When it comes to pursuing new offshore oil and natural gas production, the Atlantic Coast is proving to be a tough target. In this week’s Oilgram News column, Regulation and Environment, Gary Gentile explains what’s currently happening — and what’s not happening — off the Eastern shores and why.

In the coming months, a double-engine propeller plane, not unlike those dragging banners advertising Red Bull, will begin crisscrossing the Atlantic off the coast of Virginia.

Sensors on the plane will detect subtle shifts in the earth’s gravitational field. From those observations, ARKeX, a non-seismic, acoustic geophysical company, will begin compiling the first data on possible oil and gas resources in the Atlantic in more than three decades.

The company’s non-invasive method is the only one out of nine permits that have been approved by the US Bureau of Ocean Energy Management to collect resource data off the Atlantic coast. The rest languish in a bureaucratic purgatory, with no apparent urgency being displayed by the government agencies considering them.

On one hand, there is no urgency. The earliest a proposed lease sale off the Virginia coast could happen is 2021, according to the next five-year offshore leasing plan. That’s nearly a decade after Lease Sale 220, which had been proposed for an area offshore Virginia in 2012.

That lease sale was canceled after the 2010 Deepwater Horizon disaster in the Gulf of Mexico.

The Obama administration is in no apparent rush to gather fresh resource data off the Atlantic coast, despite the expressed desire by many states to develop oil and gas resources off their shores.

While BOEM has issued a permit for the non-seismic survey being conducted by ARKeX, it claims it is powerless to issue permits for more detailed — and intrusive — 2-D and 3-D seismic surveys because other agencies have yet to weigh in on them.

Of the nine permits under consideration, seven of them await word from the National Marine Fisheries Service for the euphemistically-named “Incidental Take Authorization.”

In plain English, that means permission to kill or otherwise “harass” a number of marine mammals as an “incidental” consequence of non-fishing activities, such as geophysical surveys.

While such interagency paralysis is not unusual, it does stand in stark contrast with how the Obama administration has handled applications for exploration and production in the Arctic frontier areas offshore Alaska.

In 2011, Obama created the Interagency Working Group to, among other things, simplify the decision-making process on permits to develop Alaska’s energy resources. The group aimed to “speak with one voice” as it coordinated the efforts of the several agencies that share jurisdiction over the offshore.

The efforts of that group can be seen in how quickly Shell has been able to navigate the choppy bureaucratic seas and obtain the myriad permits to resume exploration offshore Alaska.

No such working group, or anything remotely like it, has been formed to coordinate energy development off the Atlantic coast. As a result, despite the fact that the US Interior Department has concluded that the kind of acoustic techniques necessary to obtain seismic data are not harmful, no permits for seismic studies have yet been issued.

It is interesting to recall comments made by the administration in the weeks before the April 2010 Deepwater Horizon tragedy.

On March 31, Obama stood in a hangar at Andrews Air Force Base and announced a plan to open 167 million acres of ocean stretching from Delaware to central Florida to oil and gas exploration.

In his speech, he mentioned that the decision would be unpopular with environmentalists as well as “drill, baby, drill” proponents.

But, he said, “…this issue is just too important to allow our progress to languish while we fight the same old battles over and over again.”

There are still many challenges that stand in the way of exploration in the Atlantic.

For one thing, there is yet no mechanism for the federal government to share revenues with individual states for energy pumped off their shores. The enthusiasm that Virginia has for offshore drilling may wane if they are not guaranteed a piece of the pie.


Military exercises, the importance of preserving pristine tourist-friendly beaches, the difficulty of preventing a spill from drifting north to New Jersey and south to Florida — all these are critical issues to be worked out.

But nothing can happen until first the government and interested companies have fresh, accurate data on the potential resources in the Atlantic. And that won’t happen until permits are issued.
Unless, of course, the government is no hurry to allow such exploration.

That possibility was raised at a recent hearing of the House Natural Resources Committee, where Chairman Doug Lamborn summed up the frustration of many observers.

“Why should it take so long to get a permit?” he asked. “I have yet to hear a reasonable answer to this question.”
Source: Platts