Outer Continental ShelfOuter Continental Shelf BackgroundBackground

North Aleutian Basin EnergyNorth Aleutian Basin Energy-- Fisheries WorkshopFisheries Workshop

John GollJohn GollMMS Alaska Regional DirectorMMS Alaska Regional Director

March 18March 18--19, 200819, 2008

The Outer Continental ShelfThe Outer Continental Shelfoff the coast beyond 3 milesoff the coast beyond 3 miles

Oil and Gas Leasing, Oil and Gas Leasing, Regulation, Monitoring, Regulation, Monitoring, InspectionsInspectionsSand, gravel, gold, and other Sand, gravel, gold, and other minerals, minerals, New New >> Energy from wind, >> Energy from wind, currents, waves, tidescurrents, waves, tidesRoyalty Collection and Royalty Collection and DisbursementDisbursement

MMS: An Ocean, Energy,MMS: An Ocean, Energy,& Mineral Agency& Mineral Agency

••EnvironmentalEnvironmental& Technical& TechnicalResearchResearch

The People of MMSThe People of MMS A diverse group A diverse group

for Energy Issuesfor Energy Issues

Marine BiologistsMarine BiologistsOceanographersOceanographersEconomistsEconomistsSociologistsSociologistsInformation ManagersInformation ManagersAuditorsAuditorsGeographersGeographersNumerical modelersNumerical modelersComputer SpecialistsComputer Specialists

EngineersEngineerspetroleumpetroleummechanicalmechanical

GeologistsGeologistsArchaeologistsArchaeologistsGeophysicistsGeophysicistsMeteorologistsMeteorologists

Inspections

Marine Monitoring

What is the OCS?What is the OCS?The Outer Continental Shelf or The Outer Continental Shelf or ““OCSOCS”” consists of consists of submerged lands lying beyond the coastal state waters submerged lands lying beyond the coastal state waters offshore the U.S.offshore the U.S.In 1953, Congress designated the Secretary of the Interior In 1953, Congress designated the Secretary of the Interior to administer mineral exploration and development of the to administer mineral exploration and development of the entire OCS through the OCS Lands Act.entire OCS through the OCS Lands Act.

The LawsThe Laws

OCLSA 1954OCLSA 1954Amendments 1978Amendments 1978

Regulates air emissions from industrial activities

National Environmental Policy Act

Federal Water Pollution Control Act (Clean Water Act)

Clean Air Act

Coastal Zone Management Act

Endangered Species Act

Marine Mammal Protection Act

Fishery Conservation & Management Act

National Historic Preservation Act

Includes environmental analysis & protection in project planning

Regulates discharges from oil & gas activities into marine waters

Assures compliance with State coastal area protection plans

Protects threatened & endangered species

Protects marine mammals

Protects essential fish habitat

Protects archaeological resources including those on the ocean floor

Environmental Laws Affect ProgramEnvironmental Laws Affect Program

Oil Pollution Act Oil Spill Financial Responsibility

Mu l t i pl e Agenci es I nvol vedMu l t i pl e Agenci es I nvol vedU.S. Coast GuardU.S. Coast Guard

OilOil--spill response, port and vessel security and inspectionsspill response, port and vessel security and inspections

Environmental Protection AgencyEnvironmental Protection Agency

Air and water qualityAir and water quality

National Oceanic and Atmospheric AdministrationNational Oceanic and Atmospheric Administration

Coastal programsCoastal programs

Marine mammals/endangered speciesMarine mammals/endangered species

FisheriesFisheries

Fish and Wildlife ServiceFish and Wildlife Service

Marine mammals/endangered speciesMarine mammals/endangered species

State & Local LevelState & Local LevelDepartment of Natural Resources (leasing, Department of Natural Resources (leasing, CZM)CZM)Departments of Environmental Conservation Departments of Environmental Conservation (air, water, spill response)(air, water, spill response)Department of Fish & GameDepartment of Fish & GameAlaska Oil and Gas Conservation CommissionAlaska Oil and Gas Conservation CommissionState Historic Preservation OfficerState Historic Preservation OfficerBoroughsBoroughsTribal GovernmentsTribal Governments

