is demonstrable damage to any of
those communities on a long-term basis.
Mr. Lamborn. Would it be fair to conclude, at least as some
people have, that those arguments are more emotional than
scientific?
Dr. Knapp. Well, I think that there is probably that
element of it. Again, as a scientist, I can tell you that
science is not some rigid body of facts. We, as scientists,
never actually prove something. We are constantly disproving
things.
So, I would say that the body of evidence so far indicates
that there is no evidence to support the idea that there is
long-term damage to any of those marine communities.
Mr. Lamborn. Shifting gears, can seismic testing be
compatible with Department of Defense needs and uses of the
offshore areas?
Dr. Knapp. Right, and that is what I tried to bring out in
my testimony, because I have heard that put forward as a reason
to limit offshore activities. Understandably, defense of the
Nation is first and foremost, and I think that there are few
people that would argue that. But by their own analysis, the
Department of Defense has come forward and said that, in terms
of oil and gas activities in the Outer Continental Shelf, 3
percent or less of that area is off limits, based on their
needs for carrying out their mission. So, essentially, 97
percent is either unrestricted--the vast majority of it--or
might have some conditions that are site-specific, but even
those, I think, are more in terms of timing and coordination.
Mr. Lamborn. Thank you.
Mr. Whatley, I would like to ask you a question. What is
the difference in depth between the deep water of the Gulf of
Mexico and the Outer Continental Shelf off the Atlantic? And
then I have a followup.
Mr. Whatley. Sure. And I will defer to Dr. Knapp on this,
but the Outer Continental Shelf, where the resource base is
that folks are looking at, is going to be anywhere from 70 to
150 miles offshore, so we are not talking about----
Mr. Lamborn. No, no. Depth, depth.
Mr. Whatley. Yes, and out there you are talking about deep
water. You are talking 5,000-plus feet that are going to be out
there, very similar to the deep water in the Gulf.
Mr. Lamborn. But on the shelf, itself.
Mr. Whatley. Yes. It is going to be deep water, in terms of
where the exploration and productions are going to play.
Dr. Knapp. I will just say, from a geologic definition, the
continental shelf ends at 200 meters water depth. So,
essentially, 700 feet, but there are certainly areas that are
prospective and of interest to the industry that are in deeper
water, though.
Mr. Lamborn. OK, thank you. I yield back.
Dr. Gosar. I thank the gentleman. The gentlewoman from
Massachusetts, Ms. Tsongas, is recognized for her 5 minutes.
Ms. Tsongas. Thank you, Mr. Chairman. As I said during our
hearing last week--and I want to reiterate again here today--I
believe our Nation is in the midst of a clean energy
revolution. More and more of our electricity is being produced
from renewable resources. According to the Bureau of Labor
Statistics, the Nation's fastest-growing occupation is a wind
turbine technician, a good-paying job available to those coming
right out of high school.
It is also worth noting that the states with the highest
average salary for a wind turbine technician are Pennsylvania,
Iowa, North Dakota, South Dakota, and Oregon.
Instead of expanding investments in fossil fuel
development, especially in places like the Atlantic Ocean where
there is no existing infrastructure, we should be looking to
the future, and investing in renewable energy resources.
Massachusetts was proud to be among the first states to
participate in Federal offshore wind development lease sales.
Just last September, Secretaries Jewell and Moniz held a press
conference announcing the national offshore wind strategy in
Massachusetts at the Wind Technology Testing Center, a state-
of-the-art blade testing facility in Boston that is helping to
develop the next generation of both land-based and offshore
wind turbine technologies.
Massachusetts is also working with our electric utility
companies to reach our state-mandated offshore wind goals over
the next decade, goals that were signed into law by our
Republican Governor.
While the Administration claims to support all-of-the-above
energy production, clean energy is not prioritized in policy
proposals and Executive Orders, nor is it adequately funded in
its Fiscal Year 2018 budget request. It is not surprising that
the Administration recently announced, and we are discussing
here, how it will be fast-tracking approvals of fossil fuel
permits on public lands, but made no mention of similarly
improving development of clean energy resources.
Clean energy on public lands and waters offers tremendous
opportunities for job creation and home-grown energy
production. I believe the Trump administration needs a
thoughtful, aggressive plan to promote these jobs, if it really
wants to claim that it is supporting all-of-the-above energy
development. We need action, not words.
Ms. Howell, I am just one of many East Coast Members of
Congress from both sides of the aisle who are opposed to
offshore drilling in the Atlantic. My constituents and
residents across the state strongly believe that opening new
areas to offshore drilling will undermine critical efforts to
protect our oceans that we value deeply, support our recreation
and tourism--I was just on Cape Cod this past week and I see
how important it is to the economy of that part of the state,
to support our tourism and recreation economies, and our
commercial fisheries that we value quite deeply.
You spent your career working in the oil and gas industry,
and yet you oppose new drilling in the Atlantic. Can you
reiterate why you don't believe that offshore drilling is
compatible with existing Atlantic Ocean activities?
Ms. Howell. Yes. Thank you very much, Congresswoman. For
several reasons oil and gas are inconsistent with the East
Coast economy.
To begin with, the nature of the work required to drill
offshore--it is a dirty industry. It requires several different
ways in which oil and gas are a threat to the coast, not only
through the drilling process, but also through transportation,
bringing the oil and gas to the onshore facilities, where it is
refined or liquified, as liquified natural gas. There are a
variety of ways in which oil and gas can enter the coastal
stream, and that does not have to require a blowout.
The Gulf Coast has a history of leaks of all sorts from
these types of activities. In addition, the nature of the
tourist economy on the Atlantic is that we have grown up with
tourism on the Atlantic, as opposed to the Gulf of Mexico,
which grew up with the oil and gas business. You don't go to
the beach in south Louisiana. The tourism that Ms. LeBlanc
referred to, of course, is centered around New Orleans, which
is 100 miles from the coast.
My son grew up going to Cape Cod in the summertime. We
spent 20 years at North Eastham Beach. I know how precious that
place is, as well as the coastline where I live now.
When Deepwater Horizon happened in the Gulf, the spill was
of such a magnitude it cost just the state of Louisiana alone
$247 million in tourism revenue. And South Carolina benefited,
unfortunately, from that spill--fortunate for us, unfortunately
for Louisiana--because people left the Gulf of Mexico. They
decided not to vacation there, and they came instead to the
Carolinas. That is the cost. That is the real cost of tourism.
Ms. Tsongas. Thank you. I yield back.
Dr. Gosar. I thank the gentlewoman. The gentleman from
Virginia, Mr. Wittman, is recognized for 5 minutes.
Mr. Wittman. Thank you, Mr. Chairman. I would like to thank
our panelists today for joining us.
Ms. MacGregor, I want to start with you. In 2015, the
Department of Defense conducted a pretty significant
compatibility planning assessment there in the Mid-Atlantic
Region. They looked at the areas that were identified in the
2017-2022 draft leasing program to look at where there would be
issues, and they looked at that along a number of different
continuums, and that is full exploitation there to no
exploitation of the resources that are there, both oil and gas.
In looking at that evaluation, the Department of Defense
came to the conclusion that only about 5 percent of the area
there was not compatible with DoD needs within that area, which
means 95 percent was.
Can you give me your perspective on how, as you are
undertaking this look at the current proposed leasing program
there for the Mid-Atlantic, how you would take into account
DoD's findings? And then also how you see that compatibility
with oil and gas and operational requirements for the military
there, in the Mid-Atlantic?
Ms. MacGregor. Sir, thank you for that question. I think
that is one of the most important things that we need to focus
on, moving forward. As we initiate this new plan, we will be
moving very closely with the Department of Defense. It is
required under the Outer Continental Shelf Lands Act.
We also have a Memorandum of Agreement that has been in
place since 1983 that we have been operating for decades
successfully, and ensuring that not a single block is leased,
not a single program is finalized, without the Department of
Defense having input in this process.
