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On June 6, 2013 and June 11, 2013 the House Natural Resources Committee held hearings on the Offshore Energy and Jobs Act (H.R. 2231). The proposed bill would open new outer continental shelf (OCS) land for leasing, unlocking an estimated 2.5 billion barrels of oil, and more than 7.5 trillion cubic feet of natural gas for production.
Subcommittee Chairman Doug Lamborn (R-CO) and other supporters of the bill argued that although oil and gas production in the U.S. has increased in the past year, production on federal lands has decreased. They also argued that because exploration and full-scale production and of oil and natural gas reserves takes time to develop, we need to begin the process as early as possible.
Opponents of the bill, including Subcommittee Ranking Member Rush Holt (D-NJ), said that since production in the U.S. is at a high, we do not need to start leasing new areas. Michael Conathan, Director of the Ocean Policy Center for American Progress Action Fund, claimed that leasing new areas would unnecessarily expose new areas to the risks of drilling. Instead, Conathan said, we should begin focusing on alternative energy sources, such as offshore wind.
The Bureau of Ocean Energy Management (BOEM) and the National Marine Fisheries Service (NMFS) held a series of public scoping meetings across the U.S. regarding the Programmatic Environmental Impact Statement (PEIS) to analyze the impacts of geological and geophysical activity in the Gulf of Mexico.
The PEIS will extend from the shoreline to the outer continental shelf, and will take into account all geological and geophysical activity in the Gulf of Mexico, including seismic, magnetic, and gravitational activity, as well as drilling, and other assessments. The PEIS will also analyze the impacts of increased oil and gas production on sociological, biological, and physical resources in the Gulf of Mexico.
The final PEIS is expected to be released in early- to mid-2015.
On June 19, the Senate passed S. 244, a bill designed to amend the Energy Policy Act of 2005 to streamline permitting for oil and gas projects on federal lands in North and South Dakota. Introduced by John Hoeven (R-ND) and Heidi Heitkamp (D-ND), the bill extends a Bureau of Land Management federal permit streamlining program to include federal lands in the Dakotas. A related bill, H.R. 767, passed the House on May 15, 2013.
The USGS estimates that the Bakken and Three Forks Formations contain approximately 7.4 billion recoverable barrels of oil and 6.7 trillion cubic feet of associated/dissolved natural gas. Currently, the majority of development has occurred on private lands where permitting is faster.
A map of the Bakken and Three Forks Formations within the Williston Basin of North Dakota, Montana, and South Dakota (Photo Credit: USGS)
In the U.S. Energy Information Agency’s (EIA) Annual Energy Outlook 2013 (AEO2013), which presents yearly projections and analysis of energy topics based on current conditions, projected domestic crude oil production ranges from 6-8 million barrels per day for the next 30 years. However, using greater supply assumptions, domestic crude oil production could be sustained at approximately10 million barrels per day between 2020 and 2040. This higher resource case was developed by the EIA to analyze the effects of higher domestic production on energy demand, imports, and prices. In this scenario, total domestic liquid fuel production (which includes crude oil, natural gas liquids, biofuels, and other liquid fuels) increases to greater than 18 million barrels per day in 2040. This level of domestic production reduces projected imports to just 7% or less of total demand, a significant decrease when compared to nearly 40% in 2012.
On June 6, 2013, in a Senate Committee on Energy and Natural Resources hearing, Secretary of the Interior Sally Jewell announced that the Department of the Interior will extend the comment period on the revised proposed rule on Oil and Gas; Well Stimulation, Including Hydraulic Fracturing, on Federal and Indian Lands . The comment period was due to close June 24, 2013, and will now be extended 60 days, closing on August 23, 2013. 177,000 comments had been received as of June 6.