Implementing an America-First Offshore Energy Strategy (Executive Order 13795)
This Executive Order is the first step toward opening previously-protected parts of the Outer Continental Shelf to oil and gas exploration by revoking or modifying previous executive orders and memoranda, streamlining permitting processes for oil and gas exploration, restricting expansion of the National Marine Sanctuary program, and reviewing or reconsidering existing worker safety and environmental laws.
This order is the second issued by President Donald J. Trump with relevance to the energy sector in the United States (the first, issued on March 28, 2017, was “Promoting Energy Independence and Economic Growth”), and represents a campaign promise to rescind or revise the majority of environmental regulations placed on energy production by the Obama administration.
This order is also part of a broader legislative effort to expand opportunities for oil and gas drilling in the Outer Continental Shelf of the United States, and to reduce the regulatory burden of compliance with safety and environmental requirements – including regulations aimed at preventing oil spills.
The Order has eight components: first, it instructs the Secretary of Interior to work with the Secretary of Defense to review and, potentially, revise the current schedule of federal oil and gas leases to include parts of the Outer Continental Shelf; specifically:
- the Western Gulf of Mexico
- Central Gulf of Mexico
- Chukchi Sea (Alaska)
- Beaufort Sea (Alaska)
- Cook Inlet (Alaska)
- South Atlantic
Second, it instructs the Secretary of the Interior to work with the Secretary of Commerce to create a streamlined permitting process for oil and gas exploration preparatory activities – including:
- Seismic testing/survey permit applications under the Outer Continental Shelf Lands Act, 43 U.S.C. 1331 et seq.
- Incidental take authorization requests under the Marine Mammal Protection Act, 16 U.S.C. 1361 et seq.
Third, it prohibits the Secretary of Commerce from establishing new National Marine Sanctuaries without first assessing the proposed Sanctuary’s potential oil and gas resources. The National Marine Sanctuaries Act (16 U.S.C. 1431 et seq.) provides special protection to areas of the United States marine environment that hold unique national, historical, cultural, ecological, or economic value. This protection prohibits activities leading to destruction, injury, or commercial trade of sanctuary resources, under the jurisdiction of the Secretary of Commerce and the National Oceanographic & Atmospheric Administration (NOAA).
Fourth, it orders a review of all existing National Marine Sanctuaries, conducted jointly by the Secretary of the Interior, the Secretary of Commerce, the Secretary of Defense, and the Secretary of Homeland Security. For each of the Sanctuaries, this review is expected to address: (i) the cost of maintenance, (ii) the adequacy of consultation before establishment; (iii) the opportunity cost of unexplored oil and gas opportunities therein.
Fifth, it revokes Executive Order 13754 of December 9, 2016 (Northern Bering Sea Climate Resilience), which withdrew these areas from oil and gas leasing. The withdrawal was intended to protect the “critical importance of certain areas within the Beaufort and Chukchi Seas to subsistence use by Alaska Natives as well as for marine mammals, other wildlife, and wildlife habitat, and to ensure that the unique resources of these areas remain available for future generations.” (Memorandum, Jan. 27, 2015)
Sixth, it modifies the text of previous Presidential memoranda withdrawing the Marine Sanctuaries of the Outer Continental Shelf from availability for leasing; the modification seeks to ensure that the withdrawal has no impact on leases existing prior to July 14, 2008.
Seventh, the Order instructs the Secretary of Interior to jointly conduct a series of reconsiderations of previous notices with other agencies, including:
- Bureau of Ocean Energy Management; Notice to Lessees No. 2016 N01 of September 12, 2016 (Notice to Lessees and Operators of Federal Oil and Gas, and Sulfur Leases, and Holders of Pipeline Right-of-Way and Right-of-Use and Easement Grants in the Outer Continental Shelf). This notice tightens requirements for oil & gas leaseholders to prove financial stability and security.
- Bureau of Safety and Environmental Enforcement; Final Rule entitled "Oil and Gas and Sulfur Operations in the Outer Continental Shelf-Blowout Preventer Systems and Well Control," 81 Fed. Reg. 25888 (April 29, 2016); this is more commonly known as the Well Control and Blowout Preventer Rule and was implemented after the 2010 Deepwater Horizon incident.