I think moving forward, and how it can be done
successfully, there is an interesting stat that our office
provided to me, which is 36 percent of the active leases in the
Central Gulf of Mexico, which is one of the most producing
areas off our coasts, 36 percent of the active leases there are
operating in military areas, where it is subject to
coordination and evacuation site-specific stipulations in the
event of need by Defense for us to ask industry to potentially
shut in, and other requests.
So, I think it can be done very well as long as we continue
to work together, and that relationship is extremely good right
now at the Department, and we have worked closely with the
Department of Defense. We will continue to do so, moving
forward.
Mr. Wittman. I want to ask you a little bit, too, about
seismic analysis there in the Mid-Atlantic. As you know, the
data that we have in the Mid-Atlantic, from a seismic
standpoint, is about 40 years old. We have new technology today
that provides much greater insight as to what is in those
geologic layers below the ocean surface, as well as doing it in
a very responsible way, both environmentally and from a natural
resource perspective.
Can you give me your thoughts on how you all are going to
move forward with up-to-date seismic analysis there in the Mid-
Atlantic as important steps toward energy development and
understanding what is there?
Then also, where you see the Department moving forward in
this with a time perspective on when you believe you would give
the opportunity to these companies to do the seismic analysis
there, based on current evaluations.
Ms. MacGregor. Sure. No decisions have yet been made. As it
works right now, we issue a permit, but so does the National
Marine Fisheries Service at Commerce. So, they just extended
their comment period a couple weeks ago, and I believe it has
closed for the incidental harassment authorizations.
But the President's Executive Order was very clear. He
would like our departments to work very closely together. When
it comes to offshore seismic, our Chief Environmental Officer
at the Bureau of Ocean Energy Management has found that there
is no documented scientific evidence of seismic activities
adversely affecting animal populations. We are always welcoming
new scientific studies into the Department to continue to
evaluate that.
A significant for the Atlantic environmental impact study
was done and finalized, I believe, in 2014--that determined
that seismic surveying can continue forward in the Atlantic
safely, with specific mitigations to protect marine mammals.
So, we intend to be able to move this process along, and we
recognize the fact that the initial EIS and scoping was done in
2009. So, whether you disagree or agree on seismic surveying
being conducted, I think we can all agree that a government
process that takes 8 years to get through is just not working.
We are going to work together with other Federal partners to
try to be more expedient.
Mr. Wittman. Thank you, Mr. Chairman. I yield back.
Dr. Gosar. I thank the gentleman. The gentleman from
Florida, Mr. Soto, is recognized for his 5 minutes.
Mr. Soto. Thank you, Mr. Chairman. We are back again with
another Committee meeting on 20th century jobs in the 21st
century. My concern continues to be that we are propping up
states that are addicted to oil jobs that have not diversified
their economies like Florida has, and the whole world is
barreling toward another climate change crisis.
There was a time in our country when we embraced the
future, like solar and wind and hydro-electric, bio-fuels and
nuclear. And right now it just feels like we are being dragged
to the past again.
In Florida, we have a tourism and agriculture economy, and
no one would ever confuse a Florida beach for beaches in some
other states, that is for sure. Yet, we still suffered from
this tragic Deepwater Horizon disaster that cost us billions
and billions of dollars.
I want to compliment Secretary Zinke for agreeing in his
last hearing that the 125-mile buffer around our state until
2022 is not in jeopardy.
And we just received a letter from the Department of the
Air Force that said, and I quote from General David L.
Goldfein, ``The moratorium is essential for developing and
sustaining the Air Force's future combat capabilities. Although
the Gulf of Mexico Energy Security Act's moratorium does not
expire until 2022, the Air Force needs the certainty of the
proposed extension to guarantee long-term capability for future
tests.''
Ms. MacGregor, are there any additional comments, based
upon the Air Force's letter supporting the moratorium in the
Gulf around our state, subsequent to this letter being sent
out?
Ms. MacGregor. Absolutely. Obviously, that moratorium was
put in place by statute by the U.S. Congress under the Gulf of
Mexico Energy Security Act. I believe that statute has that
area expiring for a moratorium in 2022.
Mr. Soto. But is there any additional information on
consideration of extending the moratorium based upon the Air
Force's letter?
Ms. MacGregor. Sorry. The decision to extend the moratorium
will ultimately need to be approved and put into legislation by
Congress.
Mr. Soto. There was a June 30, 2017 letter that was sent by
my colleague, Congressman Beyer, along with over 100 Members of
Congress: 10 Republicans, 11 Democrats from my state. That is a
pretty large group of Members opposing any seismic testing on
the Atlantic Coast.
Ms. MacGregor, have you received any letters of support
from Members of Congress to have seismic testing on the
Atlantic Coast?
Ms. MacGregor. I am not familiar with these letters, but I
am more than happy to take a look at what letters have come
into the Department and get back to you on that.
Mr. Soto. There is over $95 billion worth of GDP on the
Atlantic Coast economies, according to a letter, and 1.4
million jobs associated with it, and they would face seismic
airgun blasting every 10 seconds, 24 hours a day in the areas
that would be under siege under any potential opening, which
could result in a 78 percent decline in reef fish, 138,000
estimated deaths of whales and dolphins.
I wanted to hear from Ms. Howell about how would it affect,
do you think, the tourism fishing and beaches and other
aspects, if we have that kind of decline?
Ms. Howell. Yes, thank you very much, Congressman. There
are a couple of points about seismic that I think need to be
clarified.
The first one is, as you pointed out, there have been
scientific, peer-reviewed studies that have come out in recent
years, demonstrating that not only is there harm--78 percent
reef fish decline--as a result of seismic testing, but a very
recent study that just came out that zooplankton, which is the
basis of our food chain, our marine food web, is killed at a
distance of almost three-quarters of a mile away, which is
further than previously thought.
The reference that Ms. MacGregor made a little bit ago to
the chief scientist's letter from BOEM saying that seismic was
safe was issued in 2014.
Mr. Soto. Thank you, and I appreciate it, but my time is
running out. I do want to also express a great concern--we have
the busiest space port in the world at the Cape in the district
next to mine, and seismic testing could put this into jeopardy,
as well. Those are thousands and thousands and thousands of
high-tech jobs representing the future of our economy.
So, I think it is noteworthy for this Committee that over
100 Members of Congress have opposed the Atlantic seismic
drilling, and we have yet to hear one support it.
Dr. Gosar. I thank the gentleman. The gentleman from
Louisiana, Mr. Graves, is recognized.
Mr. Graves. Thank you, Mr. Chairman. I appreciate it. I am
not sure where to start in responding to all the misinformation
here. Let's see.
First of all, can you put slides up, please? All right.
While you are doing that, I will go ahead and jump over to
fishing.
Ms. Howell, I want to thank you for being here--I just
looked up fishing on NOAA's website. I think it was the Office
of Science and Technology. In 2015, which is the latest year
they had data, South Carolina harvested approximately 14.4
million pounds of fisheries. In the state of Louisiana, during
the same year, we harvested approximately 1.07 billion pounds.
I will say it again: 14.4 million pounds in South Carolina,
1.07 billion pounds of seafood in the state of Louisiana. That
is just commercial fishing. And certainly, while I would argue
that our fishers are better than in South Carolina, even that
factor would indicate that we have substantial ecological
productivity in south Louisiana, despite the fact that we also
have in some years, as Ms. LeBlanc noted, approximately 90
percent of all the offshore energy production in Federal waters
in the United States.
[Slide]
Mr. Graves. I want to point out this slide here, which is
really important, because it helps to refute a lot of the
claims that folks here from other states, that I want to be
clear, do not produce offshore energy have been alleging.
If you look at this slide from the Congressional Research
Service from the Library of Congress, based upon data from the
National Research Council--I would like to argue that this is
probably pretty sound data--it shows that 62 percent of the
releases of oil are from natural seeps, that 33 percent is
actually from oil consumption, and that 4 percent is from the
transportation of oil. There were comments made earlier about
the dangerous pipelines and other transportation aspects--4
percent is spilled from that and only 1 percent is tied back to
actual oil extraction.