5-Year Program

Lease Sale

Exploration Plan

Development and Production Plan

The OCS Decision Making PyramidThe OCS Decision Making Pyramid

Government-proposed

Lessee-proposed

MMS ProcessesMMS ProcessesEstimate Oil and Gas ResourcesEstimate Oil and Gas Resources

Set a 5 Year ScheduleSet a 5 Year ScheduleLease AreasLease Areas

Review ExplorationReview ExplorationReview Development ProjectsReview Development Projects

Overview and Inspect ActivitiesOverview and Inspect ActivitiesEnvironmental EvaluationsEnvironmental EvaluationsConsultation with Tribal GovernmentsConsultation with Tribal GovernmentsUnderpinned by Environmental andUnderpinned by Environmental and

Technical ResearchTechnical Research

Resource Resource AssessmentAssessment

Geologic AnalysisGeologic AnalysisPlay IdentificationPlay Identification------Numbers of mapped & Numbers of mapped &

speculative prospectsspeculative prospectsArea (acres)Area (acres)Net Pay (thickness)Net Pay (thickness)Porosity, % water satPorosity, % water sat’’nnFormation Vol FactorFormation Vol FactorRecovery EfficiencyRecovery EfficiencyProportion oil/gas/mixProportion oil/gas/mixPlay and prospect riskPlay and prospect risk

A 5 Year ProgramAlaska 2007-12 OCS Program

SolicitComments 45-day

CommentPeriod

Draft Proposed ProgramPublished

60-DayCommentPeriod

Proposed ProgramDraft EISPublished

90-DayComment Period

Proposed FinalProgramFinal EIS Published

60-DayPeriodfor Congress

Final 5-YearProgramAnnounced

The OCS Leasing, Exploration, and Development Process The OCS Leasing, Exploration, and Development Process -- generalizedgeneralized

Call forInformationPublished

45-Day CommentPeriod

DefineSaleArea

Draft EISPublished

45- to 90-DayCommentPeriod

Final EISPublished, Proposed Notice and CD sent to States

30-Day CommentPeriod

60-Day Comment Period

90-Day Review

Final Noticeof SalePublished

30-DayPeriod Sale Leases

Issued

Prelease Develop 5-Year Program

Planning for Specific Sale - general

ExplorationPlanSubmitted

EnvironmentalAssessment

ExplorationPlan

Review

90-Day CZMReview

APDDecision

PermitsGranted

ExplorationDrillingStarts

FirstExplorationWell (s)Completed

DelineationWellDrilling

Post Lease Exploration Plan Approval

Development& ProductionPlan Submitted

CompanySubmits CZMConsistencyCertification

MMSPrepares NEPA Analysis

CZM ConsistencyConcurrence from State

Then Development andProduction Plan Decision

Production WellApplication

FirstOil/GasProduction

Abbreviations: ADP, Application for Permit to Drill; CD, Consistency Determination; CZM, Coastal Zone Management; EIS, Environmental Impact StatementNEPA, National Environmental Policy Act

Development and Production Plan Approval

30-days

60+60 days

Le as ing ProcessLe as ing ProcessIssue Call for Information and NominationsIssue Call for Information and NominationsIdentify Area for ConsiderationIdentify Area for ConsiderationPrepare Draft Environmental DocumentPrepare Draft Environmental DocumentEndangered Species and other ConsultationsEndangered Species and other ConsultationsPrepare Final Environmental DocumentPrepare Final Environmental DocumentProposed Notice of Sale/Consistency DeterminationProposed Notice of Sale/Consistency DeterminationSeek GovernorSeek Governor’’s Comment on Size, Timing, and s Comment on Size, Timing, and LocationLocationDecision on Final Sale Area/Mitigating Measures/Other Decision on Final Sale Area/Mitigating Measures/Other Terms and ConditionsTerms and ConditionsPublish Final Notice of SalePublish Final Notice of SaleConduct SaleConduct SaleComplete Fair Market Value ReviewComplete Fair Market Value ReviewIssue Accepted LeasesIssue Accepted Leases

