Request for Comments on the Preparation of a New 5-Year Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2002-2007; and Notice of Intent To Prepare an Environmental Impact Statement for the Proposed 5-Year Program

SUMMARY:

Section 18 of the OCS Lands Act (43 USC 1344) requires the Department of the Interior to solicit information from interested and affected parties during the preparation of a 5-year OCS oil and gas leasing program. The current 5-year program covers the period July 1997 to July 2002. The Minerals Management Service (MMS) intends to prepare a new 5-year program for 2002-2007 to succeed the current one.

The MMS is starting the program preparation process at this time because section 18 requires completion of a lengthy, multi-step process of consultation and analysis before the Secretary of the Interior may approve a new 5-year program. The section 18 process includes the following required steps: this solicitation of comments; development of a draft proposed program, a proposed program, and a proposed final program; and Secretarial approval. The MMS also will prepare an Environmental Impact Statement (EIS) that analyzes the alternatives considered for the new 5-year program. This notice announces the start of the EIS preparation process. The MMS will consider comments received in response to this notice in developing the draft proposed program and in determining the scope of the EIS.

DATES:

The MMS must receive all comments and information by February 1, 2001.

ADDRESSES:

Mail comments and information to: 5-Year Program Manager, Minerals Management Service (MS-4400), Room 2324, 381 Elden Street, Herndon, Virginia 20170. The MMS will accept hand deliveries at 1849 C Street, N.W., Room 4230, Washington, D.C. Please label your comments and the packaging in which they are submitted as to subject matter: mark those pertaining to program preparation, “Comments on Preparation of the 5-Year Program for 2002-2007; and mark those pertaining to EIS preparation, “Scoping Comments on the EIS for the 5-Year Program for 2002-2007.” If you submit any privileged or proprietary information to be treated as confidential, please mark the envelope, “Contains Confidential Information.”

The MMS will accept comments submitted by electronic mail. Send your comments on the preparation of the program to MMS5-year.document@mms.gov and your comments concerning the scope of the EIS to MMS5-year.eis@mms.gov. We also will provide access to information concerning the 5-year program and EIS, including copies of comments we receive in response to this notice, at the MMS internet website (www.mms.gov).

Public Comment Procedure

Our practice is to make comments, including the names and home addresses of respondents, available for public review. An individual commenter may ask that we withhold his or her name, home address, or both from the public record, and we will honor such a request to the extent allowable by law. If you submit comments and wish us to withhold such information, you must state so prominently at the beginning of your submission.

We will not consider anonymous comments, and we will make available for inspection in their entirety all comments submitted by organizations and businesses or by individuals identifying themselves as representatives of organizations and businesses.

FOR FURTHER INFORMATION CONTACT:

Ralph Ainger, 5-Year Program Manager, at (703) 787-1215.

SUPPLEMENTARY INFORMATION:

The MMS requests comments from states, local governments, American Indian and Native Alaskan organizations, the oil and gas industry, federal agencies, environmental and other interest organizations, and other parties to assist in the preparation of a 5-year OCS oil and gas leasing program for 2002-2007 and applicable EIS. The 5-year program enables the federal government, states, industry, and other interested parties to plan for steps proposed to lead to OCS oil and gas lease sales. The Department will make a decision on whether to proceed with a specific sale on the schedule only after meeting all of the applicable requirements of the OCS Lands Act, the National Environmental Policy Act (NEPA), and other statutes.

The program preparation process will follow all the procedural steps required by section 18 of the OCS Lands Act. This notice solicits comments early in the preparation process pursuant to section 18(c)(1). The MMS will prepare a draft proposed program based on consideration of the comments we receive and analysis of the principles and factors specified in section 18. The draft proposed program will present for review and comment a preliminary schedule of lease sales indicating the size, timing, and location of OCS leasing proposed for 2002-2007, as well as provisions for assuring receipt of fair market value for leases.

OCS Planning Areas To Be Considered and Analyzed

The OCS consists of 26 planning areas for purposes of administering the 5-year program and related OCS oil and gas activities. Figures 1 and 2 depict the 26 OCS planning areas. Note that precise marine boundaries between the United States and nearby or adjacent nations have not been determined in all cases. The depicted maritime boundaries and limits, as well as divisions between planning areas, where shown, are for planning purposes only. These limits shall not affect or prejudice in any manner the position of the United States with respect to the nature or extent of the internal waters or of sovereign rights or jurisdiction for any purpose whatsoever.

