DOI Approves OCS Drilling With Environmental Swing

In a meeting late last week, the Interior Department's Outer Continental Shelf Policy Committee took on an environmental flavor by urging that in order to open up offshore moratoria areas for limited drilling, "congressional funding" for the appropriate environmental studies and monitoring will be necessary.

Funding would be directed to the Minerals Management Service (MMS) and other agencies including the Fish and Wildlife Service, National Marine Fisheries Service, the Department of Energy and the Environmental Protection Agency will be necessary.

The OCS committee said assured funding would allow staff to accomplish the work necessary to increase production of gas in an "environmentally sound manner." The increased funding from Congress could also be used for mitigation, including impact assistance funds, revenue sharing and local participation in the decision making processes, it said in a resolution. The environmental message was included with the recommendation that the MMS, in consultation with industry and affected states, should identify the top five geologic plays in the moratoria areas with the best prospects for pilot programs. If possible, the MMS should choose the top five plays that the gas industry would likely explore if permitted, the committee added. The object is to determine if limited drilling can be conducted in a way that will not unduly affect the environment.

Moratoria currently restrict access to areas containing 62 Tcf of gas reserves, according to the subcommittee's assessment. Among the restricted areas are: the Atlantic (28 Tcf); most of the Eastern Gulf (8.5 Tcf); offshore California, Washington and Oregon (19 Tcf); and the North Aleutian Basin (6.8 Tcf).

The committee's findings agreed with the earlier recommendations from the Subcommittee on Natural Gas that not only should gas be considered "a significant part of the energy base," but that the OCS should be considered "a significant source for increased supply of natural gas to meet the national demand for the long term."

In the committee's approved recommendations, it called upon the MMS to develop economic incentives to encourage new drilling for gas in an environmentally friendly manner in deep formations, subsalt formations and in deep water. Incentives were recommended for both new leases and existing leases to maximize the use of existing infrastructure on the OCS.

Also in its report, the committee said that a gas pipeline from Alaska to the Lower 48 would "favorably encourage" an increase in natural gas production by creating "favorable economics." It urged the DOI to work with other agencies to expedite all appropriate permit reviews for such a pipeline.

Formed last fall, the Natural Gas Subcommittee was given the task of gathering information on gas development, and presenting an assessment to the OCS Policy Committee of the contribution the OCS can make in meeting the short-term and long-term gas needs of the country (see NGI, May 21). The Department of Energy (DOE) projects an increase in gas demand as high as 35 Tcf/year from the current level of 21 Tcf, only 18.7 Tcf of which is met by U.S. production. Currently the OCS accounts for about 26% of the gas produced in the United States, and most of its contribution comes from the Central and Western Gulf of Mexico with a small amount arriving from offshore California.

The OCS committee recommended that Interior Secretary Gale Norton "take timely action to implement the recommendations" forwarded by the committee. "The next step in the process is that the secretary will receive a copy of this resolution and the recommendations for her consideration," said A.B. Wade, an MMS spokeswoman. "Now she does not have to do anything with it. Some of the recommendations may be more attractive to her than others, so simply at this point she is taking them under advisement."

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