Introduction
Under the Outer Continental Shelf Lands Act (OCSLA), as amended,1 the Department of the Interior (DOI) must prepare and maintain forward-looking five-year plans—referred to by DOI as five-year programs—that indicate proposed public oil and gas lease sales in U.S. waters over a five-year period.2 In preparing each program, DOI must balance national interests in energy supply and environmental protection.3 The lead agency within DOI responsible for the program is the Bureau of Ocean Energy Management (BOEM).4
BOEM's development of a five-year program typically takes place over two or three years, during which successive drafts of the program are published for review and comment. All available leasing areas are initially examined,5 and the selection may then be narrowed based on economic and environmental analysis to arrive at a final leasing schedule. At the end of the process, the Secretary of the Interior must submit each program to the President and to Congress for a period of at least 60 days, after which the proposal may be approved by the Secretary and may take effect with no further regulatory or legislative action.6
As required by the National Environmental Policy Act (NEPA), the planning process includes a programmatic environmental impact statement (PEIS).7 The PEIS examines the potential environmental impacts from oil and gas exploration and development on the outer continental shelf (OCS) and considers a reasonable range of alternatives to the proposed plan. Public comments from stakeholders, including state governors, companies, individuals, and public interest organizations, are addressed in both the PEIS and the five-year program itself. Because of the stages of review and comment required under both the OCSLA and NEPA, the Administration could not revise a finalized program—for example, to add new sales—without restarting the program development process. However, scheduled sales could potentially be cancelled (but not added) during implementation of the program, based on requirements for environmental review that are associated with each individual sale.
On November 18, 2016, then-Secretary of the Interior Sally Jewell submitted to Congress the third and final version of BOEM's oil and gas leasing program for 2017-2022.8 The Secretary issued a record of decision approving the final program on January 17, 2017.9 The final program was revised from a March 2016 proposed program (PP)10 and a January 2015 draft proposed program (DPP).11 The final program scheduled 11 lease sales on the OCS: 10 in the Gulf of Mexico region, 1 in the Alaska region, and none in the Atlantic or Pacific regions. Three sales proposed in earlier versions of the program—one in the Atlantic and two off of Alaska—were not ultimately included in the program. On January 4, 2018, the Trump Administration released a DPP for a five-year program for 2019-2024, which would replace the final years of the Obama Administration program.12 This DPP proposes a total of 47 lease sales during the five-year period, covering all four OCS regions.
The leasing decisions in BOEM's five-year programs may affect the economy and environment of individual coastal states and of the nation as a whole. Accordingly, Congress has typically been actively involved in the planning process for the five-year programs. Under the OCSLA, Congress's review of BOEM's final program does not include approval or disapproval of the program. However, Members of Congress may influence the program in other ways. Members may convey their views on the Administration's proposals by submitting public comments on draft versions of the program during formal comment periods, and they may evaluate the program in committee oversight hearings. More directly, Members may introduce legislation to set or alter a program's terms. Various Members of Congress pursued all these types of influence with respect to the proposed program for 2017-2022.
The first three sections of this report discuss the history and legal framework for BOEM's five-year leasing programs and outline the agency's development process. Subsequent sections briefly summarize previous programs and analyze the program for 2017-2022. The final section of the report discusses the role of Congress, with a focus on congressional oversight and legislation related to the 2017-2022 program. For a status report on the 2019-2024 program and issues for Congress, see CRS Report R44692, Five-Year Offshore Oil and Gas Leasing Program for 2019-2024: Status and Issues in Brief.
Historical Background13
In 1953, Congress enacted two laws that addressed jurisdiction and rights off the coasts of the United States, including rights to regulation of subsurface oil and natural gas exploration and production. The first of these acts, the Submerged Lands Act,14 provides that coastal states are generally entitled to an area extending 3 geographical miles15 from their officially recognized coasts (or baselines).16 The second, the OCSLA, defined the OCS as "all submerged lands lying seaward of" state coastal waters that are subject to the jurisdiction and control of the United States.17 The OCSLA has as its primary purpose "expeditious and orderly development [of OCS resources], subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs."18
As offshore activities expanded in the years following adoption of the OCSLA, Congress sought a means by which to allow for expedited exploration and production in order to achieve national energy goals while also providing for environmental protection, opportunities for state and local governments affected by offshore activity to have their voices heard, and a competitive bidding and leasing process.19 The product was the Outer Continental Shelf Lands Act Amendments of 1978.20 This legislation added a number of new provisions to the OCSLA, including Section 18, which mandates the creation and maintenance of an OCS leasing program to "best meet national energy needs for the five-year period following its approval or reapproval."21 These five-year programs, which include schedules for lease auctions, have provided the framework for OCS oil and gas exploration and production ever since the first one was adopted by DOI in 1980.
Although the 1978 amendments were the last major overhaul to the OCSLA, Congress has taken other actions since that time that have altered the scope of offshore oil and gas exploration and production. The Deep Water Royalty Relief Act of 1995 attempted to encourage exploration and production in deep water by providing relief from otherwise applicable royalty payment requirements for some deepwater oil and natural gas production.22 The Gulf of Mexico Energy Security Act of 2006 directed the leasing of certain regions of the Gulf of Mexico for oil and gas exploration and production and placed a moratorium on leasing in other regions.23 It also created a mechanism for sharing revenues from leasing in the region with Gulf states and the Land and Water Conservation Fund.24 Also, starting in 2008, Congress removed language from annual Interior appropriations legislation that had been in place to bar leasing and related activities in certain OCS regions.25 These legislative actions helped to shape subsequent five-year programs.