So, let's go ahead and----
Ms. Howell. May I comment on that, Mr. Graves?
Mr. Graves. Yes, in just a minute. Next slide, please.
[Slide]
Mr. Graves. I also want to show here, which is another
Congressional Research Service graphic that shows, dating back
to 1973, Number one is the total volume of oil spilled, which
are the blue bars. Number two is the number of individual
spills. This clearly shows a trend where we are seeing
extraordinary reductions, while at the same time we are seeing
increased production of energy.
The reality is this: We have produced billions of barrels
of oil in the offshore. We have produced trillions of cubic
feet of natural gas. And you can see the trends that are going
in the right direction. We have done so safely.
And before folks start throwing out Deepwater Horizon, I
was the lead trustee for the state of Louisiana. BP can't stand
me, because I fought them on everything. We reached the largest
settlement in U.S. history from a single company because we
continued fighting to make sure that we did what was right. I
don't need a lecture on Deepwater Horizon.
I grew up in south Louisiana. I fish there, I know the
people that operate there. In 2011, 50 percent of this Nation's
trade deficit was attributable to us importing energy from
other places. I am glad you all came here in your solar and
wind-powered airplanes, I am glad that you all walked here, and
everything else. Look, the reality is it is an integral part of
our economy. We are either giving other Nations billions and
billions of dollars, and giving them millions of jobs, or we
are going to do it here.
And when we give it to any of these other countries--we all
know these countries we are talking about--Venezuela, Middle
East, African nations--what do you think they do with that
money? Iran, what do you think they do with it? They come and
challenge our sovereignty, challenge our allies, challenge our
values, way of life, and then we go and spend millions or
billions more fighting it again.
Feel free to respond.
Ms. Howell. Wonderful. Thank you so much for the
opportunity to respond. Let me begin by your last point
regarding imports from hostile countries.
As you know, Congress, in December of 2012, began exporting
crude oil for the first time since the oil Arab embargo in 19--
yes. It was approved, as well as selling off half of our
strategic petroleum reserve. If we were so desperate for oil
and gas, we would definitely----
Mr. Graves. 2015.
Ms. Howell [continuing]. Not be exporting. And the imports
are coming from hostile countries like Canada and Mexico. Last
time I checked, most of the oil and gas that was being imported
was coming from friendly countries, not hostile countries.
Mr. Graves. Top 10 includes Venezuela, includes, as I
recall, Nigeria and other countries, including Iran.
Ms. Howell. Saudi Arabia. And the reason for those imports,
as you know, have to do with the refineries off the Gulf of
Mexico, which are designed to process heavy crudes. Heavy
crudes are not what we are producing in the United States.
Until we change the refinery mix in the United States, we have
to continue to import, to run those refineries, or your south
Louisiana friends will be out of work.
Second, with regard to natural oil seeps, you have the
entire OCS mapped on there. The Atlantic Coast is not the home
of natural oil seeps. I am arguing for protecting the Atlantic
Coast. Those oil seeps are largely from the Gulf of Mexico and
the California Coast. I think, if you do the geology associated
with that graph, you would have a better understanding.
Mr. Graves. Thank you, Mr. Chairman.
I was hoping that I was going to be able to correct the
record versus having more distortions that I need to correct
again, but I am looking forward to, hopefully, a round two.
Ms. Howell. Half-truths are not distortions.
Dr. Gosar. I thank the gentlewoman, I thank the gentleman.
The gentleman from Maryland, Mr. Brown, is recognized.
Mr. Brown. Thank you, Mr. Chairman. Like all coastal
communities, Maryland relies heavily on the health of our
waters and the accessibility of our shoreline. I certainly
appreciate the testimony about the experience in Louisiana.
For us, the Chesapeake Bay is not just a source of great
pride for our region, but it is also an economic driver. Our
watermen, fisheries, crabbers, and tourism industry depend on
the Bay and a clean coast for their livelihoods. The last thing
that we should be focused on is putting the largest estuary in
America and a multi-billion dollar economic catalyst that spans
seven states at risk of an oil spill the same magnitude and
size as the Deepwater Horizon spill.
As we saw in the Gulf, it would be the states who bear the
brunt of such a disaster. More than 120 local governments have
passed formal resolutions opposing oil and gas exploration and
drilling in the Atlantic and Eastern Seaboard. These include
numerous local chambers of commerce, tourism, restaurant
associations, commercial and recreational fishing associations,
and the New England, Mid-Atlantic, and South Atlantic Fishery
Management Councils.
In Maryland, Ocean City, Berlin, Baltimore, and Montgomery
County have formally passed resolutions, as well as the Ocean
City Chamber of Commerce, Ocean City Hotel, Motel, Restaurant
Association, and the Maryland Salt Water Sport Fishing
Association have weighed in, formally opposing offshore
drilling and seismic airgun blasting.
At a time when renewable energy industries are exploding
with respect to interest and job growth, and oil prices are at
record lows, President Trump and Secretary Zinke are focused on
putting our coastal communities at risk.
I appreciate the contributions to energy development and
production in Louisiana, but in Maryland we want to sort of
take a different approach. If we are talking about all-of-the-
above, we would like to see the Eastern Seaboard used for
renewable energy. Opening up the Atlantic Ocean to offshore
drilling, we believe, is looking backwards and is not
Maryland's energy choice.
In 2013, when I was Lieutenant Governor, the Maryland
General Assembly passed legislation intended to spur the
state's offshore wind industry. And just last month, Maryland's
Public Service Commission approved ratepayer subsidies to
support two wind farms off the coast of Ocean City. This
decision is paving the way for Maryland to become home to some
of the Nation's first and largest offshore wind farms.
It has been reported that these wind farms will prevent
hundreds of thousands of pounds of carbon dioxide emissions,
will bring in tens of millions of dollars in tax revenue, while
creating nearly 10,000 jobs in the region. These wind farms are
indicative of the direction not just Maryland is headed, but
the country, as a whole.
Moving at a rapid speed, the Trump administration seems
eager to roll back policies protecting our vulnerable
coastline, and to remove all restrictions for drilling on
public lands. I strongly oppose these policies, and implore the
Administration not to issue any new oil and gas lease sales on
the Outer Continental Shelf.
Again, I appreciate what you all are doing down in
Louisiana. I am going to support all measures to protect the
ecology and the economy in Louisiana, but when it comes to the
Atlantic Outer Continental Shelf, we would like to go
renewable, and not oil.
Thank you, Mr. Chairman. I will yield back, but for any
comments or responses that any of the panel may want to offer.
Thank you, Mr. Chairman.
Dr. Gosar. I thank the gentleman, and I recognize the
gentleman from Georgia, Mr. Hice, for his 5 minutes.
Dr. Hice. Thank you very much, Mr. Chairman, and I also
want to say thank you to Ms. MacGregor for mentioning the role
of the military.
This is more than just about energy independence, it is
about national security. I think, at the end of the day, most
of us understand that role.
Dr. Knapp, I appreciate you being here again, and for all
that you do. I would like to engage with you on the aspect of
alarmism in opposition to surveying. I would like to begin by
reading a quote from Dr. William Brown, who is a Chief
Environmental Officer at the DOI's Bureau of Ocean Energy
Management. He gave this quote in August 2014. You may be
familiar with it, but he said, ``To date, there has been no
documented scientific evidence of noise from airguns used in
geological and geophysical seismic activities adversely
affecting marine animal populations or coastal communities.
This technology has been used for more than 30 years around the
world. It is still used in the United States' waters off the
coast of the Gulf of Mexico with no known detrimental impact to
marine animal populations or to commercial fishing.'' Would you
agree with that statement?
Dr. Knapp. That is consistent with my knowledge of the
discipline, yes.
Dr. Hice. All right. It is also my understanding that this
same basic technology, the airgun that is used for oil surveys
and so forth, is also used to investigate continental crust
behaviors. So, how is it that some would be supportive of that
technology being used in the study of continental shelf
behavior, but alarmed by it being used for seismic surveying?
