astern Gulf of
Mexico Overview
The Eastern Gulf of Mexico
Planning Area extends along the Gulfs northeastern coast for some 1,120
kilometers (700 miles), from Baldwin County, Alabama, southward to the Florida Keys. The
area encompasses approximately 76 million acres, with water depths ranging from tens of
meters to over 3,000 meters (9,900 feet). Seaward of the State/Federal boundary (3 leagues
or roughly 9 miles off the Florida coast) the area extends southward for more than 480
kilometers (300 miles). Since the late 1980's, a limited amount of OCS activity has taken
place in this planning area because of administrative deferrals and annual congressional
moratoria. In 2000, MMS estimated that between
6.95 and 9.22 trillion cubic feet of natural gas
and 1.57 and 2.78 billion barrels of oil and condensate are contained in the Eastern Gulf of
Mexico Planning Area.
Drilling for natural gas and oil has been occurring in the Eastern Gulf of Mexico
offshore Alabama and Florida for more than three decades (See
Eastern Gulf of Mexico Milestones). The first of 13 natural gas and oil lease sales held offshore Florida occurred in 1959 and
resulted in the issuance of 23 leases. Currently, there are
241 active leases in the Eastern Gulf of
Mexico Planning Area.
To date, over 81 exploratory wells (see Map) have been drilled in the Eastern Gulf of Mexico. Thirteen
wells discovered natural gas, condensate, and crude oil (see discoveries).
Exploratory drilling started in the Eastern Gulf of Mexico in the mid-1970's with the
drilling of Destin Dome Block 162, located 64 kilometers (40 miles) south of Panama City,
Florida. After two
years of drilling and 15 dry holes, exploration ground to a halt. The 1980's ushered in
three Eastern Gulf lease sales and renewed industry interest in this area. Finally, in the
late 1980's, Chevron U.S.A. and Gulfstar made natural gas discoveries in the area.
In October 1995, 73 oil and gas leases located south of 26° N. latitude were returned
to the Federal Government as part of a litigation settlement. Consequently, no active
Federal natural gas and oil leases exist off southwest Florida. Likewise, no active leases
exist in the Straits of Florida Planning Area or off Floridas east coast (South
Atlantic Planning Area).
In the latter part of 1996, a development plan was filed by
Chevron U.S.A. and partners on the Destin Dome 56 Unit (see Activities Offshore Florida).
On July 24, 2000, Chevron U.S.A. and partners filed a
lawsuit against the U.S. government for denying the companies "timely and
fair review" of plans and permits, and an appeal concerned with its Destin
Dome 56 Unit (for more, see Activities Offshore
Florida and agreement).
Unocal (Spirit Energy) began the first production in the Eastern Gulf Planning Area in
mid-February 1999 on Pensacola Block 881.
Located approximately 12 miles offshore Alabama, this site involves the production of
some 5 million cubic feet of natural gas
per day.
In October 1999, Gulfstream Natural Gas Systems (ANR) and Buccaneer Gas Pipeline
Company (Transco/Williams) submitted pipeline right-of-way applications to the MMS for the
construction of two 400-mile (36-inch) natural gas pipelines spanning the Eastern Gulf of
Mexico (see Activities Offshore Florida). The
Gulfstream right-of-way was approved by MMS on June 1, 2001.
This line went into service in June 2002.
In November 1996, the Secretary of the Interior released the Outer Continental Shelf
Oil and Gas Leasing Program (1997-2002). The program included 16 lease sales, with one
sale (see Eastern Gulf of Mexico Sale 181 Information)
proposed for the Eastern Gulf of Mexico in 2001. The original
sale area was carefully
reviewed to be consistent with the State of Floridas opposition to offshore oil and
gas activities within 100 miles of its coast and responded to concerns raised by the
Governor of Alabama. The first steps in the 3-year planning process began on January
25, 1999, with the release of the Call for Interest and Information and the Notice of
Intent to Prepare an Environmental Impact Statement (see
Call/NOI). A draft environmental
impact statement was released in December 2000 and a final EIS
was made available to the public in July 2001.
On July 2, 2001, Interior Secretary Gale Norton announced
that Sale 181 would be adjusted from 5.9 million acres to about 1.5 million
acres or 256 blocks. The adjusted area lies more than 100 miles off the
Alabama/Florida State line. Twenty-three blocks in this area were under
lease at that time. Lease Sale 181 was held on December 5, 2001. MMS
awarded leases on 95 tracts involving $340,474,113. Seventeen companies
participated in this sale.
