Offshore drilling on the US Atlantic coast
Encyclopedia
Offshore drilling
on the US Atlantic coast for oil and gas
took place from 1947 to the early 1980s. Oil companies drilled 5 wells in Atlantic Florida state waters and 51 exploratory wells on federal leases on the outer continental shelf of the Atlantic coast
. None of the wells were completed as producing wells. All the leases have now reverted to the government.
Although no oil or gas have been produced from beneath US Atlantic waters, there are active offshore fields to the south in offshore Cuba
and to the north in offshore Canada.
Each coastal state along the Atlantic coast owns the territory extending three nautical mile
s (3.45 statute, or land miles) from the shore at mean low tide, and has jurisdiction to decide whether or not, and under what terms, to lease the territory for oil and gas. The federal government owns and controls the minerals between three and 200 nautical miles (370.4 km) from the shore.
In accordance with congressional restrictions and presidential orders, no federal leasing has taken place on the offshore US Atlantic coast since the early 1980s. The federal government had scheduled a lease sale offshore Virginia
, to take place in 2011, and in March 2010, US President Barack Obama
announced his intention to open the Mid-Atlantic and South Atlantic planning areas to oil and gas exploration. However, lease sale plans were cancelled following the Deepwater Horizon oil spill in May 2010. In December 2010, Interior Secretary Ken Salazar
announced a ban on drilling in federal waters off the Atlantic coast through 2017.
A 1996 study by the US Minerals Management Service
(MMS) estimated undiscovered conventionally recoverable resources in Atlantic federal waters to be 7200000000 barrels (1,144,708,524,000 l) of oil and 27.5 trillion cubic feet (TCF) gas.
from 1947 to 1962. Gulf Oil
drilled three wells in federal waters south of the Florida Keys in 1960 and 1961. All the wells were dry holes.
The boundary between the Exclusive Economic Zone
s of the US and Cuba is halfway between Cuba and Florida, as determined by a 1977 treaty between the US and Cuba.
The issue of allowing oil and gas exploration offshore Florida became a hotly contested topic in the 2008 US elections. In a column published 5 June 2008, syndicated columnist George Will
wrote that a Chinese oil company was then drilling in Cuba
n waters 60 miles (96.6 km) from the Florida coast, a claim that was repeated by candidates in favor of offshore drilling. George Will later acknowledged that no drilling was then taking place in that part of Cuban waters.
In 2004 the Spanish oil company Repsol-YPF drilled in deep Cuban waters between Cuba and the Florida Keys, and found an oil deposit; the deposit was judged noncommercial, and the hole was plugged. In October 2008, Cuba signed an agreement with the Brazil
ian state oil company Petrobras
, which provides for Petrobras to drill for oil and gas in deep waters off the north shore of Cuba. In July 2009, Cuba signed an agreement with the Russian government giving the Russian oil company Zarubezhneft
oil exploration rights off the north shore of Cuba.
-registered company BPC Limited and Norwegian
company Statoil
announced a joint venture to drill for oil in Bahamian waters north of Cuba and southeast of Florida. The government of the Bahamas has indicated that applications for offshore drilling are on hold pending negotiations with Cuba, the United States, and the Turks and Caicos Islands
on the exact boundaries between their respective Exclusive Economic Zone
s.
and Florida
was held in 1978. Oil companies drilled seven wells, all dry holes.
, but in 1990 the US Secretary of Commerce denied Mobil Oil permission to drill after Congress passed the North Carolina Outer Banks
Protection Act, prohibiting leasing and drilling on federal seabed offshore from North Carolina. Mobil and Marathon Oil
sued the federal government to recover money paid for the leases. The US Supreme Court ruled for the oil companies in June 2000, and ordered the federal government to repay $158 million. The government paid, and the companies relinquished the leases.
, Maryland
, and Virginia
. In one area, five wells tested significant flows of gas from Jurassic
rocks, at rates as high as 18.9 million cubic feet per day. A 3-dimensional seismic survey
was made over the area, but, in part due to falling gas prices in the 1980s, the lessee oil companies concluded that the tracts were uneconomic. The last leases were relinquished in 1984.