Terms of Mine r al Le asesTerms of Mine r al Le ases

Length of lease (5 Length of lease (5 -- 10 years)10 years)Minimum & Production Royalty RatesMinimum & Production Royalty RatesRental RatesRental RatesStipulations/Mitigating MeasuresStipulations/Mitigating Measures

What is Bei ng Conv eyed?What is Bei ng Conv eyed?

Exclusive Right and Privilege to:Exclusive Right and Privilege to:exploreexploredevelopdevelopproduceproduce((if requirements are metif requirements are met))

minerals specified in the lease agreementminerals specified in the lease agreement

Environmental ProtectionEnvironmental Protection

Ensure that all activities on Federal Ensure that all activities on Federal

Offshore lands are conducted with Offshore lands are conducted with

appropriate environmental appropriate environmental

safeguards.safeguards.

Safety & Environmental Protection Safety & Environmental Protection Two Core ObjectivesTwo Core Objectives

Safe Offshore OperationsSafe Offshore Operations

Promote incident free operations Promote incident free operations

during exploration and development on during exploration and development on

Federal Offshore Lands.Federal Offshore Lands.

SolicitComments 45-day

CommentPeriod

Draft Proposed ProgramPublished

60-DayCommentPeriod

Proposed ProgramDraft EISPublished

90-DayComment Period

Proposed FinalProgramFinal EIS Published

60-DayPeriodfor Congress

Final 5-YearProgramAnnounced

The OCS Leasing, Exploration, and Development Process The OCS Leasing, Exploration, and Development Process -- generalizedgeneralized

Call forInformationPublished

45-Day CommentPeriod

DefineSaleArea

Draft EISPublished

45- to 90-DayCommentPeriod

Final EISPublished, Proposed Notice and CD sent to States

30-Day CommentPeriod

60-Day Comment Period

90-Day Review

Final Noticeof SalePublished

30-DayPeriod Sale Leases

Issued

Prelease Develop 5-Year Program

Planning for Specific Sale - general

ExplorationPlanSubmitted

EnvironmentalAssessment

ExplorationPlan

Review

90-Day CZMReview

APDDecision

PermitsGranted

ExplorationDrillingStarts

FirstExplorationWell (s)Completed

DelineationWellDrilling

Post Lease Exploration Plan Approval

Development& ProductionPlan Submitted

CompanySubmits CZMConsistencyCertification

MMSPrepares NEPA Analysis

CZM ConsistencyConcurrence from State

Then Development andProduction Plan Decision

Production WellApplication

FirstOil/GasProduction

Abbreviations: ADP, Application for Permit to Drill; CD, Consistency Determination; CZM, Coastal Zone Management; EIS, Environmental Impact StatementNEPA, National Environmental Policy Act

Development and Production Plan Approval

30-days

60+60 days

Ensure Safe and Ensure Safe and Environmentally Sound OCS Environmentally Sound OCS

Energy DevelopmentEnergy Development

Environmental and operational Environmental and operational oversightoversightRules and regulationsRules and regulationsInspectionsInspectionsTechnological and environmental Technological and environmental researchresearch

Pollution Prevention ProgramPollution Prevention Program 30 CFR 250 Regulations30 CFR 250 Regulations

Shallow hazards surveyShallow hazards surveyDrilling unit review (fit Drilling unit review (fit for use)for use)Well design/constructionWell design/constructionRedundant well control Redundant well control equipmentequipmentWell control training and Well control training and exercisesexercisesEmergency plansEmergency plans

adverse weather/ice adverse weather/ice conditionsconditionsrelief wellsrelief wellsH2SH2Soil spill responseoil spill responseWelding and hotWelding and hot--tappingtapping

