Offshore Oil vs. Offshore Renewables

A significant victory was acheived yesterday for offshore renewables. The Bush Administration's midnight plan to open up approximately 300 million acres of America's coastline to oil and gas companies was delayed by Interior Secretary Ken Salazar. The Bush plan was signed four days before Obama took office and the public hearing period was scheduled to be completed in March 23. Salazar has extended the deadline until September 23

Salazar said the Bush proposal " opened up the possibility for oil and gas leasing along the entire eastern seaboard, portions of offshore California, and the far eastern Gulf of Mexico - with almost no consideration of state, industry, and community input and, in the case of the Atlantic coast, with very limited information about the nature of offshore resources." The Secretary said it "was a process rigged to force hurried decisions based on bad information. It was a process tilted toward the usual energy players while renewable energy companies and the interests of American consumers and taxpayers were overlooked."

Salazar's Four Steps

1. Extension of public comment period on Bush plan for offshore drilling to September

2. Offshore Resources Report. U.S. Department of Minerals Management Service (MMS) and the U.S. Geological Survey will assemble a report of all the information we have about our offshore resources to determine where gaps in information exist ( Environmental News Service). Report is due in 45 days.

3. Four regional meetings around the country to gather the best ideas for offshore energy uses. The meetings will take place within a 30-day timeframe post-submission of the offshore report by MMS and Geological Survey. Meetings will be held in Alaska, the Pacific Coast, the Atlantic Coast, and the Gulf Coast.

4.Final rulemaking for offshore renewables. Salazar will issue final rulemaking for offshore renewables as required by the Energy Policy Act of 2005. Timeframe is in the next several months.

Big Picture

Offshore renewable leases will replace the offshore oil and gas leases in a similar timeframe as the Bush Administration plan -- 2013 through 2017 -- and perhaps even sooner. Final rulemaking on offshore renewables will immediately increase investments in offshore renewable energy projects.Salazar's comments were a strong signal regarding future U.S. energy policy -- The Department of the Interior oversees 1.7 billion offshore acres (an area roughly three-fourths of the size of the entire terrestrial United States).

Surprisingly, oil industry executives were upset at the delay and noted that the International Energy Agencyhas projected the world will need 40 percent more energy in 2030 than it consumes today and of course oil will meet that demand (AP).

All of this occurred on the same day that the IEA cut its forecast for Global Oil Demand. The IEA beleives global demand for oil will decrease 1.2% this year, the biggest annual drop in 27 years (WSJ).

Jumpstarting our recessing economies through more oil exploration and drilling is not a real answer. On the other hand, creating new jobs, new industries through the development of new, renewable energy resources and a new energy infrastructure is a great way to kick-start an economic boom.