In 1998, acting under the authority of section 12 of the OCS Lands Act (43 USC 1341), the President withdrew the following planning areas from disposition by leasing through June 30, 2012: North Aleutian Basin; Washington-Oregon; Northern, Central, and Southern California; Eastern Gulf of Mexico, except the Sale 181 area located off Alabama and more than 100 miles off Florida; and South, Mid, and North Atlantic. The President also withdrew indefinitely all National Marine Sanctuaries, which are located in the following planning areas: Washington-Oregon (Olympic Coast); Central California (Cordell Bank, Gulf of the Farallones, and Monterey Bay), Southern California (Channel Islands), Western Gulf of Mexico (Flower Garden Banks); Straits of Florida (Florida Keys); South Atlantic (Gray's Reef); Mid-Atlantic (Monitor); and North Atlantic (Stellwagon Bank). None of the areas withdrawn under section 12 will be available for leasing during the timeframe of the next 5-year program.

Section 18 requires the Secretary of the Interior to begin the 5-year program preparation process by soliciting information pertaining to all of the areas of the OCS that have not been withdrawn (i.e., the portions of the OCS not listed above). We will consider information we receive concerning the available areas in light of the criteria specified in section 18, which are discussed below. If the Secretary decides not to propose leasing in an area in the draft proposed program, further analysis of that area under section 18 will not be necessary.

Types of Information Requested

The MMS invites comments from anyone who would like to submit information for us to consider in determining the appropriate size, timing, and location of OCS leasing for the 5-year period July 2002 to July 2007. The types of information we seek are described below using general and specific headings. Regardless of these headings, all respondents are welcome to comment on any aspect of program preparation and to submit any type of pertinent information.

General

The MMS would like to receive comments and suggestions of nationwide application that would be useful in formulating the new 5-year program. The types of information that would be most useful to us in conducting the section 18 analysis relate to the following factors:

(1) National energy needs for the period relevant to the new program (in particular for this program, the role of OCS leasing in achieving national energy policy goals, including its potential for contributing to increased domestic natural gas supplies, as addressed further below); the economic, social, and environmental values of the renewable and nonrenewable resources contained in the OCS; and the potential impact of oil and gas exploration on other resource values of the OCS and the marine, coastal, and human environments;

(2) Geographical, geological, and ecological characteristics of the planning areas of the OCS and nearshore environments;

(3) Equitable sharing of developmental benefits and environmental risks among the various planning areas;

(4) Location of planning areas with respect to, and the relative needs of, regional and national energy markets;

(5) Other uses of the sea and seabed, including fisheries, navigation, existing or proposed sealanes, potential sites of deepwater ports, and other anticipated uses of OCS resources and locations;

(6) Relative environmental sensitivity and marine productivity of the different planning areas of the OCS;

(7) Environmental and predictive information pertaining to offshore and coastal areas potentially affected by OCS development (including socio-cultural and archaeological information); and

(8) Methods and procedures for assuring the receipt of fair market value for lands leased.

The MMS also invites you to respond to the following questions:

(i) Since the national energy picture concerning “needs” as mentioned above has been volatile, how should the 5-year program for 2002-2007 be structured to meet those needs? What do you think is the proper role of the OCS in national energy policy?

(ii) Since recent studies have projected shortfalls in meeting energy needs such as for home heating oil, and especially natural gas, how should such needs be balanced with the laws, goals, and policies influencing the management of the OCS? Specifically, since concerns from affected states, such as those identified in studies conducted by the National Research Council, have led to past congressional and presidential actions to restrict many areas, how should long-term planning address the current situation?

(iii) Although OCS oil and gas leasing is typically conducted through an extensive, long-established process, are there alternative ways to ensure appropriate consultation and to streamline our procedures? How might we best meet the purpose of the OCS Lands Act “to insure that the extent of oil and gas resources of the Outer Continental Shelf is assessed at the earliest practicable time?”

Specific

Affected Coastal States

As specified in section 18(a)(2)(F), the MMS requests the governors of affected states to identify state laws, goals, and policies relevant to OCS oil and gas. We have sent to each of those governors a letter soliciting such information. Pursuant to section 18(f)(5) and implementing regulations at 30 CFR 256.20, we request information concerning the relationship between OCS oil and gas activity and the states' coastal management programs that are being developed or administered under the Coastal Zone Management Act. We also request the affected states to submit information concerning environmental risk and potential for damage to coastal and marine resources associated with development of the OCS, information related to other uses of the sea, and any information in your possession that is relevant to equitable sharing of developmental benefits and environmental risks associated with OCS oil and gas activity.

Oil and Gas Industry

As specified in section 18(a)(2)(E), the MMS requests oil and gas industry respondents to provide information indicating your interest in the opportunity to lease and develop additional OCS oil and gas resources. You should base this information on your expectations as of 2002. For each area in which your company is interested, please submit information concerning unleased hydrocarbon potential, future oil and gas price expectations, and other relevant information that your company uses in making OCS oil and gas leasing decisions. The MMS also requests industry commenters to provide additional information as specified below (on request such information will be treated confidentially as explained further below).