Legal Framework26
The statutory framework governing BOEM's development of a five-year offshore oil and gas leasing program includes the OCSLA as well as other federal statutes, particularly NEPA and the Coastal Zone Management Act (CZMA).27
Outer Continental Shelf Lands Act
Section 18 of the OCSLA provides:
The Secretary [of the Interior] ... shall prepare and periodically revise, and maintain an oil and gas leasing program to implement the policies of this subchapter. The leasing program shall consist of a schedule of proposed lease sales indicating, as precisely as possible, the size, timing, and location of leasing activity which he determines will best meet national energy needs for the five-year period following its approval or reapproval.28
Section 18 further provides that the OCS is to be managed in a manner "which considers economic, social, and environmental values" of the resources of the OCS as well as the potential impact of oil and gas exploration on the marine, coastal, and human environments.29
Specifically, Section 18 directs the Secretary to schedule the timing and location of oil and gas exploration and production among the regions of the OCS based on consideration of a variety of factors, including existing geographical, geological, and ecological characteristics of the regions; relative environmental and other natural resource considerations of the regions; the relative interest of oil and natural gas producers in the regions; and the laws, goals, and policies of the states that would be affected by offshore exploration and production in the region. In addition to striking this balance, leasing under the five-year program must also "be conducted to assure receipt of fair market value for the lands leased and the rights conveyed by the Federal Government."30 The OCSLA also requires that the five-year program include estimates on appropriations and staffing needs.31
The OCSLA also imposes a number of consultation requirements. During preparation of the five-year program, the Secretary of the Interior must "invite and consider suggestions for such program from any interested Federal agency, including the Attorney General, in consultation with the Federal Trade Commission, and from the Governor of any State which may become an affected State under such proposed program."32 In addition to these mandatory consultation requirements, the Secretary may choose to consult with local government officials in affected states.33
Once the Secretary has satisfied these consultation and other requirements and prepared a proposed program, that program must be submitted to the governor of each affected state for further comments at least 60 days prior to publication of the proposed program in the Federal Register.34 The OCSLA also authorizes the Attorney General, in coordination with the Federal Trade Commission, to submit comments regarding potential effects of the proposed program on competition.35 Subsequently, at least 60 days prior to its approval, the Secretary must submit the proposed program to Congress and the President, along with an explanation as to why any specific recommendation of the Attorney General or a state or local government was not accepted.36 Once these steps have been completed, the Secretary is free to approve a final five-year program. The OCSLA also authorizes the Secretary to revise the five-year program at any time pursuant to a mandated review, although any revision that is "significant" must go through the process for the initial five-year program described above.37
The responsibilities of the Secretary of the Interior with respect to the five-year program under the OCSLA are carried out by BOEM. The regulations applicable to BOEM's preparation of the five-year program include details regarding these consultation requirements. For example, BOEM is required to send letters to governors of affected states requesting that they identify specific laws, goals, and policies that they would like BOEM to consider during preparation of the five-year program.38 The regulations also outline requirements for publication of the proposed program in the Federal Register.
Other Federal Statutes
While the OCSLA and the applicable regulations guide the five-year planning process, other federal statutes also play a role in the program's formation. Two federal statutes that play a prominent role in the preparation of the five-year program are NEPA and the CZMA.
National Environmental Policy Act
Section 102(2)(C) of NEPA requires all federal agencies to prepare a detailed statement of the environmental impact of and alternatives to major federal actions significantly affecting the environment.39 In many cases the process for compliance with this requirement includes an environmental assessment (EA) that determines whether an action is a major federal action significantly affecting the environment.40 However, if the agency has determined that the proposed action is a major federal action without conducting an EA, then the agency moves directly to preparing the statement of the environmental impact of and alternatives to the proposed federal action, known as an environmental impact statement (EIS).41 This is the case with BOEM's five-year programs; the significance of the program's impact on the environment is assumed. Therefore, BOEM prepares a programmatic EIS (PEIS)42 concurrently with preparation of the five-year program. This process is explained in further detail throughout this report.
Coastal Zone Management Act43
Under the CZMA,44 states are encouraged to enact coastal zone management plans to coordinate protection of habitats and resources in coastal waters.45 The CZMA establishes a policy of preservation alongside sustainable use and development compatible with resource protection.46 State coastal zone management programs that are approved by the Secretary of Commerce are eligible to receive federal monetary and technical assistance. State programs must designate conservation measures and permissible uses for land and water resources47 and must address various sources of water pollution.48
The CZMA also requires that the federal government and federally permitted activities comply with these state programs.49 To that end, the BOEM regulations governing the five-year program provide that "[i]n development of the leasing program, consideration shall be given to the coastal zone management program being developed or administered by an affected coastal State."50 The regulations require BOEM to request information concerning the relationship between a state's coastal zone management program and OCS oil and gas activity from both the governors of affected coastal states and the Secretary of Commerce prior to development of the leasing program.51
Five-Year Program Development Process52
BOEM's development of a five-year program typically takes place over two or three years, during which successive drafts of the program are published for review and comment. The drafts are also submitted to state governors and federal agencies and, in later stages, to Congress and the President (see discussion of consultation requirements in the "Legal Framework" section, above). Each step of the process involves additional public comment and environmental review. After the program takes effect, individual lease sales also undergo environmental review and public comment, as do companies' exploration and development plans on leased tracts. Figure 1 outlines the steps from development of the five-year program to actual oil and gas production in an individual well.
