Frequently
Asked Questions: Request for Interest
Proposed New 5-Year Outer Continental
Shelf
Oil and Gas Leasing Program
July 30, 2008
Q: Why is MMS
doing another 5-year program now?
A: In light of the
current energy situation and President Bush’s lifting of the
Presidential Withdrawal, the Secretary of the Interior directed MMS to
begin the initial steps for developing a new five-year program. We
are, in effect, getting a two-year jumpstart on that process. It is
still a multi-step, and multi-year process to develop a five-year
program.
The current five-year
program took effect on July 1, 2007 at a time when oil was only $64 a
barrel and does not contain many of the areas that were under
withdrawal and remain under Congressional ban. Should the
Congressional ban be lifted, a new program would have to be developed
to make those areas available.
Q: With this new
program, will you be able to lease new areas that were under
Presidential withdrawal?
A: This action begins a process that will
open discussions about expanding our domestic energy production. If
Congress acts by removing their ban, then new areas could become
available, but only after a lengthy process involving active public
input and strong safety and environmental protections.
Q: Did Congress
lift their ban?
A:
They have not. Current
moratoria
for the Atlantic, Pacific coasts and a small portion of the Eastern
Gulf of Mexico are established through the annual appropriations
process. However, most of the Eastern Gulf of Mexico was placed under
a different statutory ban that is set to remain until 2022. Congress
would have to either delete or modify language in upcoming
appropriations bills or enact specific legislation to make those areas
available.
Q: What happens
if the new administration doesn’t want the new 5-year program? Will
they have an opportunity to change it?
A: The next administration will have
every opportunity to take advantage of today's action. Decisions to
continue or stop this process will be theirs.
Q: Are you going
to open up the entire OCS or just certain sections?
A: This action is designed to encourage
discussions about the OCS areas of greatest interest, with the
greatest potential. New areas will not be available for leasing until
the 5-Year Program is complete, having incorporated multiple rounds of
public comment and Congressional approval.
Q: How much oil
do you really think is out there?
A: The Minerals
Management Service estimates about 17.84 billion barrels of oil and
76.47 trillion cubic feet of natural gas to be technically recoverable
in the areas currently off limits. Those numbers are very
conservative as little exploration has been conducted in most of those
areas during the past 20-30 years. Our estimates are based on the
available data. We have seen, though, that the numbers tend to
increase dramatically as technology improves and exploration
activities occur.
Q: What are the
steps
in the 5-year leasing process?
A: The process
currently used by the Minerals Management Service includes three
separate public comment periods, two separate draft proposals,
development of an environmental impact statement, and the final
proposal. It culminates in a decision by the Secretary of the
Interior on a new 5-year program. Additionally, there is an “annual
review” step for the years when a 5-year program is in place and a new
one is not yet being developed.
Q: Who may
provide comments during this first step?
A: The Minerals
Management Service welcomes comments from all interested and affected
parties, including individuals, organizations, and government
entities.
Q: What type of
information is MMS seeking?
A: The Minerals
Management Service (MMS) would like to receive all comments and
suggestions of national or regional application that would be useful
in formulating the offshore oil and gas leasing program. Specific
categories of comments that MMS feels would be particularly useful can
be found on the MMS web site at
www.mms.gov.
Q: Which areas
are considered to be under the congressional ban?
A: The congressional
ban currently encompasses all of the Outer Continental Shelf located
along the west coast, east coast, most of the Eastern Gulf of Mexico
Planning Area, and a portion of the Central Gulf of Mexico Planning
Area.
Q: How much
energy does the Outer Continental Shelf provide our nation?
A: The Outer
Continental Shelf currently provides about 27% of domestic oil
production and about 15% of domestic natural gas production.
Q: Will this
shorten, or eliminate the requirement for the environmental reviews
since MMS just went through that process last year?
A: A new program
will require additional environmental reviews in compliance with the
National Environmental Policy Act as well as numerous other
environmental laws affecting OCS exploration and development.
Q: How will the
new program affect the current program?
A: If implemented,
the new program will replace and supersede the portion of the current
program remaining after the effective date of the new program.
Currently scheduled sales for mid-2010 to mid-2012 would likely be
included in any new program.
Q: What is MMS
doing to make companies produce on the leases they already have?
A: MMS encourages
due diligence by establishing primary terms of leases that allow only
the minimum length of time a company should need to explore a lease.
At the end of the primary term, the lease must produce in paying
quantities or the operator must conduct continuous operations in order
to keep the lease in effect unless MMS grants an extension. If an
extension is granted, the MMS monitors activity closely and ensures
that approved milestones are met in a timely fashion.
Q: Will MMS
prepare an Environmental Impact Statement (EIS) as part of the process
to develop a new 5-Year program?
A: Yes. If the
decision is made to prepare a new 5-Year program, MMS will publish a
Notice of Intent (NOI) announcing its decision to prepare an EIS in
accordance with the National Environmental Policy Act (NEPA). The NOI
will also announce the public scoping process. Throughout the scoping
process, Federal, state, and local government agencies and other
interested parties will have the opportunity to aid MMS in determining
the significant issues and alternatives for analysis in the EIS. The
public will have an additional opportunity to comment on the Draft
EIS. All comments received on the Draft EIS will be addressed in the
Final EIS. Subsequent NEPA documents may be prepared with additional
comment periods.
Q: MMS has an extensive regulatory
program and daily inspections; can you describe this a bit more?
A: The oil industry
cannot just begin operations once they obtain a lease. Many
regulatory approvals are required. A company must file an exploration
plan before drilling any wells and that is subject to a technical and
environmental review by MMS. Once a discovery is made the company has
to file a development plan for MMS to again conduct a technical and
environmental review before production could begin. For major
facilities, MMS conducts an onsite inspection before allowing
production to begin. Often this is a joint inspection with the US
Coast Guard. Air emissions permits and water discharge permits must
also be obtained from the EPA. MMS has over 60 inspectors that daily
fly offshore to conduct safety and environmental inspections. |