Secretary Kempthorne announces proposed final 2007-2012 OCS Oil and Gas Leasing Program and Final Environmental Impact Statement

Secretary of the Interior Dirk Kempthorne announced that the Minerals Management Service (MMS) has completed the Five-Year Outer Continental Shelf (OCS) Oil and Gas Leasing Program which will guide domestic energy leasing on the OCS from 2007 to 2012. The program proposes 21 lease sales in eight OCS planning areas in the Gulf of Mexico, off Alaska and in the Atlantic Ocean off the coast of Virginia. A MMS analysis estimates that implementation of the program could result in the production of 10 Bbo and 45 Tcf, with US $170 billion in net benefits for the nation over a 40-year time span.

“In developing the OCS oil and gas leasing program, the administration considered all potential energy resources that can be developed in a safe and environmentally sound manner,” said Kempthorne. “The OCS is a vital source of domestic oil and natural gas for America, especially in light of sharply rising energy prices and increasing demand for these resources. It would be irresponsible not to make maximum use of our own domestic energy resources.”

The program and the associated Final Environmental Impact Statement (FEIS) was to appear in the Federal Register on May 2, 2007. As required by the OCS Lands Act, the program was submitted to the President and Congress today and, after 60 days, the Secretary may approve it to take effect on July 1, 2007.

The program is in the fourth of five steps in its development, which included three periods of public comment, resulting in more than 125,000 responses. Two events occurred during the Program development—enactment of the Gulf of Mexico Energy Security Act of 2006 and modification of the presidential withdrawal in Alaska and the Central Gulf of Mexico.

The act, signed by President George W. Bush on December 20, 2006, requires oil and gas leasing in 2 million acres in the Central Gulf of Mexico Planning Area known as the “Sale 181 Area” and an area of approximately 580,000 acres in the Eastern Gulf of Mexico Planning Area as well.

The President modified the presidential withdrawal for two areas in the OCS -- the North Aleutian Basin in Alaska and an area in the Central Gulf of Mexico, referred to as the 181 South Area. The areas were earlier withdrawn from consideration for leasing through 2012 by the previous administration. Congress had imposed moratoria on oil and gas activities in the North Aleutian Basin from FY 1990 through FY 2003 but discontinued the yearly moratorium in FY 2004. Congress lifted the moratorium on the 181 South Area with the act.

The program includes a Central Gulf sale in 2007 that involves a portion of the Sale 181 area and, as mandated by the act, one lease sale in the Eastern Gulf in 2008. There is no leasing proposed within 125 miles of the Florida coast or east of the military mission line in the Eastern Gulf.

The program schedules eight sales in Alaska: two sales in the Beaufort Sea, three sales in the Chukchi Sea, up to two special-interest sales in Cook Inlet and one sale in the North Aleutian Basin – in an area of about 5.6 million acres that was previously offered during Lease Sale 92 in 1985. There are currently no existing leases in the North Aleutian Basin (NAB). The NAB area would be subject to environmental reviews, including public comment, and extensive consultation with state and local governments and tribal organizations before any lease sale proceeds.

The program also includes a special-interest sale in the Mid-Atlantic Planning Area off the coastline of Virginia in late 2011. Between the current presidential withdrawal and the annual congressional moratoria, the majority of the OCS around the lower 48 states is off-limits to energy development, including all areas off Virginia. The special-interest sale would, therefore, only take place if the presidential withdrawal is modified and the congressional moratorium discontinued in the Mid-Atlantic Planning Area. This planning area excludes a 50-mile coastal buffer from leasing consideration as requested by the Commonwealth of Virginia, as well as a wedge-shaped No-Obstruction Zone to avoid conflicts with navigation activities in and out of the Chesapeake Bay.

No lease sale would proceed without additional and more site-specific analysis of its environmental effects under the National Environmental Policy Act.

“The offshore energy industry has a remarkable safety record,” said Secretary Kempthorne. “Two major hurricanes passed through the Gulf of Mexico in 2005 without causing a single significant spill from an OCS well. That’s a remarkable achievement.”

The 2007-2012 OCS oil and gas leasing program is the seventh prepared since Congress passed the OCS Lands Act Amendments of 1978, which requires the Secretary of the Interior to prepare and maintain 5-year programs for offshore oil and natural gas leasing. The current leasing program runs through June 30, 2007.

Proposed Final Program for 2007-2012—

Lease Sale Schedule

*Sale 224 is not a section 18 sale, but mandated by the Gulf of Mexico Energy Security Act of 2006.

**Lease sale would only be held if the President chooses to modify the withdrawal and Congress discontinues the annual appropriations moratorium in the Mid-Atlantic.