MMS proposes 5-year OCS leasing program

The Interior Department's Minerals Management Service (MMS) released for comment a proposal in draft form that discusses MMS's 2007-2012 Outer Continental Shelf (OCS) leasing plan, which is currently in development.

Offshore staff

(US, GoM) - The Interior Department's Minerals Management Service (MMS) released for comment a proposal in draft form that discusses MMS's 2007-2012 Outer Continental Shelf (OCS) leasing plan, which is currently in development.

The comments will be reviewed by the MMS for refinement of the proposed program, which will then be released again for additional public input. This is the second of four steps taken with public involvement, to develop the OCS leasing plan.

"This is the step in the process where we put out our initial ideas for study and public comment," said MMS Director, Johnnie Burton. "With sharply higher energy prices buffeting both families and businesses, we want to be sure that we fully consider the environmentally sensitive development of the vast domestic oil and gas resources off our coasts."

As part of the draft leasing plan, MMS will study the potential for oil and gas development off the coast of Virginia and a previously undeveloped area in the North Aleutian Basin off the coast of Alaska. MMS is also considering realigning the boundaries of its Central Gulf of Mexico Planning Area to correspond with new Federal OCS offshore administrative areas announced in early January.

Under the contemplated revision, a portion of the "Sale 181" area offshore Louisiana, as well as a deepwater area to the south, would be included in the central planning area and could be considered for future oil and gas development.

Current presidential withdrawals or congressional moratoria have placed more than 85% of the OCS around the lower 48 states off limits to energy development, including all areas off Virginia. The Administration has indicated support for the moratorium, but will give great weight to the comments from adjacent coastal states.

"The idea of leasing federal waters off the coast of Virginia comes in response to discussion in the state's legislature about the potential of energy development off its coast," Burton said. "However, no offshore development will occur off Virginia unless the state's congressional delegation works to lift the moratorium."

"MMS must have a leasing plan in place if Virginia seeks to end the moratorium and encourage offshore oil and gas development," Burton said.

The North Aleutian Basin is also included in the proposed draft because the State of Alaska requested that the area undergo further analysis.

The Sale 181 area, which has significant potential oil and gas resources, is not under moratorium. Nevertheless, the MMS has no intention of offering for leasing areas within 100 mi off the Florida coast that was previously included in the Eastern Gulf Planning Area.

The proposed leasing would not interfere with military readiness or training or pose an environmental risk to Florida. No leasing would be proposed in the newly configured Eastern Gulf Planning Area.

Overall, the draft program proposes a total of 21 OCS lease sales in seven of the 26 OCS planning areas, some of which are also included in the current 5-year program for 2002-2007.

Concurrently, and as directed by Congress, an inventory of oil and gas resources on the OCS has been conducted. MMS estimates of undiscovered resources are 85.9 Bbbl of oil and 419.9 Tcf of natural gas that are technically recoverable from all federal offshore areas. The estimate for both oil and gas increased about 15% compared to the 2001 report.

"Technically recoverable" estimates represent the quantities of oil or gas that could be produced using existing or reasonably foreseeable technology. Current technologies include drilling in water depths exceeding 10,000 ft and subsea depths beyond 31,000 ft.

The inventory has been provided to Congress as part of the response required by the Energy Policy Act of 2005.

"The offshore energy industry has compiled an outstanding safety record that allows development of these resources without significant risk to the environment," Burton said, citing last year's hurricanes as evidence of the industry's ability to withstand even major hurricanes with no significant pollution from producing facilities.

"Two major hurricanes passed through the GoM last year without causing a single significant spill from OCS wells," she said. "Overall, roughly 150 times more oil seeps into US waters from natural cracks in the seabed than is spilled from oil and gas activities on the OCS."

The 2007-2012 OCS oil and gas leasing program will be the seventh prepared since Congress passed the OCS Lands Act in 1978, which requires the Secretary of the Interior to prepare and maintain five-year programs for offshore oil and natural gas leasing. The current program runs through June 30, 2007.

The request for comments on the draft proposed program and notice of intent to prepare an associated environmental impact statement was submitted for publication in the Federal Register yesterday.

The following is the schedule for the 2007-2012 five-year program:

* August 24, 2005 -- Solicit comments and information

* February 2006 -- Issue draft proposed program, solicit comments

* Summer 2006 -- Issue proposed program and draft EIS, solicit comments

* Winter 2007 -- Issue proposed final program and final EIS

* Spring 2007 -- Approve five-year program for July 2007-June 2012

02/09/06

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