Zinke Announces Largest Oil and Gas Lease Sale in US History

U.S. Secretary of the Interior Ryan Zinke announced that the Department is proposing the largest oil and gas lease sale ever held in the United States –76,967,935 acres in federal waters of the Gulf of Mexico, offshore Texas, Louisiana, Mississippi, Alabama and Florida. The proposed region-wide lease sale, offering an area about the size of New Mexico, is scheduled for March 2018 and includes all available unleased areas on the Gulf’s Outer Continental Shelf, surpassing last year’s region-wide lease sale by about one million acres.

“In today’s low-price energy environment, providing the offshore industry access to the maximum amount of opportunities possible is part of our strategy to spur local and regional economic dynamism and job creation and a pillar of President Trump’s plan to make the United States energy dominant,” Secretary Zinke said. “And the economic terms proposed for this sale include a range of incentives to encourage diligent development and ensure a fair return to taxpayers.”

Proposed Lease Sale 250, which will be livestreamed from New Orleans, will be the second offshore sale under the National Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022. Lease Sale 249, held in New Orleans last August, received $121 million in high bids. In addition to the high bids and rental payments, the Department will receive royalty payments on any future production from these leases. Outer Continental Shelf (OCS) lease revenues are directed to the U.S. Treasury, Gulf Coast states, the Land and Water Conservation Fund and Historic Preservation Fund.

“In order to strengthen America’s energy dominance, we must anticipate and plan for our needs for decades to come,” said Senator Lisa Murkowski, Chairman of the Senate Committee on Energy & Natural Resources. “The administration’s decision to move forward with the largest offshore lease sale in our nation’s history is a key part of that effort. Whether in Alaska or the Gulf of Mexico, we should all support responsible development because it creates high-paying jobs, strengthens national security, and keeps energy affordable for our families and businesses.” 

“President Trump’s team is following through on their commitment to advancing America’s energy independence,” said Senator Roger Wicker. “Unlike the previous administration, this one understands that expanded offshore energy development benefits working families, consumers, and our national security. This is a win for Mississippi and the entire country.” 

“President Trump and his administration are following through on their promise to end the war on American energy,” said Senator Bill Cassidy. “Investing in energy creates better jobs with better benefits for working families, strengthens our national security and strengthens our energy independence.” 

“This is great news that our oil and gas industry in Louisiana sorely needs. This is the largest sale in U.S. history, and it will create jobs and bolster our state and national economy,” said Senator John Kennedy. “Our Louisiana workers are ready to go back to work.” 

“President Donald Trump made clear his desire to ensure Americans can use our own natural resources to produce the energy vital to our economy and national security,” said Alabama Governor Kay Ivey. “As he has done time and again, President Trump has proven to the people of Alabama that he is a man of his word, and we are grateful to him and to Secretary Ryan Zinke for their determination to open a vast tract of American waters to oil and gas exploration. This decision is not only in the best interest of all Americans, it allows Gulf Coast states, like Alabama, to utilize our natural resources not only to provide energy for our nation, but increased economic opportunities for our people.”

“Mississippi welcomes Secretary Zinke’s action to carry out the president’s vision for American energy dominance,” said Mississippi Governor Phil Bryant. “This will strengthen our state’s status as a leader in oil and gas exploration and create good jobs for hardworking Mississippians.”

“If we’re serious about energy dominance and long-term energy affordability, we must create certainty about future access in the Outer Continental Shelf,” said Congressman Rob Bishop, Chairman of the House Committee on Natural Resources.“Secretary Zinke should be commended for his leadership to create that certainty and realign Interior as a partner for industry to advance responsible energy development. This is a welcomed announcement on that front. Congressionally, we will continue to move forward on a comprehensive overhaul of onshore and offshore federal lands energy policy to help Interior expand even greater access, streamline permitting and increase revenues to both states and the U.S. Treasury.” 

“Secretary Zinke’s announcement is welcome news and I look forward to continuing to work with the administration to put consumer’s interests first while promoting job creation and modernizing our nation’s energy infrastructure,” said Congressman Greg Walden, Chairman of the House Committee on Energy & Commerce. “The president and his administration have placed energy independence and security at the top of their agenda, and this committee has been leading the way in examining policies that seek to streamline siting and permitting of the nation’s oil and gas pipelines.”

“President Trump has stated that he wants our country to exert ‘energy dominance’ throughout the world, and this lease sale is another bold step in that direction,” said House Majority Whip Steve Scalise. “I applaud today’s announcement by Secretary Ryan Zinke to offer the largest offshore oil and gas lease sale in U.S. history. My constituents in Southeast Louisiana will be leading the way in this exploration and development that will create good jobs and kickstart more economic growth. This bold action helps us continue fighting for the responsible development of our natural resources that bring critical dollars to restore our coast.” 

