Rethinking the OCS debate

Leading figures from the offshore oil and gas industry are seeking a new level of engagement with lawmakers and their constituents to open banned areas of the US Outer Continental Shelf (OCS) to drilling.

John Waggoner
Drilling Technology Editor

HOUSTON -- Leading figures from the offshore oil and gas industry are seeking a new level of engagement with lawmakers and their constituents to open banned areas of the US Outer Continental Shelf (OCS) to drilling.

The three-decade moratorium that was sparked in part by a disastrous oil spill in Santa Barbara, California in 1969, ended last year. As the drilling debate stirs to life again, industry leaders hope that new technologies and broader awareness about environmentally safe operations will change the discussion from an either-or proposition to one accepting of both hydrocarbons and renewable energies.

"There is no silver bullet, but there is silver buckshot," says Karen Alderman Harbert, president and CEO of the US Chamber of Commerce's Institute for 21st Century Energy, who spoke in a panel at the Offshore Technology Conference in Houston, Texas.

She and other panelists said that the time is ripe to renew efforts to win Congress over to opening areas of the OCS to offshore exploration.

Gary Luquette, president of Chevron North America says new engagement with groups opposed to OCS drilling is vital for the US energy supply and economic growth. Part of the blame for the longevity of the ban is the industry itself, he says.

"The industry has done a poor job of getting the message out about how the industry is important to the economy," he says. "We should take credit and great pride in the advancements over the past 40 years."

Luquette adds: "The either-or hypothesis for 'green' energy and oil is false. In 30 or 40 years oil and gas will still play a very important role [in the US energy matrix]."

New technologies have advanced to the point that today's oil and gas industry would be virtually unrecognizable from the time the OCS ban was imposed. From the internet and global positioning systems (GPS) to advanced drilling technologies that have proven safe even though the harrows of major hurricanes, the rationale for the ban has appeared to weaken faster than public acceptance of oil and gas operations has grown.

"New cutting edge technologies…can produce safely and with minimal environmental impact," says Tim Cejka, president of ExxonMobil.

Cejka says that outdated 2D seismic data used by the government to reckon its recoverable reserves from the OCS provide little certainty on the exact amount of hydrocarbons sitting there. With new technologies the industry is now able to find and lift hydrocarbons that forty years ago would be considered unthinkable. However, it is not until the private sector is allowed to conduct operations in the OCS that the true extent of US hydrocarbon resources will be known, he says.

The panelists agreed that as long as the OCS debate positions renewable energy against oil and gas, policy will become mired in futile polarization and ultimately inaction.

"I am not suggesting that biofuels are unimportant," says Larry Nichols, chairman and CEO of Devon Energy Corp.

He points out that known renewable resources are dwarfed by the availability of hydrocarbons by even the most optimistic projections. The danger, he says, is in further delay toward pursuing all options for viable energy.

05/06/2009

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