Industry trade group chief supportive of Obama offshore drilling plan

Washington - April 5, 2010

The head of the leading organization for offshore oil and gas operators, appearing on the Platts Energy Week weekend television program, described the recently-released Obama administration offshore drilling plan as "drill, maybe drill," but emphasized it "is a long way from fruition."

Randall Luthi, who recently began his tenure as president of the National Ocean Industries Association, told Platts Energy Week Sunday that his organization "greatly appreciates the first effort." Luthi also is a former director of the Minerals Management Service (MMS), which will oversee the implementation of any formal lease sale, exploration and production that would come out of the announcement this past week.

Platts Energy Week is a new weekly half-hour television program for discussion and debate on U.S. energy policy, produced by W*USA Television and Platts, a leading global energy and metals information provider. The program airs every Sunday at 8:00 a.m. ET on W*USA Television in the greater Washington D.C. metropolitan area and shortly thereafter online at plattsenergyweektv.com.

The Obama administration plan has several key features, including the opening of Atlantic Ocean acreage between Delaware and Georgia to exploration, opening up the eastern Gulf of Mexico, and new restrictions on drilling in the Pacific Ocean and near Alaskan waters.

Despite those restrictions, Luthi was mostly upbeat in his comments, even though he said reductions in the amount ultimately available for lease were possible. "You start expansive," he said. "That was our philosophy (when he headed MMS). You put everything in there that you think is conceivable, because you don't add areas as you go along. The fact is you reduce what's in there."

Luthi cited rough MMS estimates on the size of the reserves in the Atlantic Coast, which are drawn from old data and range from 60-80 billion barrels of oil and 160-290 trillion cubic feet of natural gas. But he conceded that "we're not sure what's there. The companies would like the opportunity to get in there and at least find out if there's something there."

Two starkly opposing points of view were also featured on the program, in a debate between Bill Snape, Senior Counsel at the Center for Biological Diversity, and Thomas Pyle, President of the Institute for Energy Research, a Washington think tank that supports aggressive efforts at boosting supply.

Pyle described the administration's plan as "kind of a dream come true" for opponents of offshore drilling. "It takes areas off the table that were already on the table," referring to the Pacific and Alaska closures. Pyle said he believed the part of the plan that opens up areas, like in the Atlantic, were part of a broader effort to make cap-and-trade legislation more palatable to some senate. The offshore drilling proposal gives backers of cap-and-trade, such as Senator Lindsey Graham (Republican-South Carolina) "kind of political cover...to go for it and see if over the next several months they can cobble together 60 votes to get a national cap-and-trade energy tax through."

In stark contract, Snape said the drilling plan was illegal as it is in conflict with other environmental restrictions, and "from our point of view any drilling in those types of areas is a very bad idea." He rejected Pyle's claim that the American public will back more drilling: "I don't think that they agree that they want their beaches polluted," he said. "I think this is another politically disastrous decision."

Program host Bill Loveless is the long-time chief editor of Platts’ Inside Energy and brings nearly three decades of energy journalism experience to the anchor chair. Platts Energy Week follows an interview format featuring guests from the Obama administration, Congress, government agencies, think tanks, the investment community and the energy industry.

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