Dr. Knapp. Well, I cannot claim to know all of the insights
on that, but I would speculate that, as has been made public on
many occasions, that seismic surveying, as it is known, is
portrayed as the so-called gateway drug to oil and gas
drilling, when, in fact, it has its own purpose. It is the tool
by which we understand scientifically, as well as for applied
purposes, what is beneath the surface.
And I would make two other comments. One was that the very
birthplace of marine seismic work was here, on the Atlantic
Coast, 150 miles from where we are. In those days, they dropped
100-pound dynamite charges off the back of marine vessels. And
then, subsequently, during the 1970s and 1980s, there were
hundreds of thousands of kilometers of seismic that were
collected here on the Atlantic Coast. I do not recall a single
report of a beached mammal or any other destruction that took
place during those periods.
Dr. Hice. Then why are there campaigns, misinformation or
whatever, against it?
Dr. Knapp. Again, I can only speculate that those are
intended to somehow stop the efforts to actually fairly
evaluate the resource potential.
But it is certainly not a basis for well-informed policy
decision making, and it is the antithesis of a scientific
approach, where you would draw conclusions based on the
collection and analysis of data, rather than predetermine what
the result is before you even go collect the data.
Dr. Hice. Would you say that is a problem, the
predetermined conclusions?
Dr. Knapp. It clearly is.
Dr. Hice. Yes, as opposed to looking at scientific data.
Dr. Knapp. Exactly. It goes counter to any scientific
approach to understanding a certain problem.
Dr. Hice. And you would know.
Mr. Chairman, in closing, I would like to submit a letter
for the record from the Georgia Department of Natural
Resources.
Mr. Graves [presiding]. Without objection.
[The information follows:]
Georgia Department of Natural Resources,
Brunswick, Georgia
July 6, 2017
Jolie Harrison, Chief
Permits & Conservation Division
NMFS Office of Protected Resources
1315 East-West Highway
Silver Springs, MD 20910
Re: IHA Applications Incidental to Conducting G&G Activities in the
Atlantic Ocean RIN 0648-XE283
Dear Ms. Harrison:
Staff of the Georgia Coastal Management Program (GCMP), Georgia
Department of Natural Resources' (GaDNR) Coastal Resources Division and
GaDNR Wildlife Resources Division has reviewed the June 6, 2017 Federal
Register notice (Vol. 82 No. 107) notice of National Marine Fisheries
Service's (NMFS) receipt of five (5) proposed incidental harassment
authorizations (IHAs) incidental to conducting geophysical surveys in
the Atlantic Ocean, as well as reviewed five (5) individual
applications: E14-001 TSG-NOPEC Geophysical Company, E14-003 ION
GeoVentures, E14-004 WesternGeo LLC, E14-005 CGG Services, and E14-006
Spectrum Geo, Inc). They propose to shoot 145,141 km of trackline in
1,214 survey days using various airguns that will emit over 5 million
shots. The vast majority of the surveying effort will occur east of the
continental shelf break and only a small portion will be offshore of
Georgia's coast. NMFS estimates that approximately 1,900 marine mammals
will be injured and over 350,000 other marine mammals, including more
than 100 Right whales, will be harassed.
One (1) company will not be surveying at all off Georgia's coast
(E14-004 WesternGeo) and one (1) company will not come within 80 miles
offshore of Georgia's coast (E14-005 CGC). The remaining three (3)
companies (TGS, ION and SpectrumGeo) coordinated with GCMP under the
federal consistency provisions of the Coastal Management Act (CZMA) and
received concurrence based on their amended applications to the Bureau
of Ocean and Energy Management (BOEM) for geologic and geophysical
(G&G) activities that incorporated four (4) additional mitigation
measures while surveying in waters adjacent to the State of Georgia:
Notify GaDNR regarding operation of vessels in offshore
water adjacent to Georgia
Vessels will have functioning AIS (automatic
identification system) onboard and operating at all times
and vessel names and call signs will be provided to GaDNR
Airguns will not be discharged within 20 nm of Georgia
from April 1 to September 15
Airguns will not be discharged within 30 nm of Georgia
from November 15 to April 15
The Georgia Coastal Management Program submitted a comment letter
August 19, 2015 requesting NMFS to consider incorporating these
mitigation measures as conditions of the IHA permits to provide
enforceability at the federal level. The Federal Register notice
includes all of these mitigation measures and more, including:
Applicants must notify NMFS when vessels are operating and
provide AIS call signs
o This addresses our 1st CZM condition
All vessels must have functioning automatic identification
systems (AIS)
o This addresses our 2nd CZM condition
Airguns may not be discharged within 16 nmi (30 km) of
Atlantic coast year-round to protect depleted bottlenose
dolphin stocks
o This addresses our 3rd CZM condition and
provides sea turtles protection between April 1st and September
15th during nesting season
Airguns may not be discharged within Right whale Critical
Habitat, shipstrike Seasonal Management Areas (SMAs) and a
migratory corridor linking those areas, plus a 10 km
buffer, between November 1st and April 30th
o This addresses our 4th CZM condition
Airguns may not be discharged within Dynamic Management
Areas (DMAs), plus a 10 nm buffer, if Right whales are
sighted at other times and locations
Airguns may not be discharged within 54 nm of GA and SC
coast between June 1st and August 30th to protect Atlantic
spotted dolphins
We appreciate NMFS's proposal to restrict seismic surveys along the
Southeast U.S. coast at times of year when North Atlantic right whales
are present. Georgia's coast lies at the heart of the right whale
calving grounds, and protection of Southeast U.S. waters is critical
for the species' recovery. Ga DNR, NNMFS and other partners are
currently conducting a tagging study to investigate right whale
movements in the Southeast and Mid-Atlantic U.S. Preliminary data from
this study, combined with data from previous aerial survey and habitat
modeling studies, suggest that the current airgun restricted area
boundary is likely sufficient to protect right whales from injury.
However, if future tagging data confirm that right whales use waters
farther offshore, NMFS should expand the restricted area boundary for
future seismic permits accordingly. We also appreciate NMFS's proposal
to restrict airgun use within 16 nmi of shore to protect depleted
coastal bottlenose dolphin stocks. Doing so will provide protection to
threatened Florida manatees and strategic estuarine bottlenose dolphin
stocks which also inhabit Georgia's nearshore ocean waters.
In summary, the seismic and vessel mitigation measures adopted by
BOEM through the G&G PEIS, and being proposed by NMFS, should minimize
reasonably foreseeable effects of seismic surveys on Georgia's
protected marine mammal species, and will mitigate potential impacts to
nesting loggerhead sea turtles and coastal fisheries as well.
NMFS acknowledges that visual and acoustic monitoring are imperfect
and that marine mammals will likely go undetected by seismic vessels,
especially for deep diving species that remain below the surface for
long periods. As such, it is reasonable to assume that some marine
mammals will be killed by airgun shots and that additional marine
mammals may be injured in excess of the more than 1,900 animals that
NMFS predicts. Most of these impacts will likely occur near the shelf
break and beyond, due to the spatial extent of the proposed survey
effort, and will therefore involve pelagic species, many of which are
poorly understood. Potential effects on these species will need to be
considered if seismic surveys become routine going forward.
There is increasing evidence that chronic anthropogenic noise
negatively impacts marine mammals. If seismic surveys become routine
sources of noise in the Southeast and Mid-Atlantic, it is critical that
NMFS implement a long-term noise monitoring program to assess
cumulative effects of noise on Right whales and other marine mammal
species.
Sincerely,
A.G. ``Spud'' Woodward,
Director.
______
Dr. Hice. Basically, what is in this letter, as probably
most of you know, the coast of Georgia is known to be a calving
ground for the right whale. So, the Georgia DNR is very much
concerned with protecting that species.
This letter basically is affirming what we have been
discussing here, that there is no evidence that these whales
have been injured in any way. And if the testing is done, and
the airguns are used in the manner in which they were designed,
and used properly, that it is both good for the environment,
the marine population and fishing community, across the board.
