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Offshore Oil and Gas

What is offshore?

Image of a coastline
image of coastline from above

Source: Stock photography (copyrighted)

Map showing Exclusive Economic Zone around the United States and Territories
Map showing Exclusive Economic Zone around United States and territories.
Click to enlarge »

Source: National Energy Education Development Project (public domain)

Diagram of shore and ocean overlaid with territorial sea, Exclusive Economic Zone, the Continental Shelf, and Continental Slope
diagram of land and ocean overlayed with 3 miles of territorial sea, 200 miles of Exclusive Economic Zone, the Continental Shelf, and Continetal Slope.
Click to enlarge »

Source: National Energy Education Development Project (public domain)

The coastlines of the United States are not the actual borders of the United States. The U.S. border is actually 200 miles away from the coastline. This area around the country is called the Exclusive Economic Zone (EEZ).

In 1983, President Ronald Reagan claimed the EEZ in the name of the United States. In 1994, all countries were granted an EEZ of 200 miles from their coastlines under the International Law of the Sea.

The ocean floor extends from the coast into the ocean on a continental shelf that gradually descends to a sharp drop, called the continental slope. The width of the U.S. continental shelf varies from 10 miles to 250 miles (16 kilometers to 400 kilometers). The water on the continental shelf is relatively shallow, rarely more than 500 feet to 650 feet (150 meters to 200 meters) deep.

The continental shelf drops off at the continental slope, ending in abyssal plains that are 2 miles to 3 miles (3 kilometers to 5 kilometers) below sea level. Many of the plains are flat, while others have jagged mountain ridges, deep canyons, and valleys. The tops of some of these mountain ridges form islands where they extend above the water.

Several federal government agencies manage the natural resources in the EEZ. The U.S. Department of the Interior's Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement manage the development of offshore energy resources by private companies that lease areas for energy development from the federal government. These companies pay royalties to the government on the energy resources they produce from the leased areas in the ocean. Most states control the 3-mile area that extends off of their coasts, but Florida, Texas, and some other states control the waters for as much as 9 miles to 12 miles off of their coasts.

Most of the energy the United States gets from the ocean is oil and natural gas from wells drilled on the ocean floor. Other energy sources are under development offshore. America’s first offshore wind energy project, the Block Island Wind Farm off the coast of Rhode Island, became operational in December 2016. Other wind energy projects are under consideration in several other areas off the Atlantic coast. Wave energy, tidal energy, ocean thermal energy conversion, and methane hydrates are other energy sources currently under development or exploration.

Last updated: August 28, 2018

Offshore drilling

Map of U.S. oil and natural gas fields showing onshore and offshore fields. Source: National Energy Education Development Project

Source: National Energy Education Development Project (public domain)

Offshore oil rig
offshore oil rig

Source: Stock photography (copyrighted)

The border of the United States extends 200 miles beyond the coastline. The ocean area between the border and the coast is called the Exclusive Economic Zone (EEZ) and includes areas administered by state governments and the federal government. Thirty basins in the U.S. EEZ have been identified as containing oil and natural gas reserves.

The first offshore oil well was drilled in 1897 at the end of a wharf, 300 feet off the coast of Summerland, California. Early offshore drilling was in areas where the water was less than 300 feet deep. Oil and natural gas drilling rigs now operate in water as deep as two miles. Offshore oil and natural gas production is much more expensive than onshore (land-based) production.

Offshore oil and natural gas wells are drilled from platforms that hold all of the drilling equipment, storage areas, and housing for work crews. Some drilling platforms stand on stilt-like legs that are embedded in the ocean floor. Floating platforms are used for drilling in deeper waters, including water depths of 10,000 feet or greater. These self-propelled vessels are attached to the ocean floor by large cables and anchors. After wells have been drilled from these platforms, production equipment is lowered to the ocean floor.

Offshore oil and natural gas producers are required to take precautions to prevent pollution, spills, and significant changes to the ocean environment. Offshore rigs are designed to withstand hurricanes. When offshore oil and natural gas wells are no longer productive enough to be economical, they are sealed and abandoned according to applicable regulations.

Nearly all offshore oil and natural gas leasing and development activity currently occurs in the central and western Gulf of Mexico, where thousands of platforms operate in waters up to 6,000 feet deep. A few platforms operate in depths of 10,000 feet or more. In 2017, offshore oil and natural gas production in the Federal Gulf of Mexico accounted for about 18% of total U.S. crude oil production and about 3.6% of total U.S. dry natural gas production.

Last updated: January 16, 2019