USA: BOEM set to adopt internet-based oil and gas leasing

The U.S. Subcommittee on Energy and Mineral Resources on Tuesday held a legislative hearing on H.R. 5577, introduced by Louisiana’s Rep. Garret Graves, the “Innovation in Offshore Leasing Act.”

H.R. 5577, a bipartisan bill co-sponsored by Rep. Alan Lowenthal (D-CA), is said to modernize the Bureau of Ocean Energy Management’s (BOEM) offshore leasing process through the use of internet-based oil and natural gas lease sales.

“Federal agencies are notoriously slow to adapt, but I believe the Bureau of Ocean Management is up to the task […]. This bipartisan bill will help the Department of the Interior transition into the 21st Century by fostering an offshore internet leasing program,” Subcommittee Chairman Doug Lamborn (R-CO) said.

Currently, the Secretary of the Interior conducts sealed-bid lease sales for oil and natural gas leasing, in which bids are opened and read aloud in the Superdome in New Orleans, Louisiana. Incorporating internet-based technologies are a cost-effective improvement that will bring greater efficiency and transparency to the Department of the Interior’s (DOI) offshore leasing process, according to a statement published on Tuesday.


Dealing with the government is like going back in time


“Dealing with the government is like going back in time, and workflows the private sector retired decades ago are still alive and well. In the real world, work gets done online – that’s why I introduced this bill,” Rep. Graves stated. “Internet-based oil and gas leasing will open investment opportunities and competition for additional businesses, improve the transparency and efficiency of the process. Giving more companies a chance to work in the offshore will also increase energy revenue sharing to support the resiliency of Louisiana’s coastal ecosystems and communities on which our nation’s economy relies.”

William Britain, co-founder and chairman of EnergyNet, explained the benefits of interactive online lease sales. EnergyNet, an internet platform for oil and gas lease sales, conducts sales for the Bureau of Land Management, the Federal Deposit Insurance Corporation and numerous States including Texas, Colorado, Utah and Wyoming.

“The Oil and Gas Industry and State Lease Agencies have migrated their property sales to the internet in increasing numbers in order to reach more bidders, thus increasing competition, and in the process, enhancing transparency and security,” Britain said.

Jon Hrobsky, policy director for Brownstein Hyatt Farber Schreck, talked about his experience on Outer Continental Shelf (OCS) issues at the DOI and in the private sector noting that BOEM already conducts wind energy lease sales online.

“Even the Department of Motor Vehicles has moved many of its functions to the internet. While the process to move oil and gas lease sales online will not be overnight, it is an endeavor the Bureau can and should do,” Hrobsky said.

Of the 1.7 billion offshore acres, only 1.3% or 22 million are currently under lease. Much of the total acreage including the entire Atlantic coastline are currently barred from exploration. The Obama Administration’s restrictive Five-Year Plan, which is currently being finalized, will likely barricade even more acres from responsible development.

BOEM Deputy Director Walter Cruickshank gave the agency’s stamp of approval on the “overall intent” of the bill.


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