I am grateful that Georgia is leading by example in this
regard. I think it is important that we reduce the red tape
that is associated with seismic surveying. It again comes back
to national security, as well as energy independence, and I
think we need to keep the proper perspective. I thank each of
you for being here, and I thank the Chairman.
Mr. Graves. The gentlewoman from California, Ms. Barragan,
is recognized for 5 minutes.
Ms. Barragan. Thank you, Mr. Chairman. My colleague just
mentioned that this is more than about energy independence, it
is about national security. I agree with that statement,
although I believe climate change is a national security issue.
When we take a look at opening up coastal waters to more oil
drilling, you are talking about more risk to things like
climate change.
My colleague talked about things like looking at scientific
data. That takes you right back to climate change, something
that we do not talk about in this Committee, and it is very
unfortunate. Very unfortunate.
We just had record heat in Los Angeles, and people say,
``Oh, it gets hot all the time.'' Record heats from over
decades. The scientific data is there. Climate change is real,
it is happening, and we need to act now to stop it, not to go
the other way and to open up our coastline.
Now, President Trump's Executive Order lays the groundwork
to open up California's 840-mile coastline to dangerous
offshore oil drilling.
I spent the last several years fighting an oil company who
wanted to drill inland and then out into the Santa Monica Bay.
The Number one reason that we heard from the oil companies on
why to do it was it was going to bring in all this revenue, we
are going to have all these new--a new police department,
better schools. At the end of the day, the voters decided
overwhelmingly, by about 80 percent, that it was not worth the
risk to the economy, to the jobs that the tourism provides, to
the city where I was on the Council and served as mayor. The
California economy relies so much on tourism. To put it at risk
is totally unacceptable.
Now, I would argue, for climate change, we should look at
these things even in places like Louisiana. If you represent
Louisiana, you want to open up your coast line, you want to put
it at risk, I say stay off of my California coastline.
There was an article recently, Ms. MacGregor, in the
Houston Chronicle. It is dated July 5, and you are quoted in
it. It is called ``Trump Appointees Offer Muscular Support for
Oil and Gas.'' I think you certainly have heard that there is
strong opposition to new leasing off of California's coastline.
Historically, the California coastline has been off limits.
In the Houston Chronicle article I just showed you, you
recognized the coastal governors will have different views
about offshore development. You will go on to indicate that the
Secretary may be looking to pick a fight with my governor,
Jerry Brown, and you said, and I quote, ``The Secretary has had
quite a few questions about California and the areas that seem
to come up every time we talk about the 5-year plan.''
Can you give me an idea of what kind of questions he is
asking about?
Ms. MacGregor. Absolutely, and thank you for the question.
We absolutely understand the needs of California and how
tourism is so very much tied to a reliance on motor fuel and
jet fuel. And at the end of the day, the 5-year plan gets back
to our national need.
California is one of the greatest consumers of petroleum
products in our entire Nation----
Ms. Barragan. Excuse me. I just want to go back to the
question, because I have very limited time. My question is, you
said the Secretary was asking questions about California. What
kind of questions is he asking about California?
Ms. MacGregor. The Secretary has asked for a full brief on
how the 5-year planning process works, which, as I have stated,
at the beginning of the RFI process, 26 planning areas are on
the table, and it starts in that way for every planning process
for the 5-year plan. It started like that under the past
administration when they finalized two 5-year plans, as well.
So, when it comes to informing the Secretary exactly how
the 5-year plan works and what our outreach is, including the
recent letters that we have sent out requesting your governor
and other governors for their input--and we really welcome that
input and your input, as well--those are the sort of questions
that the Secretary has asked at least me to brief on.
Ms. Barragan. So, just so I am clear, you generally said he
was asking questions about how the 5-year plan works.
Ms. MacGregor. Correct.
Ms. Barragan. And then you mentioned input from our
governor and representatives. Can you just clarify what kind of
questions he is asking that are specific to California and the
California coastline?
Ms. MacGregor. Sure. I can get you a copy of the letter we
sent to your governor, if that would work.
Ms. Barragan. OK, so that is what you were referring to
when you said that every time we talk about the 5-year plan he
is asking about California, the questions that are in that
letter?
Ms. MacGregor. No, I am saying the questions in that letter
are going to be continuously requested in the form of public
input, as it relates to the 5-year planning process.
Ms. Barragan. OK, so you don't have any other topics you
can share with me today that are not in that letter?
Ms. MacGregor. I am sorry, I am just unclear on what you
are asking.
Ms. Barragan. Well, your quote to the paper was that the
Secretary has quite a few questions about California every time
the 5-year plan comes up. As somebody who represents a district
in California, I am curious about what kind of questions the
Secretary is asking.
Ms. MacGregor. It is simply informing the Secretary on how
the 5-year planning process works. And again, I think that is
important, because a lot of people ask that question: What does
everything on the table mean?
Well, everything on the table means that we look at the 26
planning areas, as required by law, and then we winnow it down.
Ms. Barragan. OK, thank you. I yield back.
Mr. Graves. Thank you. The gentleman from Texas, Mr.
Gohmert, is recognized for 5 minutes.
Mr. Gohmert. Thank you, Mr. Chairman, and I appreciate the
witnesses being here.
All too often, we have seen with the LCWF that it has, in
my opinion, been abused. The Federal Government continues to
buy land when we are not taking care of what we have. And we
have complaints all over the country, have them in my district.
The Federal Government is not taking care of its Federal land
areas.
So, it has grieved me to see all this money going to buy
new land when we are not taking care of what we have.
I am curious--and I will make this to Ms. MacGregor and
appreciate you very much, and knowing that you are working for
a former member of this Committee, a very dear friend, I do
appreciate the approach he has taken. But given the significant
increase expected in phase two, how can we ensure that the
funds are used in the most appropriate manner that the Federal
Government were to get from the offshore drilling?
Ms. MacGregor. When it comes to utilizing funds for Land
and Water Conservation Fund?
Mr. Gohmert. Yes.
Ms. MacGregor. I believe, under the current budget--and I
don't have those figures with me--but for the Department of the
Interior, that budget has been reduced significantly when it
comes to land acquisition under the Land and Water Conservation
Fund. But I would be more than happy to get you that
information.
Mr. Gohmert. OK. I also want to ask--and also for you, Ms.
MacGregor--due to declining oil and gas production in Alaska,
California has turned to foreign oil to meet its energy needs.
Last year, over half the crude oil supplied in California
refineries came from foreign sources, while 11.4 percent came
from Alaska.
How can we get Alaska providing a more important role in
reducing California and our country's heavy dependence on
foreign crude?
Ms. MacGregor. Sir, thank you for that question, as well. I
believe that is one of the reasons that the Arctic planning
areas, when it comes to offshore planning, have been included
in the President's directive when we look at our next 5-year
plan and planning for that, and signaling that those areas
could potentially be reopened, as they were closed by the past
administration.
The Secretary was recently on the North Slope with the
Senators. He toured the infrastructure that is already there
from onshore production, and was able to see the Trans-Alaska
Pipeline, which is one of the major infrastructure projects of
the last century, I guess, when it comes to energy. He is aware
of how important that is, and that most of that throughput it
refined in California. So, we are taking a look at that, and we
will consider that input when it comes to the 5-year plan.
Mr. Gohmert. All right. We know NEPA-directed environmental
review process is supposed to be integrated into the
development of the leasing program, and then again throughout
the leasing and the drill permitting process. According to
BOEM, the same OCS parcel is reviewed up to four times.
In your opinion--and if you know, the opinion of the new
Secretary--are all these four different reviews necessary?
Ms. MacGregor. Sir, when we move forward with conducting
NEPA department-wide, we are taking a look at NEPA, but
ultimately we will adhere to the regulations that are put forth
by the Council for Environmental Quality, who essentially
dictates how NEPA is to be implemented in the Department.
