06-7128. Request for Comments on the Proposed 5-Year Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2007-2012

AGENCY:

Minerals Management Service, Interior.

ACTION:

Request for Comments on the Proposed 5-Year OCS Oil and Gas Leasing Program for 2007-2012

SUMMARY:

The Minerals Management Service requests comments on the Proposed 5-Year OCS Oil and Gas Leasing Program for 2007-2012. This is the second draft of a new program to succeed the current program that expires on June 30, 2007. The first proposal—the draft proposed program—was issued in February for a 60-day comment period that closed on April 11, 2006.

Section 18 of the OCS Lands Act (43 U.S.C. 1344) specifies a multi-step process of consultation and analysis that must be completed before the Secretary of the Interior may approve a new 5-year program. The required steps following this notice include the development of a proposed final program and Secretarial approval. Pursuant to the National Environmental Policy Act (NEPA), the MMS also will publish a Final EIS for the new 5-year program.

DATES:

Please submit comments and information to the MMS no later than November 24, 2006.

Public Comment Procedure

The MMS will accept comments in one of two formats: by mail or our Internet commenting system. Please submit your comments using only one of these formats, and include full names and addresses. Comments submitted by other means may not be considered. 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.

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 so state prominently at the beginning of your submission.

ADDRESSES:

Mail comments and information to: Renee Orr, 5-Year Program Manager, Minerals Management Service (MS-4010), Room 3120, 381 Elden Street, Herndon, Virginia 20170. Please label your comments and the packaging in which they are submitted according to the subject matter. Mark those pertaining to program preparation, “Comments on Draft Proposed 5-Year Program for 2007-2012,” and mark those pertaining to EIS preparation, “Comments on the Draft EIS for the 5-Year Program for 2007-2012.” If you submit any privileged or proprietary information to be treated as confidential, please mark the envelope, “Contains Confidential Information.”

Internet: The MMS will accept comments submitted to our electronic commenting system. This system can be accessed at http://www.mms.gov/​5-year/​2007-2012main.htm. 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 Web site (http://www.mms.gov).

FOR FURTHER INFORMATION CONTACT:

Renee Orr, 5-Year Program Manager, at [phone].

SUPPLEMENTARY INFORMATION:

Section 18 of the OCS Lands Act (43 U.S.C. 1344) specifies a multi-step process of consultation and analysis that must be completed before the Secretary of the Interior may approve a new 5-year program. The required steps following this notice include the development of a proposed final program to be submitted to the Congress and the President, with Secretarial approval of a new program no sooner than 60 days afterward. Pursuant to the National Environmental Policy Act, the MMS also is preparing an Environmental Impact Statement (EIS) for the new 5-year program. The draft EIS is being issued with this proposed program and a final EIS will be issued with the proposed final program.

The MMS requests comments from states, local governments, native groups, tribes, the oil and gas industry, Federal agencies, environmental and other interest organizations, and all other interested parties, including the public to assist in the preparation of a 5-Year OCS oil and gas leasing program for 2007-2012 and applicable EIS.

The proposed program document may be downloaded off the MMS Web site at http://www.mms.gov. The document also is available as part of our electronic commenting system noted above. Hard copies will be made available by contacting the 5-Year Program Office at 703-787-1215.

Background

Section 18 of the OCS Lands Act requires the Secretary of the Interior to prepare and maintain a schedule of proposed OCS oil and gas lease sales determined to “best meet national energy needs for the 5-year period following its approval or reapproval.”

Summary of the Proposed Program

In developing the proposed program for 2007-2012, the MMS carries forward the same proposed schedule of lease sales as contained in the draft proposed program published in February 2006, with modifications in four areas as detailed below. Some of these areas are currently withdrawn from disposition by leasing through June 30, 2012, under section 12 of the OCS Lands Act (43 U.S.C. 1341) and have been subject to annual congressional moratoria.