“As a long-time advocate for opening up more of the Gulf of Mexico, it’s refreshing to work with an Administration that understands it’s true energy potential,” said Congressman Pete Olson. “Oil production, when done safely and responsibly, is a win for Texas and the Gulf Coast economy, and adds to America’s energy security. I applaud Secretary Zinke for moving forward with this lease sale and hope these opportunities to tap into our energy potential continue.”

“Secretary Zinke’s announcement of the largest oil and gas lease sale in our country’s history is welcome news. The oil and gas industry provides thousands of direct and indirect jobs to the people of Mississippi,” said Congressman Gregg Harper. “This lease sale has the potential to create new opportunities for our state and nation as advances in technology continue to make the United States a world leader in natural resource production.”

“I applaud Secretary Zinke and the Department of Interior for their efforts to spur energy production and support communities along the Gulf Coast. Revenue from these leases will be a huge boost for Gulf states, like Alabama, and will help us continue conservation and preservation of our treasured coastal areas,” said Congressman Bradley Byrne. “Through developments like this, we can ensure American energy dominance and make life better for Gulf Coast families.” 

The estimated amount of resources projected to be developed as a result of the proposed region-wide lease sale ranges from 0.21 to 1.12 billion barrels of oil and from 0.55 to 4.42 trillion cubic feet of gas. Most of the activity (up to 83% of future production) from the proposed lease sale is expected to occur in the Central Planning Area.

Proposed Lease Sale 250 includes 14,375 unleased blocks, located from 3 to 230 miles offshore, in the Gulf’s Western, Central and Eastern planning areas in water depths ranging from 9 to more than 11,115 feet (three to 3,400 meters). Excluded from the lease sale are blocks subject to the Congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks that are adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the current boundary of the Flower Garden Banks National Marine Sanctuary.

“American energy production can be competitive while remaining safe and environmentally sound,” said Vincent DeVito, Counselor for Energy Policy at Interior. “People need jobs, the Gulf Coast states need revenue, and Americans do not want to be dependent on foreign oil. We have heard their message loud and clear.”

The lease sale terms include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region. The terms and conditions for Lease Sale 250 in the Proposed Notice of Sale are not final. Different terms and conditions may be employed in the Final Notice of Sale, which will be published at least 30 days before the sale.

The Bureau of Ocean Energy Management (BOEM) estimates that the OCS contains about 90 billion barrels of undiscovered technically recoverable oil and 327 trillion cubic feet of undiscovered technically recoverable gas. The Gulf of Mexico OCS, covering about 160 million acres, has technically recoverable resources of over 48 billion barrels of oil and 141 trillion cubic feet of gas.

All terms and conditions for Gulf of Mexico Region-wide Sale 250 are detailed in the Proposed Notice of Sale (PNOS) information package, which is available at: http://www.boem.gov/Sale-250/. Copies of the PNOS maps can be requested from BOEM’s Gulf of Mexico Region’s Public Information Unit at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).

The Notice of Availability of the PNOS will be available for inspection in the Federal Register on Thursday, October 26, at: https://www.archives.gov/federal-register/public-inspection.

Trump Slaps Motorists with Ethanol Costs

Alaskans Want More Drilling. Trump and Congress Are Working to Make It Happen.

The Trump administration is attempting to do what past administrations have either failed to do or blocked: open up part of the Arctic National Wildlife Refuge for oil and gas drilling.

The House recently passed a budget proposal that opens the door to allowing drilling in the refuge. The bill now stands in the Senate and could be well received at the White House, which included royalties from drilling in the refuge in its budget proposal.

Last month, The New York Times obtained an internal memo from the Interior Department, which proposed the lifting of restrictions on exploratory seismic studies in the Arctic National Wildlife Refuge. The agency was directed to provide an environmental assessment and a rule allowing for new exploration plans.

The federal government established the wildlife refuge in 1960. It first consisted of 8.9 million acres, but today accounts for 19.3 million acres.

Some 10.4 billion barrels of oil are believed to be in the 1.5 million acres known as the “1002 area,” but the last time the U.S. Geological Survey studied the area was in 1998. Drilling would likely only occur in some 2,000 acres, representing just 0.01 percent of the total land mass of the refuge.

It is noteworthy that those in Alaska who would be directly impacted by the drilling recognize its value.