|
Figure 1. OCS Oil and Gas Leasing, Exploration, and Development Process |
 |
|
Source: BOEM oil and gas leasing flow chart, at https://www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Five-Year-Program/BOEM-OCS-Oil-and-Gas-Leasing-Process-Diagram.aspx. |
Because of the analysis and review undertaken at each stage of drafting the five-year program, the successive drafts represent a winnowing process. The initial draft proposed program (DPP) examines all of the agency's available planning areas for oil and gas leasing,53 analyzing them according to factors in Section 18 of the OCSLA and considering public input, in order to develop an initial schedule of proposed lease sales. In subsequent versions of the program, BOEM might remove proposed sales on the basis of further analysis, but could not add new sales without reverting to an earlier stage of the process and undertaking new environmental reviews. The steps of the process are discussed in greater detail below.
- Step 1. Request for Information. BOEM initiates development of a new five-year program by publishing in the Federal Register a request for information (RFI) from interested parties concerning regional and national energy needs for the next five-year period; leasing interests of possible oil and gas producers; environmental concerns; and concerns of state and local governments, tribes, and the public, among other issues. The RFI for the 2017-2022 leasing program was published on June 16, 2014, and was followed by a comment period during which the agency received more than half a million comments.54
- Step 2. Draft Proposed Program/Notice of Intent for PEIS. BOEM publishes a draft proposed program (DPP), the first of three decision documents leading up to BOEM's eventual final program.55 The DPP analyzes all OCS planning areas available for leasing, taking into account comments received on the RFI, and identifies a preliminary lease schedule. BOEM published its DPP for 2017-2022 on January 29, 2015, with a comment period that closed on March 30, 2015.56 BOEM received more than 1 million comments on the DPP.
When the DPP is published, BOEM also issues a notice of intent (NOI) to publish a programmatic environmental impact statement (PEIS) for the proposed lease areas and seeks public input (through a scoping process) on the issues that should be analyzed in the PEIS. The NOI for the 2017-2022 program was published on January 29, 2015, along with the DPP.57
- Step 3. Proposed Program/Draft PEIS. After further analyzing the lease sale areas proposed in the DPP according to the required factors in Section 18 of the OCSLA, and taking into account the public comments received on the DPP, BOEM publishes a proposed program (PP). This second version refines the proposed locations and timing for OCS oil and gas lease sales. BOEM submits the PP to Congress, state governors, and relevant federal agencies and also solicits public comment on the program. BOEM published the PP for 2017-2022 on March 15, 2016, with a comment period that closed on June 16, 2016.58
The PP is accompanied by a draft PEIS analyzing the OCS areas that were identified for leasing at the DPP stage. The comment period for the 2017-2022 draft PEIS closed on May 2, 2016.59
- Step 4. Proposed Final Program/Final PEIS. The final document published by BOEM is the PFP, which is based on additional analysis of the factors in Section 18 of the OCSLA, along with analysis of the public comments received on the PP. The PFP is announced in the Federal Register and submitted to the President and Congress for a period of at least 60 days. Although Congress does not have an approval role for the PFP, the 60-day review period could allow for legislation to be introduced that would influence the outcome of the program. BOEM published the PFP for 2017-2022 on November 18, 2016.60
Along with the PFP, BOEM publishes a final PEIS that concludes the analysis of the areas proposed for leasing. The final PEIS is submitted to the President and Congress along with the PFP. BOEM released the final PEIS for the 2017-2022 program on November 18, 2016.61
- Step 5. Approval of PFP by Secretary of the Interior. At least 60 days after the PFP is submitted to the President and Congress, the Secretary of the Interior may approve the PFP, which then becomes final. The Secretary publishes a record of decision for the final program. Former Secretary of the Interior Sally Jewell issued a record of decision approving the final program for 2017-2022 on January 17, 2017.62
Five-Year Programs Submitted in Earlier Years63
Since 1980, nine distinct five-year programs and a revised version of one program have been submitted to Congress. Following the 60-day review period required by the OCSLA, each of these five-year programs has taken effect as an approved program. This section briefly discusses the previous submissions, dating back to 1980, as shown in Table 1.
|
Years |
Administration Submitting Plan |
Congress |
Number of Sales Listed in Submission |
Number of Sales Held |
Approximate Acres Leased (in millions)a |
|
2017-2022 |
Obama |
114th |
11 |
4 |
3.3b |
|
2012-2017 |
Obama |
112th |
15 |
13 |
7.4 |
|
2007-2012c |
Obama / G. W. Bushc |
111th / 110th |
16 / 21c |
11 |
21.7 |
|
2002-2007 |
G. W. Bush |
107th |
20 |
15 |
20.5 |
|
1997-2002 |
Clinton |
105th |
16 |
12 |
22.9 |
|
1992-1997 |
G. H. W. Bush |
102nd |
18 |
12 |
22.6 |
|
1987-1992 |
Reagan |
100th |
42 |
17 |
24.7 |
|
1982-1987 |
Reagan |
97th |
41 |
23 |
21.0 |
|
1980-1982d |
Carter |
96th |
36 |
12 |
4.1 |
Source: CRS.
