Salazar, Offshore Oil Foes Find Little Room for Compromise

NEW YORK (Dow Jones Newswires), Apr. 13, 2009

The Obama administration is winning little new support for a compromise proposal to explore for oil and gas in federal waters without drilling.

Interior Secretary Ken Salazar floated the idea at a public meeting in Atlantic City last week, but was rebuffed by environmental groups, which oppose any new offshore exploration for fossil fuels. Salazar is holding forums in four cities to help determine how, or whether, to allow oil and gas development in coastal waters kept off-limits to the industry by a federal moratorium until recently. He will travel to Anchorage on Tuesday and San Francisco on Thursday.

"We need to know what the facts are, we have to make (decisions) based on the best knowledge we have," Salazar said, responding to a statement by Jacqueline Savitz, a senior director with Oceana, a marine conservation group. "Our information on the Atlantic is 25 years old...we haven't done any scientific assessment of what's out there."

Salazar was referring to seismic imagery, which uses sound waves to map geological formations beneath the seabed. Seismic testing is typically one of the first steps taken to assess an area's potential for oil and gas reserves.

The moratorium, covering federal waters off the Atlantic and Pacific coasts, as well as parts of the Gulf of Mexico and offshore Alaska, was allowed to expire last year. Oil prices were close to a record high at the time, increasing pressure to find new sources of energy. Although prices have since fallen sharply, President Barack Obama has not dismissed the Bush administration's push for increased offshore drilling, even as he rolls back some of his predecessor's other industry-friendly energy initiatives.

The negative response from environmentalists to the seismic trial balloon indicates that the Obama administration will have difficulty convincing erstwhile allies to support even the most tentative steps that might lead to new offshore oil and gas development. Environmental groups view seismic testing as a threat to marine mammals that use sound to navigate. They also fear that seismic tests will bolster the industry's case for further development if the images point to large oil and gas deposits.

"If it doesn't make sense to drill for oil for economic reasons or environmental or climate doesn't make sense to spend more money on seismic testing," Savitz said in an interview.

A decision on seismic testing wouldn't come until after a public comment period ends in September, said Frank Quimby, an Interior Department spokesman. He portrayed Salazar's remarks on the need for seismic testing as purely hypothetical.

"(Salazar) is just putting it out there, he's not saying 'therefore we have to'" conduct tests, Quimby said.

Outdated Data

The U.S. Minerals Management Service is using 25-year-old data in some locations and blind estimates in other areas, to estimate the resources available offshore.

Based on that limited information, the MMS believes that about 45 billion barrels of oil and 208.85 trillion cubic feet of gas could be recovered from waters that were off limits. That's roughly equal to the resources thought to be available in the portions of the Gulf of Mexico already open to exploration, which currently meets about 7% of the nation's oil demand.

"We need new data, we have much better technology now," said Andy Radford, a senior policy advisor with the American Petroleum Institute, an energy industry group that is lobbying for expanded offshore development. "We've found much more oil (in the Gulf) than was thought to have been out there in the first place."

The MMS estimates that a complete government-funded survey of just one of the 26 subdivisions that cover federal waters would cost up to $175 million and take between six and 10 years. Selective, industry-funded testing of the most promising areas would require considerably less time and money, Radford said.

Environmental groups oppose either route, claiming that a single round of tests would only lead to further seismic activity.

"It's never just one survey," said Michael Jasny, a senior policy analyst with the National Resources Defense Council.

Seismic tests, which usually involve firing an air gun underwater to create sound waves, have been found to disrupt feeding and mating habits for whales and other marine mammals up to 3,000 miles away, Jasny said. Conservationists also point to recent whale beachings in areas where seismic testing was known to be underway.

Experimental seismic techniques that muffle high-frequency sound used by whales but not to map oil reserves could eventually provide ground for compromise, Jasny said.

"This is a problem for which there may be some technological solutions," Jasny said.  

Copyright (c) 2009 Dow Jones & Company, Inc.