Pollution Prevention Pollution Prevention ProgramProgram

30 CFR 250 Regulations30 CFR 250 Regulations ContinuedContinued……

Platform verificationPlatform verificationthird party review of third party review of bottom founded facility bottom founded facility design, construction and design, construction and installationinstallation

Production safety system Production safety system approval and approval and management of changemanagement of changeMandatory subsurface Mandatory subsurface safety valvessafety valvesProduction safety Production safety equipment trainingequipment trainingRecords and reportingRecords and reportingOnOn--site inspectionsite inspection

Oil Pollution Act of 1990Oil Pollution Act of 1990 MMS ResponsibilitiesMMS Responsibilities

Federal Oversight Federal Oversight for all State and for all State and federal offshore oil federal offshore oil and gas facilitiesand gas facilities

Oil Spill Oil Spill Contingency PlansContingency PlansOil Spill Financial Oil Spill Financial ResponsibilityResponsibilityDrillsDrills

MMS ResearchMMS ResearchTechnology and Assessment Technology and Assessment ProgramProgram

engineering and oil spill responseengineering and oil spill response

Environmental Studies Environmental Studies ProgramProgram

University of AlaskaUniversity of AlaskaCMICMI

Walrus haulout

Monitoring

Resear ch Pl anni ngResear ch Pl anni ngEnvironmental Studies FYEnvironmental Studies FY--07 Plan07 Plan

North Aleutian Basin WorkshopNorth Aleutian Basin Workshop•• Held November 28 Held November 28 –– 30, 200630, 2006

Physical OceanographyPhysical OceanographySubsistenceSubsistenceSociologySociologyEconomicsEconomicsMarine MammalsMarine MammalsFishFishBirdsBirdsFate and Effects of DischargesFate and Effects of Discharges

PendingPending

•• Subsistence Study, Phase ISubsistence Study, Phase I

•• Juvenile and Maturing Juvenile and Maturing Salmon Salmon

•• Spatial and Temporal Spatial and Temporal Mapping of Nearshore Mapping of Nearshore Juvenile Fish and Settling Juvenile Fish and Settling CrabCrab

OngoingOngoing

•• Information Status and Information Status and Research Planning Meeting Research Planning Meeting (Complete) (Complete)

•• North Pacific Right Whales North Pacific Right Whales in the Southeastern Bering in the Southeastern Bering SeaSea

•• Circulation ModelingCirculation Modeling

North Aleutian BasinEnvironmental Studies

**Additional Studies will be proposed for FY 09.

North Aleutian Basin North Aleutian Basin BackgroundBackground

A North Aleutian Basin sale was included in the 5A North Aleutian Basin sale was included in the 5--Year Program for 1982Year Program for 1982--19871987Sale 92 was held in January 1986, but bid opening was enjoined bSale 92 was held in January 1986, but bid opening was enjoined by the courty the courtBids were opened in October 1988 and 23 leases were issued in NoBids were opened in October 1988 and 23 leases were issued in November 1988vember 1988FY 1990 DOI Appropriations Acts placed moratoria on postlease acFY 1990 DOI Appropriations Acts placed moratoria on postlease activity, with tivity, with yearly suspensions on leases. No postlease activity ever occurryearly suspensions on leases. No postlease activity ever occurred. ed. Leaseholders filed suit on breach of contract; settled in 1995.FY 1990-2003 - DOI Appropriations Act placed preleasing and leasing moratoria on area 1998 - NAB withdrawn from preleasing and leasing activity under section 12 of OCS Lands Act through 2012 by Presidential direction.FY 2004 Congress removed moratoria language from DOI AppropriationsJanuary 2007 – Presidential withdrawal modified to allow Secretary to considerleasing in this area.