Mr. Gohmert. It sounds like you are saying we need to
inquire on another bureaucratic process to help the current
bureaucratic process. I don't think that is going to save a lot
of time and effort, when it seems to me that is a terrible
waste, to have to go through that very cumbersome process over
and over and over again when we are depending on foreign oil to
such an extent that it is actually creating a dangerous
international situation. So, I would encourage the Department
to give us ways we can streamline that for you without relying
on other bureaucratic processes.
And I would like to encourage my friends across the aisle
that have great concerns. When I was a kid, there was all kinds
of gloom and doom that if we allowed drilling in our Gulf shore
it would kill off all the fish in the Gulf. Well, they did
drill. And now, when anybody wants to go fishing, usually the
first place they want to head is for the drilling rigs. There
is a vast backlog of requests for old drilling rigs to be
dumped out in the Gulf, because of the tremendous increase in
fishing that it provides.
So, there is good news, even when you have a dry hole. I
yield back.
Mr. Graves. The gentleman from Virginia, Mr. Beyer, is
recognized for 5 minutes.
Mr. Beyer. Thank you, Mr. Chairman, and thank all of you
for being with us all morning.
I first want to reiterate for the record that I welcome the
process and the decision of the Obama administration's 5-year
oil and gas leasing plan for the Atlantic Coast, and I don't
believe it needs revisiting. And I oppose the Secretary and the
President's reopening of the 5-year plan.
I also wish to note that the communities and businesses up
and down the Atlantic Coast oppose offshore drilling and
seismic airgun use, and we should listen to the people who live
there, work closest to the shore--Virginia Beach, New Jersey,
Florida, many places--and strongly consider their views. And
this includes many, many Republicans, including this week the
Republican Governor of Maryland, Larry Hogan.
Ms. MacGregor, the Department of Commerce has recently
solicited the comments for incidental harassment authorization
and geophysical and geological companies to conduct seismic
airgun blasting in the Atlantic. In fact, I understand there
are five different surveys in an area twice the size of
California right now.
These permits were denied by the Obama administration for a
variety of reasons, but specifically for the potential impact
on marine life, and specifically for the North Atlantic right
whale, which is critically endangered. The leading North
Atlantic right whale scientists issued a letter outlining the
dire threat of extinction. The only known calving grounds are
exclusively in the area being proposed for oil and gas
exploration.
According to the scientists' letter, ``The North Atlantic
right whale is among the most endangered whales on the planet.
Only 500 individuals remaining. Recovery of the species has
been painfully slow. And worryingly, the latest data indicate
that population is no longer increasing in abundance, but now
may be declining in numbers. This declining growth rate is
thought to be directly linked to the disproportionately high
level of human activity occurring along its East Coast range.
Another major stressor to the environment in the form of
seismic surveys would, we believe, substantially increase the
risk that the population will slip further into decline and
would jeopardize its survival.''
There was a study sponsored by Shell Oil Company in the
Arctic on the bowhead whales. It is a sister species that shows
while conducting a seismic airgun blasting in the Beaufort
Seas, the whales' calling rates decreased and eventually
calling fell silent between the pods, which can lead to
separation of mothers and calves, and potentially the death of
a calf.
Mr. Chairman, I would like consent to introduce the letter
from the 28 North Atlantic right whale scientists, the Shell
study, and a bipartisan letter led by Republican Congressman
Rutherford and me, over 100 Members of Congress, on our
opposition to seismic airgun blasting.
Mr. Graves. Without objection.
Mr. Beyer. I would also like to point out the paper last
month about the high mortality rates of zooplankton from a
single moderately sized airgun cannot be cavalierly dismissed.
I mean all marine life is based on zooplankton, and we are
about to undertake, really, a remarkable level of seismic
exploration.
Ms. MacGregor, since the permits were denied in January of
this year, has the status of the North Atlantic right whale
improved enough that the species is no longer at risk for
slipping further toward extinction?
Ms. MacGregor. The bureaus that are under ASLM, I don't
have the recent data on North Atlantic right whale populations.
I can say that there are actually 3D seismic vessels operating
in the Atlantic today where Northern right whale habitat
exists, it just happens to be in the Canadian OCS.
As far as the decision in the last, I think, week before
the changeover in the Administration to deny those permits, we
felt that that decision was contrary to the same
Administration's programmatic EIS of the Atlantic that found
that Atlantic G&G activity--geological and geophysical
activity--could go forward.
Mr. Beyer. One of the things that confused me when
Secretary Zinke was here was the proprietary nature of the
seismic data. Is it true that the five companies that will get
these permits will own the seismic data, and it will not be
available to either scientists or to the public?
Ms. MacGregor. When they make the investment to conduct
that seismic surveying, if they so choose, it is proprietary,
but it is shared with the Department. And we utilize that
seismic data to further determine fair market value when it
comes to evaluating leases. Our team in the Gulf is very
strong, and does that in the Gulf of Mexico.
Mr. Beyer. OK, great. Thank you, Mr. Chair. I yield back.
Mr. Graves. Thank you. I want to give an opportunity to
clarify.
Ms. Howell, if I heard you correctly at the end, you said
that I stated some half-truths, and I want to give you an
opportunity to expand on that.
Ms. Howell. Thank you very much for that opportunity. The
graph you were showing represented the entire OCS, and the
point you were making was that most of the oil spills come from
natural seeps. That is correct. That is the correct part. The
part that is not correct is that it varies very much by
geology. The Atlantic Coast is not burdened in the same way as
the West Coast and other locations by that same degree of
natural seepage. So, that is the part that I think was a bit
misleading as it relates to the Atlantic Coast.
Mr. Graves. Are you disputing the fact that you have more
oil that is spilled from transportation pipelines, from seeps
and other things, than you do from actual oil exploration?
Ms. Howell. The oil and pipelines come from offshore
drilling, so I am not quite sure what your point is. Could you
reframe the question?
Mr. Graves. Well, that is not an accurate statement. Oil
and pipelines do not come from offshore drilling. That is one
of many forms of transportation, but it would come from all
sorts of different needs to transport oil. It is a safer means
of transportation, as compared to barges or trains or other
things. It does not just come from the offshore----
Ms. Howell. But the material in the pipeline is oil, or
some derivative of oil.
Mr. Graves. Sure.
Ms. Howell. So, if you didn't have oil drilling, you
wouldn't have oil pipelines.
Mr. Graves. And if you didn't have oil drilling, you
wouldn't be here today. You flew here I am going to assume.
Ms. Howell. Yes, I am not arguing against oil and gas
production in the United States. I am arguing against oil and
gas production on the Atlantic Coast. I just want to be clear
about that.
Mr. Graves. OK. You made a statement about a half-truth,
and I just wanted to make sure, if I said something inaccurate,
that we clarified that.
Ms. Howell. Good, I am glad we cleared that up.
Mr. Graves. And I am not sure that anything happened there.
But thank you.
Ms. MacGregor, can I ask you a question? There was
discussion earlier about the amount of production from offshore
energy under a previous administration. This Administration
thinks along those lines. Approximately how long does it take
from a lease sale to actual production activities?
Ms. MacGregor. It could be 7 to 10 years from a lease sale
to reaching production-producing quantities. Oh, yes.
Mr. Graves. So, effectively, as we discussed at the last
hearing, OCS production in 2008, as I recall, or the lease sale
generated approximately $17 billion. In the last year of the
Obama administration, it was approximately 2.7 billion. The lag
time, you add in 7 to 10 years for production. So, effectively,
production is largely a result of the previous administration
on the offshore?
Ms. MacGregor. That would most likely be correct. And I
think it is also important to point out that in 2008 a lot of
the successful revenue results that you are citing involve
Chukchi Sea lease sales, which we cannot conduct under the
current plan.
Mr. Graves. Thank you.
Ms. LeBlanc, thank you very much for being here, and I
appreciate all the work that you have done in the past. As I
recall, approximately 35 percent of the oil and gas workforce
in the state of Louisiana has lost their job within the past 2
years.
Could you comment a little bit about just what you see,
anecdotally, for example, down in Fourchon in regard to the
number of boats that are tied up, and things like that, just
what your view of the state of the industry is?