- Bureau of Ocean Energy Management; Proposed Rule entitled "Air Quality Control, Reporting, and Compliance," 81 Fed. Reg. 19718 (April 5, 2016). This proposed rule seeks to align air quality requirements for oil & gas activities with the most current standards of the Environmental Protection Agency (EPA), including making adjustments to emissions standards and logistics of measurement. This Proposed Rule marks the first change to air quality regulations for the Outer Continental Shelf since 1981.
Last, the Order instructs the Secretary of Interior to review the following memoranda or rules in order to revise or rescind them:
- National Oceanographic and Atmospheric Administration; Technical Memorandum NMFS-OPR-55 of July 2016 (Technical Guidance for Assessing the Effects of Anthropogenic Sound on Marine Mammal Hearing)
This document provided guidance for measuring and reporting any negative impacts of human-created (“anthropogenic”) ocean noise on dolphins, whales, manatees, and other marine mammals.
- Bureau of Ocean Energy Management; Final Rule entitled "Oil and Gas and Sulfur Operations on the Outer Continental Shelf—Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf," 81 Fed. Reg. 46478 (July 15, 2016). This rule created regulations specific to movable, exploratory drill rigs used in the Beaufort Sea and Chukchi Sea Planning Areas. The regulations required movable, exploratory drill rig operators to submit an additional operations plan to the Bureau of Ocean Management at least 90 before filing the standard Exploration Plan. Guidelines for this additional operations plan required: (i) evidence of additional safety and contingency plans and equipment, as well as (ii) consideration of the potential impacts of exploration on Alaska Native communities and Arctic ecology.
The Order requires that a report be delivered to the Director of the Office of Management and Budget, the Chairman of the Council on Environmental Quality, and the Assistant to the President for Economic Policy within 180 days (on or before October 25, 2017).
Law & Policy
In the United States, the OCS is under both federal and state jurisdiction. State jurisdiction extends as follows (33 CFR 140.10, July 7, 2011):
- Texas and the Gulf coast of Florida: 3 marine leagues/9 nautical miles (international nautical mile = 6076.10333 feet) seaward
- Louisiana: 3 U.S. nautical miles (U.S. nautical mile = 6080.2 feet) seaward
- All other States' seaward limits are extended 3 nautical miles seaward
Federal jurisdiction extends from the endpoint of state jurisdiction approximately 200 nautical miles seaward (with some exception for areas in which the shelf continues to extend beyond that point).
The United States has protected its OCS from most oil and gas drilling since approximately 1982, with more expansive protections arising over time. Additional well control regulations were promulgated in response to the 2010 Deepwater Horizon Gulf oil spill, which killed 11 people, impacted 1,000 miles of shoreline, and expressed 3.2 million barrels of oil into the Gulf of Mexico. The spill had a permanent impact on the Gulf ecosystem and millions of human lives – including losses of local livelihoods, cultural traditions, and natural heritage.
In 2016, President Barack Obama greatly expanded protections for the OCS by using the Outer Continental Shelf Lands Act to withdraw vast expanses of the Chukchi and Beaufort Seas in Alaska, as well as parts of the Atlantic Canyon, from oil and gas leases.
The Outer Continental Shelf (OCS) is the underwater land base extending at lest 200 miles from the shore into the ocean. This underwater land area creates a section of relatively shallow water (a “shelf sea”) before the steep drop-off into the deep ocean begins at the continental slope, creating the appearance of a “shelf” along the outside of a continent (see map).
As of 2017, 27% of American oil production and 15% of natural gas production takes place offshore, taking into account all the separate regions that comprise the OCS. Estimates of the potential productivity of unexplored areas of the OCS suggest that it may hold approximately 86 billion barrels of oil – approximately 11 years’ worth of U.S. supplies at 2008 consumption rates. An additional 327 trillion cubic feet of undiscovered natural gas, including 127 trillion cubic feet in offshore reserves surrounding Alaska are estimated to be recoverable.
However, there is “significant uncertainty” about the possibility of recovering this amount from the OCS, as the estimate is based on a play-based assessment reliant on current recovery methods, currently available technology, and current geological information – all of which may change as technology improves and/or clearer geographic understanding of reserves is gained.