From 1976 though 1982, oil companies drilled ten exploratory wells in the US portion of the Georges Bank
Basin, about 120 miles (193.1 km) off the coast of Massachusetts
. The deepest well had a total depth of 21874 feet (6,667.2 m). None was successful.
(SOEP) offshore Nova Scotia
in 1971, began producing natural gas in 2000, and is still producing. A second natural gas field offshore Nova Scotia is expected to start delivering gas in 2010. Gas production required the construction of an undersea, offshore pipeline to link the production wells with gas markets. SOEP is owned by ExxonMobil Canada Limited (50.8%), Shell Canada Limited (31.3%), Imperial Oil Limited (9.0%), Pengrowth (8.4%) and Moshbacher Operating Limited (0.5%). The Sable Project produces between 400 and 500 million cubic feet of natural gas and 20000 barrels (3,179,745.9 l) of natural gas liquids every day.
Canada has imposed a moratorium until 2012 on drilling in the Canadian portion of the Georges Bank.
Under the 5-year offshore leasing plan for 2007–2012, the MMS scheduled a lease sale for tracts 50 miles (80.5 km) or more off the coast of Virginia, to take place in 2011. Five companies applied to the MMS to conduct seismic exploration surveys off the US Atlantic coast. The MMS requested funding for an Environmental Impact Statement
to decide whether of not to allow the proposed seismic surveys.
The possible offshore lease sale became an issue in the 2009 race for governor of Virginia. The winner and current governor Bob McDonnell
has urged that the sale take place.
In May 2010, President Obama announced his decision to cancel the offshore Virginia lease sale, in response to the Deepwater Horizon oil spill
in the Gulf of Mexico
. Obama had previously supported the lease sale.
Offshore drilling
Offshore drilling refers to a mechanical process where a wellbore is drilled through the seabed. It is typically carried out in order to explore for and subsequently produce hydrocarbons which lie in rock formations beneath the seabed...
on the US Atlantic coast for oil and gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
took place from 1947 to the early 1980s. Oil companies drilled 5 wells in Atlantic Florida state waters and 51 exploratory wells on federal leases on the outer continental shelf of the Atlantic coast
East Coast of the United States
The East Coast of the United States, also known as the Eastern Seaboard, refers to the easternmost coastal states in the United States, which touch the Atlantic Ocean and stretch up to Canada. The term includes the U.S...
. None of the wells were completed as producing wells. All the leases have now reverted to the government.
Although no oil or gas have been produced from beneath US Atlantic waters, there are active offshore fields to the south in offshore Cuba
Cuba
The Republic of Cuba is an island nation in the Caribbean. The nation of Cuba consists of the main island of Cuba, the Isla de la Juventud, and several archipelagos. Havana is the largest city in Cuba and the country's capital. Santiago de Cuba is the second largest city...
and to the north in offshore Canada.
Each coastal state along the Atlantic coast owns the territory extending three nautical mile
Nautical mile
The nautical mile is a unit of length that is about one minute of arc of latitude along any meridian, but is approximately one minute of arc of longitude only at the equator...
s (3.45 statute, or land miles) from the shore at mean low tide, and has jurisdiction to decide whether or not, and under what terms, to lease the territory for oil and gas. The federal government owns and controls the minerals between three and 200 nautical miles (370.4 km) from the shore.
In accordance with congressional restrictions and presidential orders, no federal leasing has taken place on the offshore US Atlantic coast since the early 1980s. The federal government had scheduled a lease sale offshore Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
, to take place in 2011, and in March 2010, US President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
announced his intention to open the Mid-Atlantic and South Atlantic planning areas to oil and gas exploration. However, lease sale plans were cancelled following the Deepwater Horizon oil spill in May 2010. In December 2010, Interior Secretary Ken Salazar
Ken Salazar
Kenneth Lee "Ken" Salazar is the current United States Secretary of the Interior, in the administration of President Barack Obama. A member of the Democratic Party, he previously served as a United States Senator from Colorado from 2005 to 2009. He and Mel Martinez were the first Hispanic U.S...
announced a ban on drilling in federal waters off the Atlantic coast through 2017.