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R. Benoit | Apr. 15, 2009
Ditto Ron Emerson! I'm a species too! David H said it best; "we have not done all that we can to prove to these fanatical groups that we are concerned about environmental preservation." I mean, given the extraordinary times we have enjoyed for the last decade, we could have done more. We are also going to need to polish up on our Russian as well Dick.

George Brown | Apr. 14, 2009
As I have said before because there is, nor never has been any common sense to the left we will have to wait for the next rise in the price per barrel which will lead to higher prices than we have seen to date. All that has to be done is put up the recent graphs of boom and bust in the industry and rename it the the Environmental Idiot Scale.

Someone tell me why the Gulf of Mexico, which is the grandfather of offshore exploration, is one of the healthiest sport and commercial fisheries in the world after 50+ years of oil and gas development. Also why aren't all of our coastal cities and vast coastlines deadzones? I could go on, but no one with any common sense is listening. The fact is our industry has waited until common sense, as with God, has sadly been removed from the public conscience.

Howard Wilshire | Apr. 14, 2009
Sure, we know the data are old. So why is it the MMS still gives us figures on undiscovered oil and gas quoted to the second decimal place?

David H | Apr. 14, 2009
Since radical Environmentalism is simply part global power grab and part paganism (i.e. earth or animal worship), personally I doubt that these people care about energy strategy, jobs, or even the economy. Like the Obama administration, their actions are based on a dogmatic ideology that will not be affected by debate, negotiation, or supposed compromise.

The oil industry needs to listen and to adapt where it makes good economic and environmental sense to do so yes, but we also need to understand what we're up against and try to do our best to shape public opinion where we can ... which historically we have not done well.

Michael Strikmiller | Apr. 14, 2009
Most of these groups don't realize the impact oil and natural gas has to the US economy. It is our use of these two natural resources that keeps our nation from becoming another third world country. There are many nations around the world that have far more natural resources than the US, but they don't use them, we do. They are third world countries; we are not. Using oil and natural gas is what makes this nation first among all nations.

Dick Davis | Apr. 14, 2009
If Washington and the politicians continue their current lack of an energy plan, we all had better learn to speak Chinese.

David | Apr. 14, 2009
Clearly, there are anti-drilling groups that can't see beyond their own interests. Has seismic testing off the coast of Brazil or China caused them such consternation? Our country will need the energy whether we produce it or continue to hand over our dollars and security to other foreign providers.

Ron Emerson | Apr. 14, 2009
Consider the humans feeding and mating habits! We desperately need to get industry activity encouragement; let's get on the move, Drill here, Drill now. We need to protect the Planet including the people on it.


Ruben Mellado | Apr. 14, 2009
I think that these green people are realizing that there are Americans that are loosing their jobs daily in the oil & gas industry. This would help profoundly on our dependence on foreign oil and give people like myself who've been laid off from working offshore new opportunities.

Roger Morgan | Apr. 14, 2009
It sounds as though a small, vocal, and ignorant, minority in the States would like to return to the horse-and-buggy world of the Amish. For the world's most profligate user of fossil fuel energy products to willfully bury its collective head in the sand over something as basic as examining its own continental shelf for hydrocarbon deposits should be as frightening for the future just 20 years away, as the present financial melt-down is to tomorrow. I's quite clear that the United States has no realistic Energy Policy, and a political system that is unlikely to provide answers to the big questions.

Herman | Apr. 13, 2009
I think that these people and groups that are against expanding the drilling should look at their mode of transportation. I mean places like California, Alaska, Florida and Virginia should rethink this because this is a massive fix for the economy and more jobs, which means more tourist dollars for these areas. The wells can be directionally drilled into these reservoirs.

Tom Jones | Apr. 13, 2009
The areas around South Florida within +100 miles of the coast should be the first area of seismic testing. National security is the primary concern since China has discovered oil/gas between Havana and Miami. They could come in and start drilling horizontal into potential U.S. reserves. Production credits should only be extended to wells drilled +25,000 or more.

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