a. Acreage leased is shown in BOEM, OCS Lease Sale Statistics, "All Lease Offerings," at http://www.boem.gov/OCS-Lease-Sale-Statistics-All-Lease-Offerings/.
b. The acreage total reflects acres leased for three of the sales (lease sales 249, 250, and 251) but acres bid on for one sale (lease sale 252), because acres leased were not yet available. Not all acres bid on are necessarily leased.
c. The George W. Bush Administration developed the original program for 2007-2012 and submitted it to the 110th Congress with a lease schedule containing 21 sales. Following a court order in 2009, DOI revised the program under the Obama Administration and resubmitted it to the 111th Congress with a revised lease schedule containing 16 sales.
d. This program was originally referred to as the Comprehensive Program 1980-1985, but the covered years were changed to 1980-1982 due mainly to judicial activity. California v. Watt, 688 F.2d 1290 (D.C. Cir. 1981).
The five-year programs have reflected the offshore oil and gas leasing policies of different presidential administrations, along with input from states, Members of Congress, and other stakeholders.
- 2017-2022 Program. The 2017-2022 program was prepared and submitted to Congress by the Obama Administration. The program included 11 lease sales: 10 region-wide sales in the Gulf of Mexico and 1 sale in Alaska's Cook Inlet. As of early August 2019, 4 sales had been held.
- 2012-2017 Program. The 2012-2017 program was prepared and submitted to Congress by the Obama Administration.64 The program reflected the Administration's policies on offshore energy development in the aftermath of the Deepwater Horizon oil spill and subsequent management reforms.65 The submission consisted of 15 lease sales, including 12 sales in the Gulf of Mexico and 3 sales in the Alaska region. Two of the three Alaska sales were later canceled; 13 lease sales were held.66
- 2007-2012 Program.67 The George W. Bush Administration prepared and submitted the 2007-2012 five-year program to Congress. The program went into effect in July 2007 with a schedule of 21 sales. DOI subsequently revised the schedule in accordance with a 2009 court order.68 The Obama Administration resubmitted the program to Congress in 2010, replacing the original lease sale schedule with a schedule consisting of 16 sales.69 Eleven of the 16 sales were held. This five-year program expired in June 2012.
- 2002-2007 Program. The 2002-2007 OCS oil and gas leasing plan was submitted to Congress in 2002 under the George W. Bush Administration.70 The proposal consisted of a schedule of 20 lease sales, 15 of which were held before the program expired in June 2007.
- 1997-2002 Program. The five-year program for the 1997-2002 period was submitted to Congress in 1996 under the Clinton Administration.71 The submission listed 16 sales, 12 of which were held before the program expired in June 2002.
- 1992-1997 Program. The five-year program for the 1992-1997 period was presented to Congress in 1992 under the George H. W. Bush Administration.72 A schedule of 18 sales was submitted. Twelve sales were held before the program expired in June 1997.
- 1987-1992 Program. This five-year program was presented to Congress in 1987 under the Reagan Administration.73 The approved lease sale schedule contained 42 sales, 17 of which were held before the program expired in June 1992.
- 1982-1987 Program. This submission was presented to Congress in 1982 under the Reagan Administration.74 The plan consisted of 41 sales, 23 of which were held before the program expired in June 1987.
- 1980-1982 Program. The original Section 18 submission for domestic oil and gas leasing was envisioned during the passage of the 1978 Amendments to the OCSLA and was prepared starting in October 1978.75 The program was presented to Congress in April 1980, consistent with President Carter's "Energy Message" of April 5, 1979.76 The proposal took effect as an approved plan in June 1980. Under this plan, DOI proposed 36 sales, 12 of which were held.
- Lease Sales Held Prior to 1980. The domestic program for oil and gas leasing prior to 1980 encompassed almost 30 years of federal government lease sales conveying more than 3,000 tracts from October 1954 through September 1980.
Five-Year Program for 2017-2022
The final version of BOEM's offshore oil and gas leasing program for 2017-2022 was approved in January 2017.77 It scheduled 11 lease sales in particular regions and planning areas of the OCS. BOEM identifies four OCS regions—the Gulf of Mexico region, the Alaska region, the Atlantic region, and the Pacific region—comprising a total of 26 planning areas (see Figure 2 and Figure 3). The 2017-2022 final program schedules lease sales in two of these regions (Gulf of Mexico and Alaska). The sections below discuss BOEM's decisions for each region—and the market conditions, resource estimates, and other factors affecting the proposals—in greater detail.
