Betting on American energy
New Interior Department official sees a key role for offshore drilling
THE Offshore Technology Conference opens Monday, just a few days after President Donald Trump took steps to overturn Obama administration policies and open offshore tracts in the Atlantic and Arctic to drilling. But the new administration will still have its hands full fulfilling his promise to expand the U.S. oil and gas industry at a time commodity prices remain less than half their 2014 levels.
Kate MacGregor, the Department of Interior’s new assistantsecretary for land and minerals management and a former Capitol Hill staffer, spoke with the Chronicle about the new administration’s plans for the Gulf of Mexico and where she thinks the Obama administration got it wrong. Edited excerpts follow:
Q: Donald Trump has not been shy about criticizing how the last administration regulated the oil and gas industry. What does the new administration plan to do differently when it comes to the Gulf of Mexico and the rest of the United States’ offshore fields?
A: This administration has very serious plans to grow the entire economy, and a huge part of that is utilizing American energy. Right now 96 percent of the Outer Continental Shelf is off limits, so I think it’s no surprise that if we’re going to increase domestic energy production, offshore will have a very important role to play.
Q: President Trump has ordered federal agencies to review all regulations that affect the energy industry to see if they need to be adjusted. Are the
offshore drilling safety regulations enacted by the Obama administration following the Deepwater Horizon explosion on the table?
A: First and foremost, safety remains our number one priority over here at (the Interior Department), and that’s something that doesn’t change between administrations. But we do need to have smart regulations in place that demonstrate a measurable impact on improving safety, but also make sure we have a vibrant economy in the Gulf. We just want to find the appropriate balance between safety and making sure we can also go forward with offshore energy development.
Q: The Trump administration has announced it plans to reverse former President Obama’s decision to block offshore drilling in the Arctic and Atlantic oceans. How does the administration look at the Arctic and Atlantic in terms of its economic potential? What are you seeing and hearing up there?
A: About a month ago there was a big find on the North Slope of Alaska. When I look at, that there’s still a lot of promise up in the Arctic. We have a lot of infrastructure up there. The Arctic is something that could potentially be on the table.
Q: Last year the federal government only took in $6.2 billion in revenue in energy royalties from federal lands and waters. That is down by more than half from 2014. The last administration explained this decline as the result of the dramatic falls in commodity prices, but considering your condemnation of government regulation, I wonder if you have the same point of view?
A: There’s a lot of different forces at play when it comes to the offshore. And we’re going to find out (what role regulation played). It can take seven to 10 years to get an offshore project off the ground. The regulations of today have a very real impact on our future path. I don’t think it’s just pricing. We saw our Central Gulf lease sales this March higher than the Central Gulf lease sales last year. I’m hoping we’ve turned a corner and things will keep looking up.
Q: At times during his campaign President Trump almost sounded like a booster for the U.S. oil and gas industry. Now he’s in office, what are oil and gas executives saying to you?
A: We’re hearing from an industry that is excited for the future under a Trump administration, an administration that’s less interested in keeping it in the ground and more in keeping America first and finding that balance between economic opportunity and not sacrificing safety and environmental protection.