(1) Indicate the OCS planning area(s) where your company would be interested in acquiring oil and gas leases during the period 2002-2007. If you indicate more than one planning area, rank the areas in order of preference.

(2) Indicate the number and timing of lease sales in the period 2002-2007 that you believe would be appropriate for each planning area. If you suggest only one sale in a planning area, indicate whether that area should be considered for leasing early or late in the 5-year program schedule. If you suggest more than one lease sale in a planning area, indicate the preferred interval between sales.

Regarding the scope and timing of lease sales, the MMS would be especially interested in hearing innovative ideas for the Central and Western Gulf of Mexico Planning Areas, which have been subject to a long-running policy of annual areawide leasing. For example, we would like to know if commenters think it would be advantageous to offer blocks located in shallower waters on the shelf and those in deep water separately and at different intervals.

We also seek input from all respondents on ways that the leasing program can be designed to promote increased production of natural gas from the OCS. Natural gas is widely recognized to be the environmentally preferred fossil fuel and now accounts for about 25 percent of the nation's fuel needs. It is expected to remain a critical component of our Nation's energy needs well into the 21st century. The Energy Information Administration, National Petroleum Council, Gas Research Institute, and others forecast significant increases in future domestic gas demand—from about 22 trillion cubic feet (TCF) to as much as 29 TCF by 2010 and 31 TCF or more by 2015. Much of the increased production that will be needed is expected to come from the Rocky Mountain onshore region and from the Gulf of Mexico OCS, from deeper wells, deeper water, and nonconventional sources.

Currently, natural gas production from federal waters of the Gulf of Mexico contributes about 5.1 TCF annually (or about 23 percent) to domestic gas supplies. Given projected growth in domestic natural gas consumption, annual production from the OCS would need to increase significantly—from 5 TCF now to about 7 to 8 TCF or more within the next 15 years—to sustain its same contribution to domestic gas supplies. Although oil and natural gas production from the deep waters of the Gulf of Mexico is increasing, annual gas production from the shallower waters has been declining.

As recommended in a December 1999 National Petroleum Council report on natural gas, an Interagency Work Group on Natural Gas has been established to take a lead role in developing a natural gas strategy and resolving issues associated with future natural gas needs. Consistent with the MMS' participation in that work group, and with an OCS Policy Committee resolution calling for consideration of rising natural gas demand, we are examining new ways to increase OCS natural gas production in the Gulf of Mexico in an environmentally responsible manner. For example, we are currently looking at possible incentives that could be employed on a sale specific basis to foster and accelerate exploration for and production of natural gas both in the deep water and gas-prone areas of the continental shelf in the Gulf of Mexico. Some incentives, such as deepwater royalty relief, are expected to encourage increased development over the long term, but other incentives to help bring on new production sooner and meet near-term national increases in demand for natural gas are also needed.

Section 18(g) authorizes confidential treatment of privileged or proprietary information. In order to protect the confidentiality of privileged or proprietary information, include such information as an attachment to other comments submitted. On request the MMS will treat as confidential from the time of its receipt until 5 years after approval of the next leasing program the privileged or proprietary information that is attached to a response, subject to the standards of the Freedom of Information Act. However, the MMS will not treat as confidential any aggregate summaries of such information, the names of respondents, or comments not containing such information. As noted above, you should place the label “Contains Confidential Information” on any envelope containing privileged or proprietary information that you wish to be treated as confidential.

Department of Commerce

Pursuant to section 18(f)(5) and implementing regulations at 30 CFR 256.20, the MMS requests information concerning relationships between affected states' coastal zone management programs and OCS oil and gas activities. We have sent a letter to the Secretary of Commerce soliciting such information.

Department of Energy

Pursuant to implementing regulations at 30 CFR 256.16, the MMS requests information concerning regional and national energy markets, OCS production goals, and oil and gas transportation networks. We have sent a letter to the Secretary of Energy soliciting such information.

EIS Preparation

Pursuant to section 102(2)(C) of NEPA, the MMS intends to prepare an EIS for the new 5-year OCS oil and gas leasing program for 2002-2007. This notice starts the scoping process for the EIS under 40 CFR 1501.7 and solicits information regarding issues and alternatives that should be evaluated in the EIS. The EIS will address the potential impacts of the adoption of the proposed 5-year program. The MMS requests respondents to focus your comments on the significant environmental issues attendant to OCS oil and gas leasing and development and on alternative options for the size, timing and location of sales that should be evaluated in the EIS. Please label and submit your comments as indicated above. We will consider all comments we receive, regardless of how they are labeled, for the purpose of determining the scope of the EIS we plan to prepare. The individual knowledgeable about preparation of the EIS is Richard Wildermann, telephone (703) 787-1670.