Market Conditions Affecting the 2017-2022 Program78
During development of the 2017-2022 program, U.S. offshore crude oil production was declining in absolute terms and as a percentage of total U.S. production. Offshore production volumes declined by about 12% between 2010 and 2015, whereas U.S. total crude oil production increased by about 73% over 2010 levels.79 Offshore natural gas production also fell—by nearly 50%—between 2010 and 2015,80 while during the same period, U.S. total annual natural gas production rose by more than 30%.81 The surge in total U.S. crude oil and natural gas production was the result of increased production of shale gas and shale oil in several unconventional onshore formations throughout the United States (e.g., Marcellus, Bakken, Permian Basin, and Eagle Ford). The onshore shale oil plays have lower production costs than the deepwater plays being explored and developed offshore. A low oil and natural gas price environment during the period of the program's development also contributed to softer demand for the acquisition of new offshore leases. Numbers of active and producing offshore leases declined between 2010 and 2015, and the Energy Information Administration (EIA) anticipated lower domestic investment in oil and gas projects over the 2015-2020 period.82
Nonetheless, offshore oil and gas production was projected to continue to make a significant contribution to the U.S. energy supply picture. Despite the trend of production decline offshore in the early part of the decade, the EIA anticipated that offshore crude oil production in the Gulf of Mexico would recover to record levels in 2017, because of a number of deepwater oil projects expected to come online based on earlier discoveries.83 BOEM stated in the 2017-2022 PP that "energy diversification, including continued oil and natural gas production in the GOM [Gulf of Mexico], the primary OCS region currently available for energy production and development activities, remains vital ... and new production from other OCS regions can also contribute to meeting the country's energy needs."84
Offshore Resource Estimates for the 2017-2022 Program85
Oil and gas exploration and production proceed in stages, during which added data provide growing certainty about the volume of resources present. Prior to discovery by drilling wells, estimated volumes of oil and gas are termed undiscovered resources. When oil or gas is discovered, the volumes are measured within pools or fields via well penetration or other technology, and are called reserves. Well owners report measured reserves to the Securities and Exchange Commission.86 Reserves have been reported for U.S. OCS areas that have been developed, such as the Central and Western Gulf of Mexico and some parts of the California coast, but no reserves of oil or gas have been reported along the Atlantic OCS, because there have been no discoveries. Only modest oil reserves have been reported on the Alaska OCS. Altogether, BOEM estimates that the U.S. OCS has 4.1 billion barrels of proven oil reserves and 6.7 trillion cubic feet (Tcf) of dry gas, nearly all of which are located in the Central and Western Gulf of Mexico.87
According to BOEM, the U.S. OCS contains estimated undiscovered technically recoverable resources (UTRR) of 89.9 billion barrels of oil (Bbo) and 327.5 Tcf of natural gas (see Table 2).88 The Gulf of Mexico contains about 54% of the UTRR for oil and an estimated 43% of the natural gas, with the vast majority of the resources in the Central Gulf of Mexico. About 90% of Alaska's UTRR estimates for oil and 80% for natural gas are contained in the Chukchi and Beaufort Seas. In preparing its five-year programs under the OCSLA, BOEM must consider the resource potential of individual OCS regions and planning areas along with other factors, such as potential environmental and socioeconomic impacts of oil and gas leasing.
Table 2. Oil and Gas Resource Estimates for the U.S. OCS, 2016
(undiscovered technically recoverable resources)
|
OCS Region |
Oil (Bbo) |
Natural Gas (Tcf) |
|
Alaska |
26.61 |
131.45 |
|
Atlantic |
4.59 |
38.17 |
|
Gulf of Mexico |
48.46 |
141.76 |
|
Pacific |
10.20 |
16.10 |
|
Total |
89.87 |
327.49 |
Source: BOEM, "Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation's Outer Continental Shelf, 2016," Fact Sheet, at http://www.boem.gov/National-Assessment-2016/. For a discussion of undiscovered technically recoverable resources, see footnote 88.
Notes: OCS = outer continental shelf; Bbo = billion barrels of oil; Tcf = trillion cubic feet. BOEM has not updated its estimates since 2016.
Moratoria and Withdrawals Affecting the 2017-2022 Program89
Some portions of the U.S. OCS were not available for leasing consideration in the 2017-2022 five-year program because U.S. presidents had withdrawn them from consideration,90 Congress had placed a moratorium on leasing in the areas, or the areas had a protected status that does not allow for oil and gas leasing. These unavailable areas, which BOEM did not consider for the 2017-2022 program, included the following.
- Areas in the Eastern and Central Gulf of Mexico. The Gulf of Mexico Energy Security Act of 2006 (GOMESA) placed a moratorium on oil and gas leasing in almost all of the Gulf's Eastern planning area and a small portion of its Central planning area through 2022.91
- Alaska Withdrawal Areas. President Obama withdrew from disposition for leasing certain ocean areas in the Alaska region. Alaska withdrawals that affected the 2017-2022 program included those for the North Aleutian Basin planning area, the Hanna Shoal portion of the Chukchi Sea planning area, and the Barrow and Kaktovik whaling areas in the Beaufort Sea.92 In December 2016, after BOEM's publication of the final program, President Obama made additional Arctic withdrawals under the OCSLA,93 but these did not directly affect the 2017-2022 program, because none of the withdrawn areas overlapped with areas that BOEM had scheduled for leasing in the final program.94
- National Marine Sanctuaries and Marine Monuments. National marine sanctuaries designated by the Secretary of Commerce, as well as national marine monuments established by U.S. presidents, are withdrawn from future oil and gas leasing activities.95 Such protected areas have been designated in parts of the Atlantic Ocean, the Pacific Ocean, and the Gulf of Mexico.
