Operators that desire to conduct development and exploratory drilling programs off California face more delays.
US Dist. Judge Claudia Wilken ordered the US Minerals Management Service and California Coastal Commission June 20 to review lease suspensions for 36 undeveloped federal leases off California under provisions of the Coastal Zone Management Act.
MMS issued new "directed suspensions" for the nine units that contain the 36 leases and for one nonunitized lease while it works to comply with the judge's order. The new suspensions replace suspensions of operations issued in November 1999.
MMS on June 15, 2001, had issued a draft environmental impact statement (EIS) for proposed delineation drilling on the 36 leases off Santa Barbara County, Calif., and set public hearings for mid-July, but after Wilken's decision it postponed those hearings and extended the public comment period.
Nuevo Energy Co., Houston, one operator affected by the judge's order, noted that the federal government in November 1999 issued extensions of varying lengths to lessees on completion of the California Offshore Oil & Gas Energy Review (Cooger). The extensions included exploration plans and timetables for development of the leases.
The judge's order "is yet another link in a long chain of government decisions that have directly delayed" its plans, said Nuevo. The company said the 36 leases contain more than 1 billion bbl of oil and more than 900 bcf of gas and that development has been delayed for almost 20 years.
Nuevo said the leases will be developed in an environmentally responsible way when the opportunity is presented and that the hydrocarbons represent an important energy source for California.
This type of delay reinforces the need to implement President Bush's national energy policy recommendations that call for the streamlining of rules that govern coastal and offshore operations, leasing, and project approvals, Nuevo said.
Venoco Inc., Santa Barbara, withdrew the Cavern Point Unit exploration plan on July 3 as a result of Wilken's decision with plans to resubmit it later.
Preparation of a combined EIS for either exploratory or delineation activities is unprecedented in the MMS, the agency said.
Scrutiny repeated
The EIS is an evaluation of the potential impact of proposed drilling on four undeveloped drilling units: Gato Canyon in the western Santa Barbara Channel, Bonito off Point Conception, and Purisma Point and Point Sal, both in the Santa Maria basin off northern Santa Barbara County.
MMS said operators plan the sequential drilling of four to five delineation wells on the four units by a single semisubmersible.
Previous exploratory wells found significant quantities of hydrocarbons on each unit. That work took place under exploration plans approved by MMS and previously found by the CCC to be consistent with the California Coastal Management Plan.
The approved exploration plans identify proposed well locations that have received CCC consistency concurrence but to date have not been drilled. Wilkens' order requires MMS to certify to the CCC that the lease extensions are consistent with the CZMA.
MMS said 28 exploratory wells have been drilled in the area where the new activities are proposed.
"Because a number of years have elapsed since these approvals, the MMS is requiring the operators of the leases to update the previously approved exploration plans through revisions," the agency noted.
As operators decide to pursue future development of the subject units subsequent to the proposed delineation drilling, the operators will prepare and submit to MMS detailed development and production plans. Those plans would be subjected to separate National Environ- mental Policy Act analyses and would be submitted to the CCC for consistency review.
MMS said, "The development of the EIS and the inclusion of an extensive cumulative analysis of the hypothetical development of all 36 currently undeveloped leases was performed in response to concerns expressed by and commitments made to California Gov. Gray Davis and CCC Chair Sara Wan by the Interior Department and the MMS in 1999."
