Interior Department Proposes to Open Offshore Atlantic Region to Oil and Gas Leasing

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The Department of the Interior today announced that it will publish for public comment a draft proposed Five-Year Program (“DPP”) governing the leasing of offshore oil and gas for 2017 through 2022.  Interior’s DPP will follow the current 2012-2017 Five-Year Program (“current program”).

Under the Outer Continental Shelf Lands Act, Interior may not issue new offshore oil and gas leases unless the sale areas are included in the program then in effect.  In deciding which areas to include within the DPP, the Interior Secretary must balance a variety of factors, including but not limited to geographical, geological, and ecological characteristics, relative environmental sensitivities, expressions of interest by industry to develop oil and gas reserves, and impacts on surrounding marine activities. 

Interior’s DPP would schedule the majority of lease sales in the Central and Western Gulf of Mexico, and other areas where leasing activity has been ongoing under the current program.  For the first time in decades, it would open the mid-Atlantic and South Atlantic regions where coastal states generally support offshore oil and gas leasing and development.  To accommodate environmental concerns, Interior is proposing a 50-mile buffer for these areas.  The DPP also contemplates new lease sales offshore Alaska, but excludes certain areas designated for marine mammal protection.  To the disappointment of the oil and gas industry, the DPP does not include areas in the Eastern Gulf of Mexico (offshore Florida).  The Pacific region and other areas off-limits in the current program likewise would remain unavailable for leasing.

The process to adopt a Five-Year Program is multi-phased and takes several years to complete.  There are multiple opportunities for governors of affected coastal states, local jurisdictions, and the public generally to comment on the evolving program, which is accompanied by the preparation of an Environmental Impact Statement under the National Environmental Policy Act (“NEPA”).  If adopted, the DPP would not commit the government to actually conduct any lease sales; those would be separate decisions that would, among other things, require independent NEPA review.  Nevertheless, it is important for industry and other commenters to weigh in on the recently-announced DPP to assist Interior in making the statutorily required balancing decisions, and to ensure that Interior retains in its final program all of the areas available in the DPP.  Comments are due by March 28, 2015.

Beveridge & Diamond’s Natural Resources and Project Development team advises clients on the complex legal issues impacting development of energy resources on federal lands and the Outer Continental Shelf.  To discuss these issues further, please contact the authors or any member of our Natural Resources and Project Development Practice Group.  The DPP is available here.