MMS ENVIRONMENTAL STUDIES PROGRAM:  ONGOING STUDIES

MMS OCS Region:

Gulf of Mexico

Title:

An Assessment of the Opportunities for Alternative Uses of the Hydrocarbon Infrastructure in the Gulf of Mexico (GM-92-42-123)

Planning Area:

Gulfwide

Total Cost:  $185,000

Period of Performance:  FY 2005 - 2008 

Conducting Organization:

Coastal Marine Institute, Louisiana State University

MMS Contact:

Description:

Background:  The Outer Continental Shelf (OCS) of the Gulf of Mexico (GOM) contains the highest density of oil and gas infrastructure in the world, and its use could prove beneficial in expediting the development of a regional offshore wind, mariculture, and carbon sequestration industry. Both the private and public sectors are currently exploring new ways to utilize the oil and gas infrastructure in the GOM. High energy prices, technological improvements, and regulatory momentum make the prospects for alternative uses of GOM infrastructure more promising than at any time in the past 20 years. The MMS is considered to be the primary candidate for the lead permitting agency to oversee energy and non-energy related uses of OCS facilities. Several key and interrelated questions remain to be answered about the opportunities for alternative uses of hydrocarbon infrastructure. For example, (1) Can offshore systems be developed and operated in a cost-effective manner?, (2) How should these industries be regulated and supported?, (3) Can the Louisiana and Texas Artificial Reef Programs serve as a useful regulatory model?, (4) What market and investment conditions will stimulate offshore commercial development?, (5) What are the potential social and economic effects of alternative use opportunities in the GOM?, and (6) What is the track record of commercial applications?

Objectives:  This project is to examine four (4) alternative uses of offshore structures in the GOMR: artificial reefs, wind power, mariculture, and geologic sequestration/enhanced recovery. It will also consolidate, review, and synthesize the economic, environmental, political, technical, socioeconomic and regulatory issues that frame each alternative. More specifically, the study will include the following tasks: (1) the legal framework governing the development and regulation of alternative OCS projects will be reviewed, (2) the Louisiana and Texas Artificial Reef Programs will be reviewed, (3) a literature review of offshore wind, mariculture, and geologic sequestration will be conducted and synthesized, (4) the challenges, opportunities, and risks of deployment of each alternative will be described and evaluated, and (5) business and general cost-benefit models will be developed for each alternative to illustrate the decision and economic processes involved.

Methods:  This project will use both primary and secondary data; basic economic, regression, and statistical modeling techniques; and extensive review and synthesis of the literature on the economic, environmental, regulatory, and technical aspects of each alternative, and site visits when necessary.

Products:  Annotated bibliographies and a final report.

Importance to MMS:  MMS is considered to be the primary permitting agency to oversee energy and non-energy related uses of OCS facilities. This project will provide a single source of current information on the economic and policy implications of each alternative use. It will also serve as a general economic and decision-making guide that will be useful for both planning and policymaking.

Current Status:  The Principal Investigator (PI) has examined the Texas and Louisiana Artificial Reef Programs, including the regulatory framework, cost savings, operator involvement and general statistics associated with each program. The PI initiated research on a new topic, outside the scope of this proposal, concerned with the impact of the 2005 hurricane season on the Louisiana Artificial Reef Program. The PI will include this "topic of opportunity" with this study because it provides useful information on how Louisiana’s reef program was used to minimize the impact of destroyed infrastructure on state resources. A literature survey on offshore wind and mariculture is nearing completion. The study will not examine geologic sequestration as a potential alternative use for offshore structures. This is to maintain focus on the options that are most feasible and realistic. The PI has reviewed state and federal leasing for wind projects offshore Texas, New York, and Massachusetts and may examine the financial and economic aspects of lease design if time permits. The review of the environmental and regulatory aspects of offshore wind and mariculture applications in the OCS is in development, and a comparison between offshore wind and hydrocarbon extraction will form part of the offshore wind chapter. The financial economics of mariculture scenarios is on-going. The PI anticipates requesting an extension for the project.

Final Report Due:

Publications:

Affiliated WWW Sites:

Revised date:

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