There will be no leasing of such areas unless the Presidential withdrawal is modified and Congress discontinues the annual statutory moratoria. The comments received and the analyses conducted for this proposed program may provide the information necessary for a potential modification of the withdrawal areas. The areas identified as proposed program areas in this notice are ones that warrant further study and analysis based on oil and gas resource estimates and comments received in response to the draft proposed program published in February of this year. Continued inclusion of areas in the proposed lease sale schedule provides a basis for gathering information and conducting analyses to inform policy makers whether to include these areas for leasing consideration in the new 5-year program. The program proposes sales in offshore areas that have the highest oil and gas resource values and highest industry interest, or areas that are currently under leasing restrictions and are off the coasts of states that have expressed interest in learning more about the energy potential offshore their coasts. The proposed schedule is responsive to the recommendations of affected state and local governments.

The proposed program schedules a total of 21 OCS lease sales in 7 areas (4 areas off Alaska, 2 areas in the Gulf of Mexico, and 1 area in the Atlantic). Maps A and B show the areas proposed for leasing. Table A lists the location and timing of the proposed lease sales in areas that are available for leasing consideration, i.e., not withdrawn or subject to congressional moratoria. Table B lists the location and timing of the proposed lease sales in areas that are withdrawn and/or subject to moratoria.

Alaska Region

In the Alaska Region, the program proposes multiple lease sales in the Beaufort and Chukchi Seas and North Aleutian Basin Planning Areas, which are three areas of interest to Alaska, the MMS, and the oil and gas industry. Multiple sales are consistent with the Governor of Alaska's recommendations. The North Aleutian Basin Planning Area is currently withdrawn by presidential order under section 12 of the OCS Lands Act.

Two of these areas are modified from the draft proposed program. In the Chukchi Sea, the proposed program removes from leasing consideration, a 25-mile buffer area along the coast, as there is no existing oil and gas activity in the area and the State has made no request to include leasing closer to shore. For the North Aleutian Basin, in response to comments from the Governor and the vast majority of the local governments and tribal organizations, this program proposes sales only in the area offered in Sale 92 held in 1985. With that limitation of the area to be offered, the Governor of Alaska requested “that the President lift the withdrawal of the North Aleutian Basin planning area from the leasing program, and allow the scheduling of lease sales in the Sale 92 area in the 2007-2012 program.” Therefore, the North Aleutian Basin is included.

The Cook Inlet Planning Area is included on the schedule as a special interest sale. The sales are proposed for 2009 and 2011, but before the MMS proceeds, it will issue a request for nominations and comments and will move forward only if environmentally acceptable blocks are nominated by industry. If this does not occur, the sale will likely be postponed and a request for nominations and comments may be issued again the following year and so on through the 5-year schedule until the sale is held or the schedule expires.

Gulf of Mexico Region

In the Central and Western Gulf of Mexico Planning Areas, which remain the two areas of highest resource potential and interest, the proposed program is the same as that of the draft proposed program with the exception of the exclusion of a small area in the Central Gulf that is east of the military line (86° W 41′ N). The program continues to schedule annual areawide lease sales, as has been the customary practice, and proposes a sale in 2007 of a portion of the area that was identified for Sale 181 in the 5-year program for 1997-2002. As a result of the reconfiguration of some planning areas to follow new administrative lines, some of the areas formerly included in the Eastern and Western Gulf Planning Area are now part of the Central Gulf Planning Area. There are no lease sales scheduled in the Eastern Gulf Planning Area. The original Sale 181 area is not under presidential withdrawal and has not been subject to congressional moratoria. In addition, the area being considered for leasing will not include the area within 100 miles of the Florida coast that used to be part of the Eastern Gulf Planning Area. This will respect the commitment made earlier by the Secretary. In the August 2005 Request for Information, then Secretary Norton stated that she “had no intention of offering for leasing areas in the Eastern Gulf of Mexico Planning Area within 100 miles of the coast of the State of Florida.” Subsequent annual Central Gulf sales may include the area to the south of the Sale 181 area that is currently under presidential withdrawal and has been subject to annual congressional moratoria. In addition, pursuant to Section 19 of the OCS Lands Act, no sale will be proposed until all affected states have the opportunity to comment.