AES Ocean Express LLC (February 2002) and Tractebel
Calypso LLC have proposed to transport natural gas from the Bahamas to South
Florida and building an LNG terminal in the Bahamas. These projects have
been approved.
In July 2002, Interior Secretary Gale Norton announced
approval of the 2002-2007 OCS 5-year oil and gas leasing program. Two
Sales are scheduled for the Eastern Gulf of Mexico in 2003 (Sale 189) and 2005
(Sale 197).
On May 29, 2002, Interior Secretary Gale Norton announced
that the Department had agreed in principle to settle litigation with oil
companies that own interests in the Destin Dome Unit. The companies --
Chevron, Conoco and Murphy Oil -- will relinquish seven of nine leases in the unit
that were the subject of the litigation in exchange for $115 million. The
remaining two leases, Destin Dome Blocks 56 and 57, are to be held by Murphy and
will be suspended until at least 2012, under the terms of the agreement.
Murphy agreed not to submit a development plan on the two remaining leases
before 2012, the year when the current moratoria will expire. Under the
terms of the agreement, the leases can not be developed unless approved by both
the Federal Government and the State of Florida.
On December 10, 2003, Eastern Gulf of Mexico Sale 189 was
held, attracting $8.4 million in high bids on 14 tracts. Six companies
participated in the lease sale that offered 138 blocks comprising approximately
794,880 acres offshore Alabama. The highest bid received was $2.2
million, submitted by Shell and Nexen.
Five independent exploration and production companies and
one energy company have come together to develop multiple ultra-deepwater
natural gas discoveries located in the Central and Eastern Gulf of Mexico.
The Independence Hub will be located on unleased Mississippi
Canyon Block 920, in a water depth of 8,000 feet. First production is
expected in 2007. The Independence Hub development will include
dedicated anchor gas fields, Atlas and Atlas NW (Lloyd Ridge Blocks 5, 49,
&50),
Jubilee (Atwater Valley Blocks 305 &349 and Lloyd Ridge Blocks 265 & 309),
Merganser (Atwater Valley Blocks 36 &37), San Jacinto (DeSoto
Canyon Blocks 618 &619), Spiderman (DeSoto Canyon Blocks 620 &621) and
Vortex (Atwater Valley Blocks 217 & 261 and Lloyd Ridge Blocks 177 & 221), in
addition to future discoveries on surrounding undeveloped blocks. The
fields will be tied-back to the platform through producer-owned subsea flowline
systems. The fields' water depths range from 7,800 to 9,000 feet.
General Facts:
Once a company acquires a lease, the company has to prepare an exploration plan and
have it approved by MMS and other Federal and State Agencies in order to drill a well.
Typical exploration plans propose the drilling of one or more exploratory wells. The MMS
conducts an environmental review of the impacts of drilling the well. Should a discovery
be made, the company may then prepare and file a development plan.
The exploration
and development plans must be consistent with the affected States Coastal Zone
Management Plan (see Consistency).
During exploratory drilling or production operations on the OCS, the MMS
inspection program calls for MMS inspectors to review operations
and periodically visit and inspect facilities in detail to ensure clean and
environmentally safe operations.
To prepare for lease sales and to protect the environment during offshore drilling
operations, MMS conducts environmental studies. Several new studies are planned
and/or currently underway (see Environmental Studies Offshore
Florida).
In addition to having authority to oversee natural gas and oil activities on the
Federal OCS, the MMS also has the authority to sell sand and gravel from the OCS and,
under a new law (P.L. 103-426), enter into negotiated agreements. To date, MMS has entered
into a negotiated agreement with the City of Jacksonville, Florida, for the removal of
1.24 million cubic yards of sand (see Press Releases). The
MMS also has contracts and cooperative agreements for environmental studies on dredging
operations resulting from beach renourishment projects (see Benthic
Repopulation Studies). The MMS has also entered into a cooperative
agreement with the Florida Geological Survey to study potential sand resources (for
beach renourishment) from the OCS. The initial study involved offshore areas along
Brevard, Indian River, Martin, and St. Lucie counties out to approximately 10 miles. Loss
of sand from Florida beaches is a serious problem affecting the coastal environment and
the States economy, and previously identified sand sources are nearing depletion.
For more information about MMS activities in the Eastern Gulf of Mexico, contact the
MMS Gulf Region Public Affairs
Office at (504) 736-2595.
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