OCS Access Debate Continues

American Association of Petroleum Geologists (AAPG)

The U.S. Court of Appeals for the District of Columbia Circuit has ruled that while it remained concerned about environmental assessments performed for the 2007-12 five-year program, those concerns were restricted to the lease sales planned for the Arctic Ocean and Alaska outer continental shelf (OCS).

The July 28 ruling came in response to a U.S. Department of Interior query.

“I am pleased with the Court’s decision,” stated Interior Secretary Ken Salazar. “Consistent with the department’s request, the court clarified that its prior ruling only applies to the Chukchi, Beaufort Sea and Bering Seas. We are moving forward with the planned Aug. 19 Gulf of Mexico lease sale.”

Earlier in July the Interior Department had announced it would proceed with the August lease sale of approximately 3,400 tracts offshore Texas, but only if the D.C. court clarified the intent of its April 17 ruling before the sale date.

In that ruling, the court found that the Minerals Management Service (MMS) had performed inadequate scientific and environmental impact assessments, specifically in the Arctic region. Consequently, it vacated – essentially suspended – the 2007-12 five-year program.

The wording suggested the court was applying it to the entire five-year program, rather than specific lease sales. This left the Interior and MMS with no mechanism to lease the nation’s OCS – and companies holding leases from previous sales under the program in legal limbo.

But the new ruling clarified that the court’s decision applies only to Arctic and Alaska regions, permitting MMS to resume leasing in other areas as planned under the 2007-12 five-year program.

At the same time, however, it is working on a new and overlapping 2010-15 five-year program, which is now in the first of several public comment phases.

For more than two decades much of the OCS was off-limits to oil and natural gas exploration and production. Other than the central and western Gulf of Mexico, and recently some parts of Alaska, the OCS was either under a Congressional moratorium or a presidential withdrawal for all exploration and production activities.

During this period, AAPG articulated its support of access to the nation’s OCS for responsible resource development, issuing two statements on the topic:

Both statements can be found on the Division of Professional Affairs site.

The lack of access for exploration and production caused great consternation for the industry, but at least it was predictable: Nothing was going to happen outside those few areas open for leasing.

But the summer of 2008 changed all that. As crude oil prices approached $150 per barrel, then –U.S. President George W. Bush removed the presidential withdrawal from OCS leasing. High gasoline prices and election year politicking successfully pressured Congress to permit its moratorium to lapse, which it did Sept. 30, 2008.

For the first time in many years there were now no external forces preventing leasing of the nation’s OCS. But by law such leases occur only within the context of a five-year program developed by MMS. These programs are created through a proscribed process that takes several years and provides multiple opportunities for comment from interested stakeholders.

Thus, in order for MMS to lease any acreage previously under moratorium, that acreage would have to be included in a five-year program.

On this past Jan. 16, just four days before leaving office, the Bush administration issued a proposed five-year program draft for 60 days of public comment. The proposed program would cover years 2010 to 2015 and include lease sales of the previously excluded areas.

In early February, newly confirmed Interior Secretary Salazar extended the public comment period to six months. This bought the Obama administration time to consider its options. He ordered the U.S. Geological Survey and MMS to report within 45 days the expected resource potential on the OCS, and held four town hall meetings across the country with elected leaders and the public to solicit their views on OCS development.

Now the MMS is collecting comments from all interested stakeholders, and the deadline is Sept. 21.

The United States currently is debating access to federal lands for development of many types of resources: oil, natural gas, coal, uranium and other minerals. While this MMS comment period is about the OCS, it is actually about the broader principle of access, which affects all resource developers.

AAPG’s view on this issue is clear: As an Association we support access to federal lands for exploration and production of petroleum and mineral resources.

It must be done safely. It must be done responsibly. But it must be done. These resources are the foundation of our economy and our society.

If you have not already commented on this issue, I would encourage you to do so immediately. Visit the GEO-DC Web page to link to a prepared letter that you can modify and send to MMS through the Consumer Energy Alliance.

Now is the time to act.

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