Reserves
No oil or gas has been produced from the US Atlantic continental shelf.A 1996 study by the US Minerals Management Service
Minerals Management Service
The Bureau of Ocean Energy Management, Regulation and Enforcement , formerly known as the Minerals Management Service , was an agency of the United States Department of the Interior that managed the nation's natural gas, oil and other mineral resources on the outer continental shelf...
(MMS) estimated undiscovered conventionally recoverable resources in Atlantic federal waters to be 7200000000 barrels (1,144,708,524,000 l) of oil and 27.5 trillion cubic feet (TCF) gas.
Straits of Florida
Five wells were drilled in state waters south of the Florida KeysFlorida Keys
The Florida Keys are a coral archipelago in southeast United States. They begin at the southeastern tip of the Florida peninsula, about south of Miami, and extend in a gentle arc south-southwest and then westward to Key West, the westernmost of the inhabited islands, and on to the uninhabited Dry...
from 1947 to 1962. Gulf Oil
Gulf Oil
Gulf Oil was a major global oil company from the 1900s to the 1980s. The eighth-largest American manufacturing company in 1941 and the ninth-largest in 1979, Gulf Oil was one of the so-called Seven Sisters oil companies...
drilled three wells in federal waters south of the Florida Keys in 1960 and 1961. All the wells were dry holes.
The boundary between the Exclusive Economic Zone
Exclusive Economic Zone
Under the law of the sea, an exclusive economic zone is a seazone over which a state has special rights over the exploration and use of marine resources, including production of energy from water and wind. It stretches from the seaward edge of the state's territorial sea out to 200 nautical...
s of the US and Cuba is halfway between Cuba and Florida, as determined by a 1977 treaty between the US and Cuba.
Offshore Cuba
Cuba has three producing offshore oil fields within 5 km of its north coast opposite Florida. The US Geological Survey estimates that the North Cuba Basin contains 5500000000 barrels (874,430,122,500 l) of undiscovered petroleum liquids and 9.8 trillion cubic feet of natural gas, almost all in the offshore part of the basin.The issue of allowing oil and gas exploration offshore Florida became a hotly contested topic in the 2008 US elections. In a column published 5 June 2008, syndicated columnist George Will
George Will
George Frederick Will is an American newspaper columnist, journalist, and author. He is a Pulitzer Prize-winner best known for his conservative commentary on politics...
wrote that a Chinese oil company was then drilling in Cuba
Cuba
The Republic of Cuba is an island nation in the Caribbean. The nation of Cuba consists of the main island of Cuba, the Isla de la Juventud, and several archipelagos. Havana is the largest city in Cuba and the country's capital. Santiago de Cuba is the second largest city...
n waters 60 miles (96.6 km) from the Florida coast, a claim that was repeated by candidates in favor of offshore drilling. George Will later acknowledged that no drilling was then taking place in that part of Cuban waters.
In 2004 the Spanish oil company Repsol-YPF drilled in deep Cuban waters between Cuba and the Florida Keys, and found an oil deposit; the deposit was judged noncommercial, and the hole was plugged. In October 2008, Cuba signed an agreement with the Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
ian state oil company Petrobras
Petrobras
Petróleo Brasileiro or Petrobras is a semi-public Brazilian multinational energy corporation headquartered in Rio de Janeiro, Brazil. It is the largest company in Latin America by market capitalization and revenue, and the largest company headquartered in the Southern Hemisphere by market...
, which provides for Petrobras to drill for oil and gas in deep waters off the north shore of Cuba. In July 2009, Cuba signed an agreement with the Russian government giving the Russian oil company Zarubezhneft
Zarubezhneft
JSC Zarubezhneft is a Russian state-controlled oil company based in Moscow that specializes in exploration, development and operation of oil and gas fields outside Russian territory....
oil exploration rights off the north shore of Cuba.
Offshore Bahamas
In 2009 the Falkland IslandsFalkland Islands
The Falkland Islands are an archipelago in the South Atlantic Ocean, located about from the coast of mainland South America. The archipelago consists of East Falkland, West Falkland and 776 lesser islands. The capital, Stanley, is on East Falkland...