Atlantic OCS

There are four planning areas in the Atlantic OCS—North Atlantic, Mid-Atlantic, South Atlantic, and Straits of Florida. As in the draft proposed program, the proposed program proposes a special interest sale in the Mid-Atlantic in late 2011, which may proceed based on comments received in response to the call for information and depends on whether the presidential withdrawal is lifted and the congressional moratorium is discontinued.

The area proposed for consideration is in the Mid-Atlantic Planning Area off the coastline of Virginia. Inclusion of this area in the proposed program will allow the gathering of additional information needed to decide whether to include this area in the proposed final program. As in the Chukchi Sea, the proposed program area includes a 25-mile buffer from leasing consideration as there is no existing oil and gas activity in the area and the State has made no request to include leasing closer to shore. In addition, there is no leasing proposed in a wedge-shaped No-Obstruction Zone, to protect navigation activities in and out of the Chesapeake Bay. In addition, pursuant to section 19 of the OCS Lands Act, no sale will be proposed until all affected states have the opportunity to comment. This area is also under presidential withdrawal under section 12 and has been subject to congressional moratoria.

Table A: Draft Proposed Program for 2007-2012—Lease Sale Schedule for Available Areas

Sale No.	Area	Year
204	Western Gulf of Mexico	2007
205	Central Gulf of Mexico	2007
193	Chukchi Sea	2007
206	Central Gulf of Mexico	2008
207	Western Gulf of Mexico	2008
208	Central Gulf of Mexico	2009
209	Beaufort Sea	2009
210	Western Gulf of Mexico	2009
211	Cook Inlet	2009
212	Chukchi Sea	2010
213	Central Gulf of Mexico	2010
215	Western Gulf of Mexico	2010
216	Central Gulf of Mexico	2011
217	Beaufort Sea	2011
218	Western Gulf of Mexico	2011
219	Cook Inlet	2011
221	Chukchi Sea	2012
222	Central Gulf of Mexico	2012

Table B: Draft Proposed Program for 2007-2012—Potential Lease Sale Schedule for Areas Subject to Restrictions*

Sale No.	Area	Year
214	North Aleutian Basin	2010
220	Mid-Atlantic	2011
223	North Aleutian Basin	2012
* Lease sales would only be held if the President chooses to modify the withdrawal in both areas and Congress discontinues the annual appropriations moratorium in the Mid-Atlantic.

Assurance of Fair Market Value

Section 18 of the OCS Lands Act requires receipt of fair market value for OCS oil and gas leases and the rights they convey. The proposed program carries forward the provisions published in the draft proposed program: setting minimum bid levels by individual lease sale based on market conditions and continuing use of a two-phase bid evaluation process.

Information Requested

We request all interested and affected parties to comment on the size, timing, and location of leasing and the procedures for assuring fair market value that are included in the Proposed 5-Year OCS Oil and Gas Leasing Program for 2007-2012. Respondents who submitted information in response to previous requests for comments on the preparation of this 5-year program may wish to reference that information, as appropriate, rather than repeating it in their comments on the proposed program. We also invite comments and suggestions on how to proceed with the section 18 analysis for the proposed final program.

Section 18(g) authorizes confidential treatment of privileged or proprietary information that is submitted. In order to protect the confidentiality of such information, respondents should include it as an attachment to other comments submitted and mark it appropriately. On request, the MMS will treat such information as confidential from the time of its receipt until 5 years after approval of the new leasing program, subject to the standards of the Freedom of Information Act. MMS will not treat as confidential any aggregate summaries of such information, the names of respondents, and comments not containing such information.

Next Steps in the Process

MMS plans to issue the proposed final program and final EIS in the spring of 2007. Sixty days later, the Secretary may approve the new 5-year program to go into effect as of July 1, 2007.

Dated: August 21, 2006.

R. M. “Johnnie” Burton,

Director, Minerals Management Service.