Proposed Leasing Schedule by Region
On the basis of its regional analyses, BOEM included in the final program a total of 11 lease sales, all of which take place in either the Gulf of Mexico region or the Alaska region (Figure 2, Figure 3, and Table 3). No lease sales were scheduled for the other two regions of the OCS, the Atlantic region and the Pacific region. An Atlantic lease sale and two Alaska lease sales proposed in earlier versions of the program were not ultimately included. BOEM stated that, altogether, the program makes available for leasing almost half of the undiscovered technically recoverable oil and gas resources on the U.S. OCS.96
|
Figure 2. BOEM's OCS Regions and Planning Areas, Lower 48 States |
 |
 |
|
Source: Both figures are from BOEM, 2017-2022 Outer Continental Shelf Oil and Gas Leasing: Proposed Program, March 2016, p. 1-2, at http://www.boem.gov/2017-2022-Proposed-Program-Decision/. |
|
Year |
Program Area |
Sale Numbera |
|
|
1. |
2017 |
Gulf of Mexico |
249 |
|
2. |
2018 |
Gulf of Mexico |
250 |
|
3. |
2018 |
Gulf of Mexico |
251 |
|
4. |
2019 |
Gulf of Mexico |
252 |
|
5. |
2019 |
Gulf of Mexico |
253 |
|
6. |
2020 |
Gulf of Mexico |
254 |
|
7. |
2020 |
Gulf of Mexico |
256 |
|
8. |
2021 |
Gulf of Mexico |
257 |
|
9. |
2021 |
Alaska - Cook Inlet |
258 |
|
10. |
2021 |
Gulf of Mexico |
259 |
|
11. |
2022 |
Gulf of Mexico |
261 |
Gulf of Mexico Region: Ten Lease Sales
The Gulf of Mexico is the most mature BOEM region, with "the most abundant proven and estimated oil and gas resources, broad industry interest, and well-developed infrastructure."97 The region accounts for about 97% of all U.S. offshore and gas production.98 Also, the Central and Western Gulf states (Louisiana, Texas, Mississippi, and Alabama) are supportive of offshore oil and gas activities. For all these reasons, the majority of the lease sales in the 2017-2022 program, as in previous programs, were scheduled in the Gulf region (10 of 11 proposed sales).99
The region includes three BOEM planning areas: the Western Gulf, the Central Gulf, and the Eastern Gulf (see Figure 4). Almost all of the Eastern Gulf and a small portion of the Central Gulf are closed to oil and gas leasing by the congressional moratorium imposed under GOMESA (see "Moratoria and Withdrawals Affecting the 2017-2022 Program," above). In earlier five-year programs, BOEM and its predecessor agencies scheduled separate sales in each of the three Gulf planning areas. For the 2017-2022 program, BOEM replaced these area-specific sales with region-wide sales that offer all available lease blocks in the Gulf in each sale. BOEM stated that the change was intended "to provide greater flexibility to industry, including more frequent opportunities to bid on rejected, relinquished, or expired OCS lease blocks, as well as facilitating better planning to explore resources that may straddle the U.S.-Mexico boundary."100
|
Figure 4. BOEM's Final Program Area for Offshore Oil and Gas Leasing in the Gulf of Mexico |
 |
|
Source: BOEM, 2017-2022 PP, "Maps," at http://www.boem.gov/Gulf-of-Mexico-Region-Program-Area/. |
The final program scheduled fewer lease sales in the Gulf—and fewer lease sales generally—than were contained in previous five-year programs (see Table 1). For example, the five-year program for 2012-2017 included 12 sales in the Gulf, and the revised program for 2007-2012 also contained 12 Gulf sales. Some Members of Congress expressed concerns about the lower number of lease sales during congressional hearings on the 2017-2022 program.101 BOEM attributed the decrease to the consolidation of area-specific sales in the Gulf. With all available Gulf blocks offered at each sale, BOEM stated, each individual planning area is made available more times, even though the overall number of lease sales has decreased.102
Alaska Region: One Lease Sale
Interest in exploring for offshore oil and gas in the Alaska region of the U.S. OCS has grown as the region sees decreases in the areal extent of summer polar ice, allowing for a longer drilling season. Recent estimates of substantial undiscovered oil and gas resources in Arctic waters have also contributed to the increased interest.103 However, the region's severe weather and perennial sea ice, and its lack of infrastructure to extract and transport offshore oil and gas, continue to pose challenges to new exploration. Among 15 BOEM planning areas in the region, the Beaufort and Chukchi Seas are the only two areas with existing federal leases, and only the Beaufort Sea has any producing wells in federal waters (from a joint federal-state unit). Stakeholders including the state of Alaska, as well as some Members of Congress, seek to expand offshore oil and gas activities in the region. Other Members of Congress as well as some environmental groups oppose offshore oil and gas drilling in the Arctic, due to concerns about potential oil spills and about the possible contributions of these activities to climate change.