Mayor Harry Brower Jr., who represents a borough in the wildlife refuge, said, “North Slope Borough residents recognize the importance of oil and gas to our local economy and the ability of our borough and city governments to provide public services.”

The native Iñupiat people who live within the refuge also welcome the drilling. Matthew Rexford, president of the Kaktovik Iñupiat Corp., a village corporation established following the Alaska Native Claims Act of 1971, wrote:

As Iñupiat, we stand to be inarguably the most affected by oil and gas activity in the Arctic. Therefore, we have the greatest stake in seeing that any and all development is done in a manner that keeps our land and subsistence resources safe. We know it can be done, because it’s already being done. Now is the time to open [Arctic National Wildlife Refuge] to drilling.

The Voice of the Arctic Iñupiat, a 21-member nonprofit corporation, unanimously voted to pass a resolution backing “safe and reasonable development” in the wildlife refuge.

Moreover, the results of a 2017 survey of Kaktovik, a town in the 1002 area, show that 71 percent of those surveyed think oil and gas has the most significant economic impact on their community. Eighty-six percent view the offshore oil and gas industry as favorable.

Nevertheless, opponents of drilling argue that there is no need to open the wildlife refuge because oil prices are low. the problem with this argument is that no one knows what the price of oil will be years, let alone decades, from now, and drilling is a multiyear endeavor.

This objection is likely just a red herring from their real desire to block any natural resource development. To environmentalists, there is never a good time to open up the wildlife refuge to drilling.

Opponents also worry that opening up the reserve will come with enormous environmental risks in a “crown jewel” of wilderness. But in reality, the 1002 area has no trees, deep-water lakes, or maintain peaks at risk.

Further, fracking technology has made oil recovery more efficient, and it would only take place in a small portion of the region.

Environmental policy should be tailored to specific sites and situations, and should be decided by those closest to the people who have the most to gain or lose by those decisions.

In this case, Alaskans should decide, and they should not have to consult hundreds of members of Congress to make these decisions.

But until they have control, the future of the Arctic National Wildlife Reserve rests in the hands of Congress and President Donald Trump.

Commentary by Samantha Block and Katie Tubb. Originally published at The Daily Signal.

Trump administration orders review of landmark sage grouse plan

By Steve Gorman

(Reuters) – The Trump administration has ordered a review of sweeping federal land-use restrictions adopted in 2015 to safeguard the greater sage grouse, a once-ubiquitous prairie bird whose fate is tied to the health of America’s vast but vanishing Western grasslands.

Interior Secretary Ryan Zinke announced the 60-day review of sage grouse conservation rules in a Wednesday conference call with reporters, saying Western governors have complained that federal implementation of the plan has been alternately “heavy-handed” and inconsistent.

Environmental groups immediately protested the move, saying it might lead to unraveling a complex and delicately balanced strategy that took federal agencies years to negotiate with state and local governments, scientists, ranchers and other private interests.

The Obama administration launched the plan in September 2015 as an alternative to listing the ground-dwelling bird under the Endangered Species Act, a move that would potentially have entailed even tougher habitat protections.

Zinke insisted he was seeking to perfect, not dismantle, sage grouse conservation measures, while allowing greater innovation and “flexibility” by individual states on “such things as jobs and energy development.”

He said greater focus might be placed on factors other than strict habitat protection, such as predator, disease and wildfire control. Zinke also said some states have suggested the overall strategy place more emphasis on grouse population numbers than on habitat size.

Two Western governors, Democrat John Hickenlooper of Colorado and Republican Matthew Mead of Wyoming, who co-chair a federal-state sage grouse task force, contradicted such a shift in a letter to Zinke last month.

“We understand that you are considering … moving from a habitat management model to one that sets population objectives for the states. We are concerned that this is not the right decision,” they wrote in the May 26 letter.

The plight of the grouse, a key indicator species for America’s dwindling sagebrush ecosystem, has pitted conservation groups against oil and gas drilling, wind farms and cattle grazing in one of the biggest industry-versus-nature conflicts in decades.

The landmark measures implemented 21 months ago were aimed at saving the grouse while allowing activities such as energy development, mining and ranching to co-exist with the chicken-sized prairie fowl.

The greater sage grouse, known for its elaborate mating rituals, once ranged by the millions across a broad expanse of the western United States and Canada. They are now believed to number between 200,000 and 500,000 birds across 11 Western states and southern Alberta.

Besides a patchwork of conservation programs for state and private lands representing 45 percent of sage grouse habitat, the new strategy includes a set of tiered limits on commercial development inside 67 million acres (27 million hectares) of designated habitat on federal land.