-registered company BPC Limited and Norwegian
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
company Statoil
Statoil
Statoil ASA is a Norwegian petroleum company established in 1972. It merged with Norsk Hydro in 2007 and was known as StatoilHydro until 2009, when the name was changed back to Statoil ASA. The brand Statoil was retained as a chain of fuel stations owned by StatoilHydro...
announced a joint venture to drill for oil in Bahamian waters north of Cuba and southeast of Florida. The government of the Bahamas has indicated that applications for offshore drilling are on hold pending negotiations with Cuba, the United States, and the Turks and Caicos Islands
Turks and Caicos Islands
The Turks and Caicos Islands are a British Overseas Territory and overseas territory of the European Union consisting of two groups of tropical islands in the Caribbean, the larger Caicos Islands and the smaller Turks Islands, known for tourism and as an offshore financial centre.The Turks and...
on the exact boundaries between their respective Exclusive Economic Zone
Exclusive Economic Zone
Under the law of the sea, an exclusive economic zone is a seazone over which a state has special rights over the exploration and use of marine resources, including production of energy from water and wind. It stretches from the seaward edge of the state's territorial sea out to 200 nautical...
s.
Southern Atlantic coast
The first lease sale in the Southeast Georgia Embayment off the coast of GeorgiaGeorgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...
and Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
was held in 1978. Oil companies drilled seven wells, all dry holes.
Middle Atlantic coast
A number of oil companies bought federal leases offshore North CarolinaNorth Carolina
North Carolina is a state located in the southeastern United States. The state borders South Carolina and Georgia to the south, Tennessee to the west and Virginia to the north. North Carolina contains 100 counties. Its capital is Raleigh, and its largest city is Charlotte...
, but in 1990 the US Secretary of Commerce denied Mobil Oil permission to drill after Congress passed the North Carolina Outer Banks
Outer Banks
The Outer Banks is a 200-mile long string of narrow barrier islands off the coast of North Carolina, beginning in the southeastern corner of Virginia Beach on the east coast of the United States....
Protection Act, prohibiting leasing and drilling on federal seabed offshore from North Carolina. Mobil and Marathon Oil
Marathon Oil
Marathon Oil Corporation is a United States-based oil and natural gas exploration and production company. Principal exploration activities are in the United States, Norway, Equatorial Guinea, Angola and Canada. Principal development activities are in the United States, the United Kingdom, Norway,...
sued the federal government to recover money paid for the leases. The US Supreme Court ruled for the oil companies in June 2000, and ordered the federal government to repay $158 million. The government paid, and the companies relinquished the leases.
North Atlantic coast
About 30 wells explored the Baltimore Canyon Trough, about 100 miles (160.9 km) off the coast of New JerseyNew Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
, Maryland
Maryland
Maryland is a U.S. state located in the Mid Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east...
, and Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
. In one area, five wells tested significant flows of gas from Jurassic
Jurassic
The Jurassic is a geologic period and system that extends from about Mya to Mya, that is, from the end of the Triassic to the beginning of the Cretaceous. The Jurassic constitutes the middle period of the Mesozoic era, also known as the age of reptiles. The start of the period is marked by...
rocks, at rates as high as 18.9 million cubic feet per day. A 3-dimensional seismic survey
Reflection seismology
Reflection seismology is a method of exploration geophysics that uses the principles of seismology to estimate the properties of the Earth's subsurface from reflected seismic waves. The method requires a controlled seismic source of energy, such as dynamite/Tovex, a specialized air gun or a...
was made over the area, but, in part due to falling gas prices in the 1980s, the lessee oil companies concluded that the tracts were uneconomic. The last leases were relinquished in 1984.
From 1976 though 1982, oil companies drilled ten exploratory wells in the US portion of the Georges Bank
Georges Bank
Georges Bank is a large elevated area of the sea floor which separates the Gulf of Maine from the Atlantic Ocean and is situated between Cape Cod, Massachusetts and Cape Sable Island, Nova Scotia ....
Basin, about 120 miles (193.1 km) off the coast of Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
. The deepest well had a total depth of 21874 feet (6,667.2 m). None was successful.
