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Thursday, May 12, 2011

Outer Continental Shelf Moratoria on Oil and Gas Development

Curry L. Hagerty
Specialist in Energy and Natural Resources Policy

Moratoria measures for the outer continental shelf (OCS) establish bans or restrictions on oil and gas exploration and development in federal ocean areas. With some exceptions for marine sanctuaries and monuments, no portion of the federal OCS has a permanent moratorium on oil and gas leasing and development. While some areas are under temporary development bans, such as suspensions or moratoria directed by either legislative or executive powers, most of the OCS is free of such restrictions and is considered permissible for offshore leasing activity.

Aspects of moratorium policy (either establishing or lifting temporary bans on oil and gas exploration and development) are derived from legislative and executive powers to direct offshore leasing activities. A shift in both legislative and executive moratorium policy during the 111
th Congress signaled an end to measures that had banned development in some OCS areas since the early 1980s. Legislative moratoria enacted annually by Congress for about 27 years as part of the Department of the Interior appropriations acts expired on September 30, 2008. In areas where OCS leasing restrictions were changed, some preliminary oil and gas leasing activity has commenced, but no lease sales have been held.

Support for three national objectives coalesced in 2009, resulting in the removal of most congressional and executive constraints on oil and gas exploration and development: (1) promoting domestic energy production to improve the nation’s energy security, (2) enhancing federal revenue, and (3) spurring innovation and diversification in ocean energy technologies to help create new jobs. The shift in moratorium policy, along with two other developments—the start of federal offshore renewable ocean energy projects (e.g., offshore wind farms) and expanded oil and gas prospecting in deepwater areas—increased the responsibilities of the federal offshore energy program.

Around the world, changing ocean energy policies are affecting how nations govern offshore areas. Economic pressures and technological advances are driving changes in moratorium policy as the global search for energy reaches into deeper ocean waters. A number of countries are revisiting policies about offshore areas, and some countries are making claims to expand their reach for offshore resources. One venue for claims of this nature is the United Nations Convention on the Law of the Sea (UNCLOS). Although the United States has not ratified UNCLOS, the State Department has taken measures to address the U.S. extended continental shelf areas in a manner not inconsistent with the UNCLOS process. These measures signal changes in U.S. policies about moratorium areas.

In the aftermath of the Deepwater Horizon oil spill, the regulatory context is unsettled, and policymakers are considering many different options to restore regulatory and economic normalcy in the Gulf region. Congress is considering the role moratorium policy may play in this context. In the 112
th Congress, moratorium policy is addressed in H.R. 1231, which was reported by the House Committee on Natural Resources on May 2, 2011.

Date of Report: May 6, 2011
Number of Pages: 19
Order Number: R41132
Price: $29.95

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