Ms. LeBlanc. Yes, Congressman, thank you for the
opportunity to be here today. I appreciate that.
Obviously, with the decline in commodity prices, as of
lately we have seen a decline in oil and gas jobs in our
economy in south Louisiana. It has been a hardship to the folks
in Lafourche Parish, Terrebonne Parish, throughout the state,
who service offshore oil and gas.
I will also tell you that, besides just the crude oil--the
market price and the commodity price, the increased regulatory
regime that we are under have also hindered some of the
offshore development and the investments offshore. So, it is
tough times in Louisiana right now. We look forward to working
with this Administration on not rolling back regulations, but
reshaping regulations and re-evaluating the regulations, and
some of the provisions in the regs actually may increase risk,
due to their prescriptive nature.
So, a combination of decreased commodity prices as well as
increased regulatory regime, but it is tough times down in
Louisiana right now.
Mr. Graves. Ms. LeBlanc, you previously worked for Restore
or Retreat, for coastal restoration and ecological restoration
activities in Louisiana. Would you advocate or support anything
that would result in increased oil spills in coastal Louisiana?
Ms. LeBlanc. Absolutely not. The last thing that we want in
Louisiana--like I said, we live here, we work here, we play
here. We do not want an oil spill. Oil spills are a tragedy on
many levels, and we absolutely do not want tragedy.
I think, as you said earlier, there are so many
misperceptions about the oil and gas industry, and I look
forward to clarifying some of those.
Mr. Graves. Two quick points. One, Ms. Tsongas mentioned
their offshore wind production, and I want to commend
Massachusetts for doing that, the Cape Wind project. I did some
work on that years ago, and I think it is great. I also
recall--and this statistic is certainly dated, but years ago, I
had to calculate the energy production for the state of
Massachusetts compared to Louisiana. At the time, Massachusetts
consumed 65 times more energy than they produced, so it is
important just to note that people actually need energy. It
does not just come out of the socket. There is actually a whole
upstream side behind it.
Number two, I actually want to commend Mr. Brown. I thought
his comments were very balanced and appropriate, and would like
to associate myself with his comments. I think that we do need
to continue looking across the board at all energy sources,
including alternative. I think it is important to recognize
that--I am going to take a wild estimation here and say, of the
roughly $200 billion produced from offshore energy revenues,
the far majority of that has gone back into the general
treasury to fund things like alternative energy research,
climate change research, energy efficiency programs, and many,
many other things across government, including the Land and
Water Conservation Fund.
With that, I yield to the gentleman from California, Mr.
Lowenthal.
Dr. Lowenthal. Thank you. Mr. Chair, will it be possible
also for Mr. Beyer to ask a question?
Mr. Graves. Oh, I am sorry----
Dr. Lowenthal. No, I am going to start next.
Mr. Graves. Absolutely.
Dr. Lowenthal. I am going to start next, but thank you. The
first thing is I want to ask unanimous consent to submit three
letters from the Department of Defense which support the
moratorium on the Eastern Gulf of Mexico into the record.
Mr. Graves. Without objection.
[The information follows:]
DEPARTMENT OF DEFENSE,
Office of the Under Secretary of Defense,
Washington, DC 20301-4000
April 26, 2017
The Honorable Matt Gaetz
U.S. House of Representatives
Washington, DC 20515
Dear Representative Gaetz:
Thank you for your letter dated March 24, 2017, regarding
maintaining the moratorium on oil and gas activities in the Gulf of
Mexico beyond 2022. Since military readiness falls under my purview, I
have been asked to respond to your letter on behalf of the Secretary of
Defense. The Department of Defense (DoD) cannot overstate the vital
importance of maintaining this moratorium.
National security and energy security are inextricably linked and
the DoD fully supports the development of our nation's domestic energy
resources in a manner that is compatible with military testing,
training, and operations. As mentioned in your letter, the complex of
eastern Gulf of Mexico operating areas and warning areas provides
critical opportunities for advanced weapons testing and joint training
exercises. The moratorium on oil and gas ``leasing, pre-leasing, and
other related activities'' ensures that these vital military readiness
activities may be conducted without interference and is critical to
their continuation. Emerging technologies such as hypersonics,
autonomous systems, and advanced sub-surface systems will require
enlarged testing and training footprints, and increased DoD reliance on
the Gulf of Mexico Energy Security Act's moratorium beyond 2022. The
moratorium is essential for developing and sustaining our nation's
future combat capabilities.
Since signing the 1983 ``Memorandum of Agreement Between the
Department of Defense and the Department of the Interior on Mutual
Concerns on the Outer Continental Shelf,'' the two departments have
worked cooperatively to ensure offshore resource development is
compatible with military readiness activities. During recent
discussions between the DoD and the Department of the Interior's Bureau
of Ocean Energy Management, a question arose concerning whether
Congress intended the moratorium to prohibit even geological and
geophysical survey activities in the eastern Gulf. We would welcome
clarification from Congress concerning this matter.
On behalf of the Secretary, I appreciate your interest in
sustaining our testing and training activities in the eastern Gulf of
Mexico.
Sincerely,
A. M. Kurta,
Performing the Duties of the Under Secretary of
Defense for Personnel and Readiness.
______
DEPARTMENT OF DEFENSE,
Department of the Air Force,
Washington, DC 20330
June 23, 2017
Hon. Rob Bishop, Chairman,
House Committee on Natural Resources,
U.S. House of Representatives,
Washington, DC 20510.
Dear Mr. Chairman:
I write this letter in whole-hearted support of a proposal seeking
to extend the moratorium on leasing, pre-leasing, or any other related
activity in any area east of the Military Mission Line in the Gulf of
Mexico. I understand you, as Chairman of the Natural Resources
Committee, must grant a jurisdictional waiver for this provision to be
considered for the National Defense Authorization Act for Fiscal Year
2018.
The Air Force fully supports the development of our nation's
domestic energy resources in a manner that is compatible with the
military testing, training, and operations. The complex of eastern Gulf
of Mexico operating areas and warning areas provides critical
opportunities for advanced weapons testing and joint training
exercises. The moratorium on oil and gas leasing, pre-leasing, and
other related activities ensures that these vital military readiness
activities may be conducted without interference and is critical to
their continuation. Of course, we are always willing to work with the
appropriate agencies to see if there are ways to explore for energy
without hampering air operations.
The moratorium is essential for developing and sustaining the Air
Force's future combat capabilities. Although the Gulf of Mexico Energy
Security Act's moratorium does not expire until 2022, the Air Force
needs the certainty of the proposed extension to guarantee long-term
capabilities for future tests. Emerging technologies such as
hypersonics, 5th generation fighters, and advanced sub-surface systems
will require enlarged testing and training footprints, and increased
Air Force reliance on the moratorium far beyond 2022.
Please don't hesitate to contact me if you have any questions. I
look forward to continuing our work with you to ensure America's Air
Force remains the very best.
Sincerely,
David L. Goldfein,
General, USAF
Chief of Staff
______
DEPARTMENT OF DEFENSE,
Department of the Air Force,
Washington, DC 20330
June 27, 2017
The Honorable Bill Nelson
United States Senate
Washington, DC 20510
Dear Senator Nelson:
I write this letter in whole-hearted support of a proposal seeking
to extend the moratorium on leasing, pre-leasing, or any other related
activity in any area east of the Military Mission Line in the Gulf of
Mexico. I understand this provision is being considered for inclusion
in the National Defense Authorization Act for Fiscal Year 2018.
The Air Force fully supports the development of our nation's
domestic energy resources in a manner that is compatible with the
military testing, training, and operations. The complex of eastern Gulf
of Mexico operating areas and warning areas provides critical
opportunities for advanced weapons testing and joint training
exercises. The moratorium on oil and gas leasing, pre-leasing, and
other related activities ensures that these vital military readiness
activities may be conducted without interference and is critical to
their continuation. Of course, we are always willing to work with the
appropriate agencies to see if there are ways to explore for energy
without hampering air operations.