North Aleutian Basin Sale 214

In 2011

22--D Seismic Data: 64,700 LineD Seismic Data: 64,700 Line-- MilesMiles

CDP SEISMIC DATA GRID (TWO-DIMENSIONAL)

Sherwood\....\Fig03-NorthAleutianSeismicGrid.cdr

Bristol Bay

Alaska Peninsula

NORTH ALEUTIAN SHELFCOST 1 WELL

0 25 50 75 100 miles

Sale 92 (1988)

Gas-Prone (73% Gas) Plays(Tertiary Source)Oil-Prone (77% Oil) Plays

(Mesozoic Source)

Becharof Lake

Ugash

ik Lak

es

Iliamna Lake

Kuka L.

LakeBrooks

Naknek Lake

BearLake

BRUIN BAY FAULT

Magmatic Mesozoic Basement

Sedimentary Mesozoic Basement

164°

162°

160°

158°156°

58°

56°

ALASKA PENINSULA

ST. GEORGEBASIN

NORTH ALEUTIAN BASIN

AMAK BASIN

BLACK HILLS UPLIFT

Bristol Bay

Pacific Ocean

ALASKA

NO

RTH

ALE

UTIA

N B

ASI

N O

CS

PLA

NN

ING

AR

EA

Sherwood\....\NAB-Oil Prone vs Gas Prone.cdr

0 50

MILES

Leased Blocks (1988, Sale 92, $95.4 MM, 23 Leases)

Leased Blocks (2005, AK State, $1.3 MM, 37 Leases)

Well, Plugged and Abandoned

Gas-Prone Plays with Tertiary-Age Sources. Plays 1, 2, & 6, 8.293 Tcf Gas, 559 Mmb Oil, Gas/Oil = 73/27 Energy-Equivalent

Oil-Prone Plays with Possible Mesozoic-Age Sources. Plays 3 & 5, 0.329 Tcf Gas, 193 Mmb Oil, Gas/Oil = 23/77 Energy-Equivalent

Uplift or Structural Arch

EXPLANATION

GreatBasins 2

GreatBasins 1

Becharof Lake 1

BearCreek 1

Wide Bay 1

Grammar 1

Finnegan 1

Alaska 1Lee 1

Koniag 1

PainterCreek 1

Ugashik 1

PortHeiden 1

SandyRiver 1

North AleutianShelf COST 1

Big River 1

DavidRiver 1, 1A

HoodooLake 1

HoodooLake 2

CanoeBay 1

CathedralRiver 1

Bertha 1Monkshood 1

St. GeorgeCOST 2

Oil and Gas EstimatesOil and Gas Estimates Risked Technically RecoverableRisked Technically Recoverable

CommodityCommodity >95 % >95 % chancechance

MEANMEAN > 5 % > 5 % chancechance

Gas (Trillion Gas (Trillion Cubic Feet)Cubic Feet)

0.40.4 8.68.6 23.223.2

Oil (billion Oil (billion barrels)barrels)

0.020.02 0.750.75 2.52.5

We see the basin as Natural Gas Prone.We see the basin as Natural Gas Prone.

North Aleutian Basin: What Might Be ThereNorth Aleutian Basin: What Might Be There

Key Milestones (Key Milestones (TentativeTentative)) PrePre--lease and Environmental Review lease and Environmental Review

ProcessesProcesses

Sale 214 Sale 214 Call for Information and NOI Call for Information and NOI –– Spring 2008Spring 2008Public Scoping and meetings Public Scoping and meetings –– SpringSpring--SummerSummer--on 2008on 2008Draft EIS Draft EIS –– Early 2010 Early 2010 Public Hearings Public Hearings –– Spring/Summer 2010Spring/Summer 2010Final EIS Final EIS –– Early 2011Early 2011Sale Sale –– Fall 2011Fall 2011

http://http://www.mms.govwww.mms.gov

/alaska//alaska/

http://www.mms.gov/