MMS plan proposes 20 offshore lease sales for 2002-07

By the OGJ Online Staff

WASHINGTON, DC, July 20 -- The US Minerals Management Service Friday proposed a 2002-07 offshore lease sale schedule that only includes sales off Alaska and in the Gulf of Mexico.

The draft proposal did not include any area currently under congressional spending moratoriums or presidential withdrawals. Those areas are off the East and West Coasts and in parts of the eastern Gulf of Mexico.

The schedule calls for the usual central and western gulf sales held annually, and eastern gulf sales in 2003 and 2005. An eastern gulf sale planned for December has been controversial, prompting Interior Sec. Gale Norton to slash the acreage offered by 75% (OGJ Online, July 12, 2001).

The two planned eastern Gulf sales would cover only the reduced Sale 181 acreage covering 256 blocks.

Off Alaska, the schedule proposes Beaufort Sea and Norton basin sales in 2003; Cook Inlet/Shelikof Strait and Chukchi Sea/Hope basin sales in 2004: a Beaufort Sea sale in 2005; a Cook Inlet/Shelikof Strait sale in 2006; and Beaufort Sea and Chukchi Sea/Hope basin sales in 2007.

Tom Kitsos, acting MMS director, said the sales are needed. "Even with increased conservation efforts, we are confronted with a national energy problem where our dependence on foreign oil will continue as well as increased reliance on natural gas -- an environmentally preferable fuel primarily produced domestically."

He said over the next 20 years US oil consumption will rise 33%, gas demand 50%, and electricity demand 45%.

After reviewing public comments on the draft plan, MMS will prepare a proposed program and issue a draft environmental impact statement, both of which will be opened to public comment.

MMS would issue the final program in the spring and it would take effect June 30, 2002. The process does not allow MMS to add sales to the schedule after it is initially proposed.

Thomas Michels, director of public affairs for the National Ocean Industries Association said, "The schedule is quite good. It's slightly more aggressive than the last one, offering 20 sales as oppose to 16."

He said the Norton basin sale off Alaska in 2003 could prove interesting. "They will offer leases on a tract nomination basis rather than open the whole area.

"A large reason they're having that lease sale is to supply the needs of the people in the western part of Alaska. That's going to be an interesting prototype that might work later in other offshore areas."

MMS said the Norton basin acreage was offered "to make resources available for use by local communities and industries." It said the sale could occur as early as 2003 or as late as 2007, based on consultations with interested and affected parties.

One sale has been held in the Norton basin but there are no active leases. MMS said six exploration wells were drilled in the area but no commercial discoveries were announced. It estimated resources at 20-30 million bbl of oil and 1-1.6 tcf of gas.