Offshore Atlantic Canada
Farther north, drilling has taken place in offshore Atlantic Canada since 1967. Gas was discovered on the Sable Offshore Energy ProjectSable Offshore Energy Project
The Sable Offshore Energy Project is a consortium based in Halifax, Nova Scotia which is attempting to locate and produce natural gas found near Sable Island on the edge of the Nova Scotian continental shelf in eastern Canada...
(SOEP) offshore Nova Scotia
Nova Scotia
Nova Scotia is one of Canada's three Maritime provinces and is the most populous province in Atlantic Canada. The name of the province is Latin for "New Scotland," but "Nova Scotia" is the recognized, English-language name of the province. The provincial capital is Halifax. Nova Scotia is the...
in 1971, began producing natural gas in 2000, and is still producing. A second natural gas field offshore Nova Scotia is expected to start delivering gas in 2010. Gas production required the construction of an undersea, offshore pipeline to link the production wells with gas markets. SOEP is owned by ExxonMobil Canada Limited (50.8%), Shell Canada Limited (31.3%), Imperial Oil Limited (9.0%), Pengrowth (8.4%) and Moshbacher Operating Limited (0.5%). The Sable Project produces between 400 and 500 million cubic feet of natural gas and 20000 barrels (3,179,745.9 l) of natural gas liquids every day.
Canada has imposed a moratorium until 2012 on drilling in the Canadian portion of the Georges Bank.
Future lease sales
The Obama adminsitration announced in March 2010 that it intended to open oil and gas leasing in the Mid-Atlantic and South Atlantic planning areas. However, in May 2010, following the Deepwater Horizon oil spill, the administration cancelled the only scheduled Atlantic lease sale, for an area offshore Virginia. On December 1, 2010, the Obama Administration closed Atlantic and eastern Gulf areas to drilling.Offshore Virginia
Commercial oil and gas drilling has never occurred offshore Virginia. Unlike the offshore drilling in the Gulf of Mexico, which occurs in both state and federal waters, the proposed offshore Virginia drilling would be exclusively in Federal waters more than 50 miles (80.5 km) from the coast, and the state has not leased its state waters for drilling. A second difference is that although federal law has been amended to share royalties in federal waters in the Gulf between the federal government and the adjacent state, all royalty revenues from any offshore drilling in federal Atlantic waters is not shared with the states.Under the 5-year offshore leasing plan for 2007–2012, the MMS scheduled a lease sale for tracts 50 miles (80.5 km) or more off the coast of Virginia, to take place in 2011. Five companies applied to the MMS to conduct seismic exploration surveys off the US Atlantic coast. The MMS requested funding for an Environmental Impact Statement
Environmental impact statement
An environmental impact statement , under United States environmental law, is a document required by the National Environmental Policy Act for certain actions "significantly affecting the quality of the human environment". An EIS is a tool for decision making...
to decide whether of not to allow the proposed seismic surveys.
The possible offshore lease sale became an issue in the 2009 race for governor of Virginia. The winner and current governor Bob McDonnell
Bob McDonnell
Robert Francis "Bob" McDonnell is an American politician who has been the 71st Governor of Virginia since January 2010. A former lieutenant colonel in the United States Army, McDonnell served in the Virginia House of Delegates from 1993 to 2006 and served as Attorney General of Virginia from 2006...
has urged that the sale take place.
In May 2010, President Obama announced his decision to cancel the offshore Virginia lease sale, in response to the Deepwater Horizon oil spill
Deepwater Horizon oil spill
The Deepwater Horizon oil spill is an oil spill in the Gulf of Mexico which flowed unabated for three months in 2010, and continues to leak fresh oil. It is the largest accidental marine oil spill in the history of the petroleum industry...
in the Gulf of Mexico
Gulf of Mexico
The Gulf of Mexico is a partially landlocked ocean basin largely surrounded by the North American continent and the island of Cuba. It is bounded on the northeast, north and northwest by the Gulf Coast of the United States, on the southwest and south by Mexico, and on the southeast by Cuba. In...
. Obama had previously supported the lease sale.