The Obama Administration at times expressed support for expanding offshore oil and gas exploration in the Arctic, while also pursuing safety regulations that aim to minimize the potential for oil spills.104 In the five-year program for the period 2012-2017, BOEM included lease sales in three planning areas of the Alaska region: the Beaufort Sea, the Chukchi Sea, and Cook Inlet. However, in October 2015 BOEM canceled its scheduled Chukchi and Beaufort Sea lease sales for 2016 and 2017, citing difficult market conditions and low industry interest.105
BOEM's earlier program drafts for 2017-2022 also included three Alaska lease sales—again, one each in the Beaufort Sea, Chukchi Sea, and Cook Inlet planning areas. However, for the final program, BOEM removed the sales for the Beaufort and Chukchi Seas, and retained only the sale for Cook Inlet (see Figure 5). BOEM stated that it weighed factors that favored sales in the Beaufort and Chukchi planning areas, including the significant hydrocarbon resources in those waters and the support of the state of Alaska for the sales. Nonetheless, BOEM ultimately decided against the sales based on other factors, including "opportunities for exploration and development on [already] existing leases, the unique nature of the Arctic ecosystem, recent demonstration of constrained industry interest in undertaking the financial risks that Arctic exploration and development present, current market conditions, and sufficient existing domestic energy sources already online or newly accessible."106
BOEM noted evidence of a declining industry interest in the Arctic OCS, in the face of low oil prices and Shell Oil Company's disappointing exploratory drilling effort in the Chukchi Sea in 2015.107 The agency stated that the number of active leases on the Arctic OCS declined by more than 90% between February 2016 and November 2016, as companies relinquished leases they had acquired in previous years rather than incurring the costs of continued investment.108 Additionally, BOEM concluded that, because of the current overall strength of the domestic energy supply, the two Arctic lease sales were not immediately needed to satisfy U.S. energy needs.109
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Figure 5. BOEM's Final Program Area for Offshore Oil and Gas Leasing in Alaska |
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Source: BOEM, 2017-2022 PP, "Maps," at http://www.boem.gov/Alaska-Program-Areas/. |
Subsequent to BOEM's publication of the final program, President Obama withdrew large portions of the Arctic OCS from future leasing consideration for an indefinite time period.110 The withdrawn areas did not overlap with BOEM's scheduled Alaska lease sale.
Atlantic Region: No Lease Sales
The final program for 2017-2022 excluded a lease sale in the Atlantic region that had been proposed in the DPP version of the program. If conducted, it would have been the first offshore oil and gas lease sale in the Atlantic since 1983. The lack of oil and gas activity in the Atlantic region in the past 30 years was due in part to congressional bans on Atlantic leasing imposed in annual Interior appropriations acts from FY1983 to FY2008, along with presidential moratoria on offshore leasing in the region during those years. Starting with FY2009, Congress no longer included an Atlantic leasing moratorium in annual appropriations acts. In 2008, President George W. Bush also removed the long-standing administrative withdrawal for the region.111 These changes meant that lease sales could now potentially be conducted for the Atlantic. However, no Atlantic lease sale has taken place in the intervening years.112
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Figure 6. BOEM's Originally Proposed Program Area for Offshore Oil and Gas Leasing in the Atlantic (subsequently removed from the five-year program) |
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Source: 2017-2022 PP, p. 4-12. |
For both the DPP and PP versions of the 2017-2022 program, BOEM analyzed of a variety of factors for the Atlantic region under Section 18 of the OCSLA. These factors included the region's resource potential and infrastructure needs, ecological and safety concerns, competing uses of the areas—especially by the Department of Defense and the National Aeronautics and Space Administration (NASA)—and state and local attitudes toward drilling, among others. The initial analysis for the DPP resulted in a planned lease sale in a combined portion of the Mid- and South Atlantic planning areas in 2021 (see Figure 6). However, after the comment period and further analysis, BOEM removed the Atlantic sale in the PP. BOEM gave several reasons for the removal, including "strong local opposition, conflicts with other ocean uses, ... current market dynamics, ... [and] careful consideration of the comments received from Governors of affected states."113 In particular, BOEM cited conflicts with existing uses, including ocean-dependent tourism, commercial and recreational fishing, commercial shipping and transportation, and Department of Defense and NASA uses.114
BOEM further cited the broader U.S. energy situation as a factor in its decision not to hold an Atlantic lease sale in the 2017-2022 period. The agency observed that the increases over the past decade in onshore oil and gas production have made national energy needs less pressing. BOEM stated that "domestic oil and gas production will remain strong without the additional production from a potential lease sale in the Atlantic."115
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Environmental Analysis for the 2017-2022 Program Programmatic Environmental Impact Statement (PEIS). Along with BOEM's preparation of the five-year oil and gas leasing program for 2017-2022, the agency prepared a PEIS for the program, as required under the National Environmental Policy Act (NEPA; 42 U.S.C. §§4321-4347). This document evaluates the potential environmental and socioeconomic impacts associated with the program and considers alternatives that may avoid or reduce impacts. BOEM released its final PEIS for the 2017-2022 program on November 18, 2016. Although the PEIS process is separate from that of the five-year program, it informs the implementation of the leasing program. For example, when implementing the program, BOEM may apply exclusions or mitigation measures identified in the PEIS to avoid or reduce program impacts. In addition to the environmental analysis contained in the PEIS, which is associated with publication of the five-year program, later steps in the offshore leasing and production process also require environmental evaluation under NEPA. For example, NEPA reviews are required at the pre-lease sale, exploration, and development and production stages. See Figure 1 for more information. Mitigation Strategy. The