Unlike many Western land-use battles of the past, sage grouse conservation drew wide support from commercial interests. Many ranchers, in particular, found common cause with efforts to protect the rangelands on which their livestock depend, citing the axiom: “What’s good for the bird is good for the herd.”

 

(Reporting by Steve Gorman; Editing by Bill Trott)

 

Congress calls on Sessions to investigate DoJ abuses in WOTUS case

House Agriculture Committee Chairman K. Michael Conaway (TX-11) and House Judiciary Committee Chairman, Bob Goodlatte (VA-6) sent a letter to U.S. Attorney General Jeff Sessions calling for a review of the Department of Justice’s (DOJ) decision to prosecute a California court case alleging violations under the Clean Water Act (CWA) – directly related to both the statutory exemptions for farming and Obama administration’s waters of the U.S. (WOTUS) rule.

The letter requests information about DOJ’s process for prosecuting violations of the CWA, citing specific concerns about the case of Duarte Nursery v. Army Corps of Engineers. In the letter, the chairmen note both committees’ concerns that the court’s opinion is “not consistent with legislative intent behind the farming exemptions under the CWA.” The letter also seeks to clarify whether a legislative fix is required to protect farmers, such California farmer John Duarte, from similar prosecution in the future. 

Mr. Duarte’s case clearly highlights the need to keep the federal government out of America’s backyards, fields and ditches. Little-by-little we watched the previous administration chip away at the rights of land and property-owners, aiming to expand its authority through broad new rules under WOTUS, all while providing little clarity to farmers and ranchers about what qualifies for exemptions. Our letter aims to work with the new administration to better define current interpretations of both WOTUS and farming exemptions so we can begin to set new rules of the road that will protect our farmers and ranchers from onerous fines, penalties and regulations,” said Chairman Conaway.

“The regulatory overreach of the previous administration is having a negative impact on the lives of hardworking Americans. Congress made its intentions of how the Clean Water Act was to be applied for the health and safety of Americans, but the Obama administration has twisted law to serve a political agenda. We will work with President Trump and the new administration to reverse Obama-era regulations that are hurting American farmers, as well as other industries, and private citizens alike,” said Chairman Goodlatte.

Mr. Duarte’s case stems from a February 2013 U.S. Army Corps of Engineers (the Corps) allegation that the vernal pools on Mr. Duarte’s land are considered WOTUS, thus subject to CWA authority. The Corps argued that based on inconsistent agriculture production patterns on Mr. Duarte’s land prior to his purchase in 2012 he did not qualify for farming exemptions and had violated the CWA when he plowed his field in late 2012. Mr. Duarte now faces fines of roughly $2.8 million and additional costly mitigation measures.

Full text of the letter is available below.
_

May 26, 2017

The Honorable Jeff Sessions              
Attorney General of the United States          
Department of Justice
950 Pennsylvania Avenue, NW         
Washington, D.C. 20530

Dear Attorney General Sessions:

As Chairman of the House Committee on Agriculture and Chairman of the House Committee on the Judiciary (“Committees”), we have been following the case of Duarte Nursery v. Army Corps of Engineers very closely. As you may know, the interpretations of the Clean Water Act (CWA) and its farming exemptions are critical to farmers and ranchers across the nation and, thus, are of particular interest to the Agriculture Committee, especially given the Committee’s jurisdiction over agriculture generally. The Judiciary Committee’s oversight responsibilities include ensuring that the Justice Department enforces the law as Congress intended.

The prosecution of Mr. Duarte raises concerns that the Congressional intent behind the farming exemptions in the statute is misunderstood. Specifically, it is the Agriculture Committee’s view that even occasional farm activities, including grazing, qualify as “normal” farming under the statutory exemption, and also are part of an established operation for purposes of the exemption. Further, it is the Committee’s view that the activity at issue in this case constitute plowing for the purposes of the exemption.

To better understand the Department of Justice’s (DOJ) process for prosecuting potential violations of the CWA and in order to determine whether or not legislation is required to correct potential misinterpretations of the law, the Committees request the following information:

  • What does the DOJ consider in determining whether or not to prosecute a violation of the CWA?
  • Is it appropriate to seek reduced penalties where the alleged violation is based on a novel or strained interpretation of the underlying statutory authority?
  • Have there been any cases where DOJ has entered into contingent settlements pending an appeal of a CWA case? If so, please describe the circumstances of those cases.
  • Has DOJ ever declined on appeal to advance CWA arguments that were successful at the district court level? If so, please describe the circumstances of those cases.

If you have any questions about this request, please contact Agriculture Committee staff at (202) 225-2171 and the Judiciary Committee at (202) 225-3951.

