New initiatives proposed by the Mineral Management Service couldcontribute an additional 500 Bcf to 1 Tcf/year of gas productionbetween 2004 and 2006, according to MMS Director Walt Rosenbusch.

“There are predictions of serious shortages of natural gas thiswinter, including the Northeast U.S.,” noted Rosenbusch. “Therehave already been several brownouts across the country this yearbecause of the demands on electrical production.”

MMS has designed two new initiatives specifically to spurdomestic natural gas production during the years 2004-2006. Theseare “strong initiatives on the part of the MMS to deal with thelarge projected increase in gas demand for the nation,” Rosenbuschadded. “Several studies, including the report issued by theNational Petroleum Council, indicate that the nation’s demand fornatural gas will grow from the current 22 Tcf of gas to 29 Tcf ofgas in 2010.”

The MMS rolled out its gas production enhancement proposal aspart of an announcement for Central Gulf Lease Sale 178. Theinitiatives include the following:

In addition, MMS proposes modified initiatives for deep-waterroyalty relief:

MMS will conduct public workshops Dec. 12 in New Orleans andDec. 14 in Houston to discuss the new initiatives as well as theprovisions in the proposed rule on discretionary royalty relief.

The proposed Lease Sale 178 encompasses 4,366 available blocksin the Central Gulf Outer Continental Shelf planning area offshoreLouisiana, Mississippi and Alabama. The area covers about 23.07million acres. The blocks in this lease sale are located three to200 miles offshore in water depths ranging from four to 3,425meters. Estimates of undiscovered economically recoverablehydrocarbons that are expected to be discovered and produced as aresult of this lease sale range from 150 to 440 million barrels ofoil and 1.53 to 4.39 Tcf of natural gas.

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