final program also responded to President Obama's November 2015 memorandum on environmental mitigation strategies (Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment, November 3, 2015). Under this memorandum and other DOI policy guidance, BOEM was required to apply a landscape-scale approach to mitigating environmental damage from agency actions. The approach was to follow a "mitigation hierarchy," starting with avoidance of impacts as the first preference, followed by minimization of impacts that are unavoidable, and then compensation to protect resources impacted by activities. BOEM stated that the process prescribed by the OCSLA for developing the five-year program largely met the criteria of President Obama's memorandum and related DOI policy guidance. The OCSLA requires a "landscape-level" approach to determine the areas most suitable for ocean energy development. In terms of the preferred strategies of avoidance and minimization, BOEM "eliminated numerous planning areas from potential leasing and minimized effects to certain areas through the Secretary's size, timing, and location decisions" (2017-2022 PFP, p. 1-14). Following program approval, BOEM stated, the agency would "integrate the mitigation hierarchy into the entire leasing process" to avoid, minimize, or compensate for impacts of the program (p. 1-14). However, an April 2017 executive order from President Trump on "Promoting Energy Independence and Economic Growth" subsequently repealed the Obama Administration mitigation policy. Sources: 2017-2022 PFP; 2017-2022 Final PEIS; CRS Report RL33152, The National Environmental Policy Act (NEPA): Background and Implementation, by Linda Luther; Presidential Memorandum, Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment, November 3, 2015, at https://www.whitehouse.gov/the-press-office/2015/11/03/mitigating-impacts-natural-resources-development-and-encouraging-related; Executive Order 13868, Promoting Energy Independence and Economic Growth, March 28, 2017, at https://www.whitehouse.gov/presidential-actions/presidential-executive-order-promoting-energy-independence-economic-growth/. |
Pacific Region: No Lease Sales
Like other recent five-year programs, the 2017-2022 program scheduled no lease sales for the Pacific region. No federal oil and gas lease sales have been held for the region since 1984, although some active leases with production remain in the Southern California planning area. Like the Atlantic region, the Pacific region was subject to congressional and presidential leasing moratoria for most of the past 30 years.116 Although these restrictions were lifted in FY2009, the governors of California, Oregon, and Washington continue to oppose offshore oil and gas leasing in the region.117
Role of Congress
Congress can influence the Administration's development of a five-year program in a number of ways. Members of Congress may convey their views on the Administration's proposal by submitting public comments on a draft program during the formal comment periods, or they may evaluate the program in committee oversight hearings. More directly, Members may introduce legislation to set or alter a program's terms. Congress pursued all these types of influence with respect to the proposed program for 2017-2022. Congress also has a role under the OCSLA of reviewing each five-year program once it is finalized, but the OCSLA does not require that Congress directly approve the final program in order for it to be implemented.
Public Comment
Members of Congress, along with other stakeholders such as state governors, interested agencies and organizations, and members of the public, may submit comments on draft versions of five-year programs. For the 2017-2022 program, BOEM received 15 comments from Members of Congress on its initial request for information (RFI), 12 comments from Members on the DPP, and 5 comments from Members on the PP. Some of these comments came from one or a few Members, and others had many signers (in some cases, 150 Members or more).118 Some comments opposed the inclusion of certain regions in the program, whereas others supported the proposed lease sales or sought an expansion of lease areas and a higher number of sales. The comments also addressed related issues such as seismic testing in the Atlantic.
BOEM takes the public comments into account when developing successive drafts of a five-year program. Each draft contains an appendix summarizing the substantive comments that BOEM received on the previous version, including those from Members of Congress, and explaining BOEM's response to each.119 BOEM may revise the program to partially or fully adopt a suggestion, or may explain why it declined to do so.
Oversight Hearings
The House or Senate may hold oversight hearings to evaluate a proposed five-year oil and gas leasing program. Such hearings help to inform Members in their legislative decisionmaking concerning the program and provide an opportunity for BOEM to hear Members' views. After BOEM released the DPP for 2017-2022, the House Natural Resources Committee held a hearing on the program on April 15, 2015.120 Members and witnesses addressed issues such as the overall number of lease sales proposed for the program, whether leasing should occur in the Atlantic and Arctic, and whether seismic surveying should occur in the Atlantic, among others. On May 19, 2016, the Senate Energy and Natural Resources Committee held a hearing on the PP version of the program.121 Members and witnesses discussed, among other issues, the PP's proposal for targeted rather than area-wide lease sales in Alaska and the factors that contributed to BOEM's decision to remove its earlier-proposed Atlantic lease sale from the 2017-2022 program.
Legislation
Under the OCSLA, the final version of each five-year program must be submitted to Congress for a period of 60 days before the Secretary of the Interior can approve and implement the program.122 However, Congress does not directly approve or disapprove the program during this period. Instead, either during or outside the 60-day period, Congress could introduce legislation to alter the program. Legislation could, for example, remove a scheduled lease sale, add a new lease sale, or make broader changes to the program.
The 114th, 115th, and 116th Congresses all have considered legislation to alter implementation of the 2017-2022 program. Proposals have included bills to add specific lease sales to the program or require a different set of lease sales, to require certain minimum numbers of acres to be leased, to prohibit leasing in certain OCS areas, to defund the planning program, and to prohibit any revisions to the program, among other topics. Such bills have not been enacted to date. Additional legislation could potentially be considered as implementation of the program continues.