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CERAWeek -- US regulators now a partner to oil and natural gas producers: Zinke

Houston (Platts)--6 Mar 2018 1222 pm EST/1722 GMT


US Interior Secretary Ryan Zinke told a major energy conference Tuesday that the Trump administration was actively working to boost oil and natural gas production by easing regulation and opening up more federal lands and waters to drilling.

"Interior should not be in the business of being an adversary, we should be in the business of being a partner," Zinke said at CERAWeek by IHS Markit. "We shouldn't prevent production."

Other Trump administration officials, including Environmental Protection Agency Administrator Scott Pruitt, have offered similar sentiments in public settings over the last year. Such comments have emboldened fossil fuel opponents, who have stepped up pressure on various government agencies, including Interior.

Zinke announced Monday on Twitter that after talking with residents and local, state and federal officials, his agency had decided to defer an upcoming lease auction of some public lands in his home state of Montana.

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Zinke on Tuesday framed US oil and gas production as "morally better" than importing fossil fuels from overseas markets and referenced the Trump administration goal of "US energy dominance."

"I want to thank you all of you for making American energy great again," Zinke said in front a crowd which included OPEC ministers and Amin Nasser, the president and CEO of Saudi Aramco. "It is better to produce energy in this country."

Zinke said his agency plans to lessen the regulatory burden on domestic oil and gas producers by shortening federal permitting times and altering its safety oversight regime.

"Structurally, we have to change to meet the president's goal to make sure the permitting is done more expeditiously," Zinke said. "We can't get there unless we change."

Zinke said Interior's Bureau of Safety and Environmental Enforcement would shift to a "risk-based" approach to offshore safety, which he compared to the military's approach.

"Not every component is important when it comes to risk," he said.

Interior has proposed opening up nearly all federal waters to oil and gas drilling, although Zinke has said waters offshore Florida would be exempt. But he indicated Tuesday that the path of offshore production remains unclear as US onshore drilling, particularly on private lands, continues to accelerate.

On March 21, Interior plans to hold a lease sale offering 77.3 million acres in the Gulf of Mexico for oil and gas drilling. Interior is calling the lease sale the "largest in US history," and Zinke said it would serve as a "bellwether" for future US offshore production.

"We'll see what the future of offshore is in comparison to the Permian," Zinke said.

He also repeated a frequent refrain that he believes natural gas flaring misses an opportunity to more fully realize America's energy potential, and that instead there should be more incentives provided to encourage companies to build pipelines to move associated gas that is lifted with oil drilling to market.

Interior's Bureau of Land Management said last month it would replace rules governing venting and flaring on federal and tribal lands, with a goal of encouraging more production on federal and tribal lands.

"Personally, I think flaring is wasteful, particularly on public lands," Zinke said.

--Brian Scheid, brian.scheid@spglobal.com
--Harry Weber, Harry.Weber@spglobal.com
--Edited by Jason Lindquist, newsdesk@spglobal.com




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