Expanding oil and gas production in the United States could also foster job creation, particularly in rural and economically marginalized communities. A 2013 report from the American Petroleum Institute indicated that 280,000 jobs would be created by the expansion of offshore energy exploration in the Atlantic, with an additional 100,000 jobs created in the Gulf of Mexico. Recent reports have been more bullish, estimating that as many as 800,000 jobs could be created by expanding offshore energy production overall.
Marine recreation & conservation advocates have contested these numbers, with ocean advocacy organization Oceana estimating approximately 127,000 jobs as a more likely outcome, and pointing to the long timeline over which any economic or occupational growth would be realized (as resources opened in 2017 would likely not become available until 2026 at the earliest).
Opening the OCS to oil and gas exploration will require significant and sustained activities related to preparation, exploration, and extraction that environmental scientists believe are likely to have negative impacts on marine and coastal ecosystems. These activities of concern include, but are not limited to:
- Seismic testing. Seismic testing uses loud, constant bursts of sound – approximately every ten seconds, 24 hours a day, for weeks to months -- to create a map of underwater deposits, reducing the time required to determine where deposits might be located. Seismic testing reduces the time and cost needed for exploration and discovery; however, these loud bursts of sound disrupt the communication, behavior, and welfare of many dolphins and whales, who depend on acoustic communication to travel, feed, and react to threats in their environment. It can also cause direct mortality to young fish.
- Construction of offshore drilling platforms. Building oil and gas infrastructure in the ocean necessarily results in the disruption of ocean beds and the disturbance of their immediate ecosystems.
- Transportation of oil & gas. The extraction and transportation of oil carries the risk of accidental spills (of oil, or of substances associated with construction or later production) that can cause harm to human health, marine and terrestrial ecosystems, and local economies. Oil spills, specifically, have been increasing in frequency over the last century: between 1910 and 1961 the average number of incidents per year was 1.23, increasing to 3.83 incidents per year between 1962 and 1990, and to 6.5 incidents per year between 1991 and 2012.
Endorsements & Opposition
Endorsements of the Executive Order have cited the potential for discovery of additional oil and gas reserves that could help to reduce American dependency on imported energy sources.
Opposition has further cited the low likelihood of significant discovery; the complexity of the American energy system that makes it impossible or unlikely to draw direct linkages to imported energy; the need for a stronger focus on renewable and emerging energy sources; the high risk to offshore developers and workers due to reduced safety regulations included in the Order; the high risk to marine wildlife, particularly acoustic-communicating mammals such as dolphins and whales due to reduced safety regulations included in the order; the high risk to coastal ecosystems due to alterations as a result of oil and gas infrastructure and activities; the high risk to coastal economies due to aesthetic and ecological changes as a result of oil and gas infrastructure and activities; and the extreme risk of damage or loss to local cultural, ecological, and recreational resources as a result of a potential oil and gas spill.
- National Ocean Industries Association, Press Release (April 28, 2017)
Reason: “This Executive Order can be used to craft a long-term, consistent energy blueprint to provide jobs, state and federal revenue, and economic and energy security for America….With a whopping 94 percent of our outer continental shelf currently locked away from oil and gas development, a thorough review of the regulatory framework governing our offshore energy resources is warranted and logical.”
- Oil Spill Commission, Letter (May 8, 2017)
Reason: “The Commission members hold the unanimous view that weakening or rescinding the Well Control Rule would aggravate the inherent risks of offshore operations, put workers in harm’s way, and imperil marine waters in which drilling occurs.”
- Business Alliance for Protecting the Atlantic Coast, Letter (April 28, 2017)
Reason: “Allowing offshore drilling is a forever decision that will forever change our way of life for the worse. We are not the Gulf Coast nor are we envious of the industrialization of the Gulf Coast. Their economy is oil. Ours is tourism, recreation and commercial fishing. The two economies are incompatible.”
- Surfider Foundation, Statement (April 28, 2017)
Reason: “New offshore drilling would threaten thousands of miles of coastline and billions in GDP, for a relatively small amount of oil. Ocean tourism and recreation, worth an estimated $100 billion annually nationwide, provides 12 times the amount of jobs to the U.S. economy, compared to offshore production.”
- League of Conservation Voters, Press Release ahead of the Executive Order (April 11, 2017)
Reason: “Removing protections from Arctic and Atlantic waters so Big Oil can drill would put coastal economies and ways of life at risk of a devastating oil spill, while worsening the consequences of climate change.”