Sincerely,

K. Michael Conaway                                                             
Chairman        
House Committee on Agriculture      

Bob Goodlatte           
Chairman
House Committee on the Judiciary                 

cc:        The Honorable Scott Pruitt, Administrator, U.S. Environmental Protection Agency

Virginia governor orders cap and trade regulation for power plants

By Valerie Volcovici

WASHINGTON (Reuters) – Virginia’s governor issued an order on Tuesday to lay the groundwork for a cap-and-trade system to cut greenhouse gas emissions from power plants, saying it would “fill the void” left by the Trump administration which has been rolling back federal climate rules.

Democratic Governor Terry McAuliffe signed Executive Directive 11 instructing Virginia’s environmental regulators to craft rules targeting power sector carbon emissions by Dec. 31.

McAuliffe specifically asked regulators to propose a rule for the state air pollution control board that would enable Virginia to participate in a multi-state carbon permit trading program such as the Regional Greenhouse Gas Initiative for northeastern states.

“As the federal government abdicates its role on this important issue, it is critical for states to fill the void. Beginning today, Virginia will lead the way to cut carbon…,” McAuliffe said in a statement.

The main federal environmental regulator, the Environmental Protection Agency, has been actively rolling back Obama administration rules aimed at combating climate change, including the Clean Power Plan that aimed to slash carbon emissions from power plants by 32 percent below 2005 levels by 2030.

McAuliffe said Virginia was especially sensitive to the impact of climate change and dealt with the frequent threat of storm surges and flooding.

Environmental groups praised the governor’s order, which they said was an antidote to the Trump administration’s efforts to roll back Obama-era environmental laws.

“In the face of dangerous rollbacks of clean air protections from the Trump Administration, Governor McAuliffe’s directive is one more example of state leaders moving forward,” said Gene Karpinski, president of the League of Conservation Voters.

Republicans in Virginia called McAuliffe’s move a costly policy that would raise electricity prices for Virginians.

“Governor McAuliffe’s executive order is the worst kind of virtue signaling,” said John Whitbeck, chairman of Virginia’s Republican party.

(Reporting by Valerie Volcovici; Editing by Dan Grebler and Andrew Hay)

EPA seeking input on WOTUS rewrite

The U.S. Environmental Protection Agency and the U.S. Army sent a letter to governors Tueday soliciting input from states on a new definition of protected waters that is in-line with a Supreme Court Justice Antonin Scalia’s opinion in the 2006 Rapanos v. United States case. Scalia’s definition explains that federal oversight should extend to “relatively permanent” waters and wetlands with a “continuous surface connection” to large rivers and streams.

“EPA is restoring states’ important role in the regulation of water,” said EPA Administrator Scott Pruitt. “Like President Trump, I believe that we need to work with our state governments to understand what they think is the best way to protect their waters, and what actions they are already taking to do so. We want to return to a regulatory partnership, rather than regulate by executive fiat.”

“The Army, together with the Corps of Engineers, is committed to working closely with and supporting the EPA on these rulemakings.  As we go through the rulemaking process, we will continue to make the implementation of the Clean Water Act Section 404 regulatory program as transparent as possible for the regulated public, ” said Douglas Lamont, senior official performing the duties of the Assistant Secretary of the Army for Civil Works.

The Clean Water Act asserts federal control over “navigable waters” without providing clarity or details about the law’s scope. President Donald Trump signed an executive order on February 28, 2017 to direct federal agencies to roll back and replace the Obama Administration’s Clean Water Rule – also known as the “Waters of the U.S.” or WOTUS – to ensure that the nation’s navigable waters are kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of Congress and the States under the Constitution.

To meet the objectives of the executive order, federal agencies are following a two-step process that will provide as much certainty as possible, as quickly as possible, to the regulated community and the public during the development of the replacement rule.

The first step is to revise the Code of Federal Regulations to re-codify the definition of “Waters of the United States” which currently governs administration of the Clean Water Act, in light of a decision by the U.S. Court of Appeals for the Sixth Circuit staying a definition of “Waters of the United States” promulgated by the agencies in 2015. This action will simply make the text of the Code of Federal Regulations reflect the definition currently in effect under the Sixth Circuit stay. This action, when final, will not change current practice with respect to the how the definition applies, which is consistent with Supreme Court decisions, agency guidance documents, and longstanding practice.

The second step will be a public notice-and-comment rulemaking involving a substantive reevaluation and revision of the definition of “Waters of the U.S.” in accordance with the executive order. The letter sent to governors today is seeking input on the second step of the process.

Source: EPA