Next 5-year OCS program should be more ambitious, API official urges

An American Petroleum Institute official called on President Barack Obama’s administration to maintain and promote US offshore oil and gas development during the 2017-22 federal program now being prepared.

The official’s Apr. 26 recommendation came after Washington energy experts at a Center for Strategic and International Studies conference on the 2016 elections and US policies warned the same day against relying solely on onshore resources to meet future domestic demand (OGJ Online, Apr. 26, 2016).

“The 5-year program up for discussion at today’s public meeting here in Washington proposes lease sales so that industry can continue to develop the plentiful oil and gas resources available in these [offshore] areas, and their significance for the nation’s future cannot be overlooked,” said API Group Director of Upstream and Industry Operations Erik Milito.

The program is a critical part of the nation’s ability to secure affordable and reliable energy and create jobs for future generations of Americans, he told reporters in a teleconference. “Too many promising areas are already excluded from the proposal, taking off the table thousands of potential jobs and billions of dollars in potential government revenue,” Milito said.

“Knowing that oil and gas will be needed for many more decades to come, the Department of the Interior should promote robust development of US offshore energy resources and recognize the Arctic and Gulf of Mexico as core components of the 5-year program,” he said.

Milito’s remarks came more than a month after DOI and the US Bureau of Ocean Energy Management removed a Mid-Atlantic lease from the 2017-22 program now being prepared (OGJ Online, Mar. 15, 2016). Officials cited growing expressions of concern from the US Department of Defense regarding impacts on its activities and from coastal communities and elsewhere about potential environmental impacts.

Won’t harm US security

“The market reality now is that onshore production has increased in the last few years,” BOEM Director Abigail Ross Hopper said at the time. “When we look at the production we’d receive from a single lease sale in the South Atlantic, we determined that national security would not be hurt if it didn’t take place.”

Milito said the sale was canceled despite strong support for it in Virginia (65%), North Carolina (64%), and South Carolina (67%) in recent statewide polls. “The administration should not exclude additional areas or reduce the number of proposed lease sales,” he stated.

In the Arctic, the US has large oil and gas potential where expanded access could contribute significantly to meeting future domestic and global energy needs, he continued. Most of the US Arctic’s potential is undiscovered and offshore, in relatively shallow water depths of less than 100 m, Milito said.

“The technology to explore for and develop the majority of this is available today, based on a long history of technology development and partnerships already applied in the US and global Arctic,” Milito said. “There have also been significant recent US-led technology advances in oil spill prevention and response. Application of these technologies in the US Arctic would improve environmental stewardship and reduce costs.”

Russia and other nations are moving ahead with Arctic economic development, he added.

Contact Nick Snow at

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