The moratorium is essential for developing and sustaining the Air
Force's future combat capabilities. Although the Gulf of Mexico Energy
Security Act's moratorium does not expire until 2022, the Air Force
needs the certainty of the proposed extension to guarantee long-term
capabilities for future tests. Emerging technologies such as
hypersonics, 5th generation fighters, and advanced sub-surface systems
will require enlarged testing and training footprints, and increased
Air Force reliance on the moratorium far beyond 2022.
Please don't hesitate to contact me if you have any questions. I
look forward to continuing our work with you to ensure America's Air
Force remains the very best.
Sincerely,
David L. Goldfein,
General, USAF
Chief of Staff
______
Dr. Lowenthal. Thank you. These questions on royalties are
again for Ms. MacGregor. I appreciate your answers and your
forthrightness, and I find it very refreshing.
Last week, the Bureau of Ocean Energy Management (BOEM)
announced that it was lowering the royalty rate for shallow
water leases in next month's Gulf of Mexico lease sale. The
announcement of this move noted that BOEM carefully considered
the whole range of factors in making this decision. Will you
make that analysis of BOEM available to this Committee?
Ms. MacGregor. I will have to go back and grab it, but we
can take a look and talk to you after.
Dr. Lowenthal. Well, I strongly support, because we don't
think that BOEM should have anything to hide. So, we would
really appreciate your doing that, because the press release
said that BOEM looked at market conditions.
The question is, did the Bureau consider the value of
waiting until prices were higher until leasing these areas?
Because it seems to me that we have a huge glut now in the oil
and natural gas, and there are two ways to handle these public
resources and the situation. The first way is to make them even
cheaper to encourage what we believe--I would, others might
not--as unnecessary drilling and fewer royalties.
Or, alternatively, keep the royalty rate where it is, and
wait until the market adjusts to the point where it is actually
worth drilling for those resources. Then the American public
gets a fair return on the oil and gas that they own. This is a
question that we have been wondering about.
Did BOEM look at that?
Ms. MacGregor. BOEM's economic team is absolutely stellar.
They do hurdle price analysis all the time. Their economic
analysis was very thorough.
Dr. Lowenthal. Will we get a copy of that economic
analysis?
Ms. MacGregor. I hope to be able to share that with you.
Dr. Lowenthal. Because we would like to be able to say it
is stellar, also, but we cannot do that unless we see it. So,
thank you, I do appreciate that.
It just seems to me, from my point of view, that we should
not be providing the subsidies to the companies just because
oil and gas is cheap. We don't need to encourage the drilling
just because we can. It should be a priority.
If BOEM's analysis shows that it is, that is one thing. But
just because it is cheap should not be a reason to encourage
the drilling by lowering the prices at this time to the
American public.
BOEM also said it was looking at the price-based royalty
system, which would provide an incentive to lease when prices
are low, ensure a greater return to the American people when
prices are high. As we have reached now record-high production
with low oil prices, and royalty rates where they are right
now, I certainly believe that royalty rates do not need to be
any lower than they are right now.
Can you assure us that BOEM will not lower the prices below
where they are now, as a result of this review?
Ms. MacGregor. By statute they cannot go below 12.5
percent.
Dr. Lowenthal. But they are 18.75 right now.
Ms. MacGregor. Currently they are 18.75 in deep water. But
for the lease sale this August, we only lowered the royalty
rate for very shallow water leasing, which tends to be more
natural gas-prone.
Dr. Lowenthal. Will you give us all that data and what that
analysis was, why it is only in certain particular spots and
why you are justifying just doing it in particular areas?
Ms. MacGregor. Sir, absolutely, and I would love for you to
come to a lease sale, and we could talk about this, and
actually see how it works and how it is implemented.
Dr. Lowenthal. Because the critical question is not whether
we support or don't support. I personally talked about the
support of the Gulf. But we are talking about the royalty rates
now, and how those rates are arrived at, and are the people
getting a fair return on their money.
Ms. MacGregor. Absolutely, and the Secretary has made that
a high priority, as well, so you two share that goal. And he
recently reinstituted the Royalty Policy Committee to take a
look at that, as well.
Dr. Lowenthal. Again, the more we are a partner in that,
and we see that data, the more we will be able to either oppose
it or support it based upon the facts. Thank you. I yield back.
Mr. Graves. The gentleman from Virginia, Mr. Beyer, for 5
minutes.
Mr. Beyer. Thank you, Mr. Chairman, very much. My friend,
the Chairman, Mr. Graves, had talked about the offshore wind
potential in Massachusetts. In Virginia, we were very proud to
be awarded the first wind energy research lease in these
Atlantic Coast waters. They are highly desirable and
competitive. It has been a lot slower than we predicted; we
thought we were going to have the turbines in place by this
year, and only this Monday, 2 days ago, did Dominion announce a
deal to work with DONG Energy to put in the pilot turbines.
So, Ms. MacGregor, given the timelines we have seen, is
there anything that you can do or Interior can do to ensure
that the companies who win the leases actually act on them?
Ms. MacGregor. I would love to speak with you more about
that. Again, I think that sometimes we get mischaracterized for
some reason that we are not supporting all-of-the-above, and
absolutely recognize that renewable energy is part of the
Bureau of Ocean Energy Management's portfolio. Right now we
have offshore wind lease sales off of every coast in the
Atlantic, from North Carolina to Massachusetts. And we had our
second-highest most successful offshore wind lease sale a few
months ago, off the coast of North Carolina.
But I am aware of Dominion and DONG's project, and we are
more than happy to talk to you about what the next steps are,
and ways to look at our own internal regulatory processes and
areas that might burden that development.
Mr. Beyer. Yes. And, Mr. Chairman, respecting that we will
always be using some fossil fuels, I was very proud to note
that Volvo announced in the last week to moving all-electric
vehicles by 2018. As a 43-year Volvo dealer, that was a pretty
cool thing.
Ms. MacGregor, by the way, thank you for coming back again
and again. You are long-suffering and very patient with us.
[Laughter.]
Mr. Beyer. At our last hearing, I asked you about, as
Secretary Zinke looks at the reorganization of Interior, writ
large, about potentially putting BOEM and BSEE back together
again. Any progress on that?
And will you ultimately be able to tell us, if that is the
decision made, what the real advantages are to recombining
them, and what the cost is of having split them out in the
first place? You will recall at that point I mentioned that
this came out of Deepwater Horizon. The concern was you would
have the fox guarding the henhouse once again.
Ms. MacGregor. Yes, I remember that question. I don't think
I am the fox guarding the henhouse in any way. But, given that,
I will only ever work for the American people.
After the split-up of MMS, the agency was split into three
separate bureaus. Obviously, this was done by Secretarial
Order. There were different priorities, there were different
reasonings behind that, and, you are right, there was an
investment made by the Department to enact that. Again, no
decision has been made yet. We are still evaluating our
options, and looking at reorganization, department-wide. But
when a decision is made, you can be sure that it will have an
underpinning of analysis that will support our decision making.
Mr. Beyer. Great. And let me just make the plea, as a
humble member of the Democratic Minority, that that analysis
recognizes the dilemma that the agency designed to oversee
safety with the agency designed to stimulate production, and
how you reconcile those two, essentially, competitive
functions.
Thank you, Mr. Chairman. I yield back.
Mr. Graves. Thank you. I want to thank all the witnesses
for their testimony, and all the Members for their questions
today.
Members of the Committee may have some additional questions
for you, and we will ask you to respond to those in writing.
Under the Committee Rule 3(o), members of the Committee must
submit the witnesses' questions within 3 business days
following the hearing, and the hearing record will be held open
for 10 days for these responses.
If there is no further business, without objection, the
Subcommittee stands adjourned.
[Whereupon, at 12:01 p.m., the Subcommittee was adjourned.]
[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S
OFFICIAL FILES]
Rep. Beyer Submissions
-- Letter from Members of Congress addressed to Secretary
Zinke, dated June 28, 2017
-- Letter from a group of scientists addressed to the
President, dated April 14, 2016
[all]