By Jessica Resnick-Ault
HOUSTON, March 12 (Reuters) - The Trump administration'splan to broadly expand drilling in U.S. offshore waters ismoving slowly due to opposition from coastal states andindifference from oil companies that have turned their focus toother opportunities.
The administration hopes encouraging U.S. energy developmentoutside of shale oilfields will further its goal of "energydominance." But existing Obama administration lease rules remainin place through 2022 unless the new rules gain approval.
The Department of the Interior this year proposed openingvast new acreage in the U.S. outer continental shelf todrilling. The comment period wrapped up March 9.Still, Secretary Ryan Zinke said last week he remained deep indiscussions with state governors, some of whom have thrown uproadblocks that would impede or bar drilling off their coasts.
A new outer continental shelf lease program proposes 47lease sales, including areas that had not been offered since1983. At least 12 states have sought exemptions, and Zinke hasagreed to exclude areas off Florida.
"On the five-year plan we made everything available to lookat," Zinke told Reuters at the CERAWeek energy conference inHouston. Governors from across the West Coast and much of theEast Coast are meeting with the Interior and objecting to areasoff their states for drilling. State discussions could lastthrough year end.
So far, officials in Alaska, Maine, Georgia and U.S GulfCoast states other than Florida have said they were open toexpanding drilling. California and other states have said theywould deny needed permits for onshore services or transport.
"You can't bring energy ashore unless you have access tostate waters," Zinke said.
While oil companies say they have met with Interiorofficials on Gulf of Mexico access to new regions, Zinke saidthey must go through the official comment process.
"They know my position: we put everything on and will goline by line," he said.
While Washington continues to discuss the opening withstates, oil companies are turning to well-mapped basins in thedeepwater Gulf of Mexico and other nations were deepwaterdrilling or auctions are ongoing, like Brazil, Mexico andGuyana.
"We are constantly scouring the planet to really understandresource potential," said Steve Pastor, BHP Billiton'spresident of petroleum operations. The Gulf of Mexico has someof the best discovered potential, he said.
BHP has previously explored acreage in the Eastern Gulf ofMexico, at its Sake project, in a formation off the coast ofAlabama.
Proposed new lease areas along the U.S. Atlantic coast wouldrequire seismic mapping and development of infrastructure thatwould take time. "I can't put a fine point on whether we wouldpursue it," Pastor said.
Chevron Corp, which disclosed a large Gulf of Mexicooil discovery in existing lease areas earlier this year, saidnew areas will have to stack up against existing projects.
They "will have to compete with the other drilling we havein the world," said Robert Ryan, Chevron's vice president ofglobal exploration. "We just don't know, most of those areashaven't been evaluated yet."
Royal Dutch Shell, which is active in federalwaters in the Gulf of Mexico, said it was encouraged by theadditional Gulf acreage that is opening under existing leasesales. Costs, including a recent 25 percent tariff on importedsteel, would be an issue.
"We know what we like here," said Wael Sawan, Shell'sexecutive vice president of deepwater. "We're encouraged by someof the elements but then some things like steel tariffs raise aquestion mark," he said.(Reporting By Jessica Resnick-Ault, additional reporting by RonBoussoEditing by Gary McWilliams and David Gregorio)
