The American Petroleum Institute (API) is calling attention to a new study that explores the potential benefits of expanding oil and gas development in the Atlantic Outer Continental Shelf. The research was performed by Quest Offshore Resources, with the support of the API and the National Ocean Industries Association.
In a press release discussing the study's conclusions, API Director of Upstream and Industry Operations Erik Milito emphasized the wide range of benefits that could come from deploying oil production equipment in areas where drilling has been prohibited in the past.
"Oil and natural gas production off our Atlantic coast is a potential gold mine," Milito said. "Developing oil and natural gas in the Atlantic could put hundreds of thousands of Americans to work, make us more energy secure, and bring in needed revenue for the government."
Loosening federal restrictions could lead to almost $200 billion in investment
According to Quest's researchers, between 2017 and 2035, development of oil and gas reserves located in the Outer Continental Shelf could:
- Attract $195 billion worth of investment from the private sector
- Create almost 280,000 jobs throughout the country
- Increase U.S. oil production by more than 1 million barrels per day
- Inject as much as $23.5 billion into the American economy each year
- Generate more than $50 billion in revenue for the government.
Milito said that these benefits would start to be realized "years before the first barrel goes to market," with investment and job creation starting almost immediately. The API official also explained that increasing the pace of development would "send a strong signal to the energy markets that America is leading the world in developing energy resources, which could help put downward pressure on prices." In turn, this would foster economic growth.
"But none of these benefits will appear unless the federal government follows pro-development energy policies," Milito said.
Congress recently voted to implement a 2012 treaty between the U.S. and Mexico, which established procedures for developing reservoirs that lay on both sides of the border. This action promises to encourage new investment in the Atlantic, but additional regulatory accommodation will be necessary to unlock the full potential of the Outer Continental Shelf. The API reports that the Obama Administration is currently considering whether to grant companies permits to perform seismic surveys of the region. This would allow companies to develop a clear picture of where the region's hydrocarbon reserves are located, which would ensure that oil and gas wells could be sited in the right locations.
However, federal officials have been reluctant to grant their approval for this process and even once the administration signs off, companies looking to capitalize on new opportunities will still face considerable operational challenges in the offshore environment. When well operators are ready to complete well testing and start producing, having the right artificial lift equipment in place is essential, as it will help ensure that hydrocarbons can be produced as quickly and safely as possible.