|
The
NewsRoom
Release #: 3074
Date: April 15, 2004
MMS
Finalizes Cook Inlet Oil and Gas Sale
As a step to stabilize energy resources in
south-central Alaska, the Minerals Management Service today announced
an oil and gas lease sale in Cook Inlet. The sale opens
relatively unexplored areas within Cook Inlet that have good potential
for oil and gas, according to MMS. The Sale includes provisions
to protect the important Cook Inlet fisheries. The Sale will be
held in conjunction with the State of Alaska’s Cook Inlet area-wide
sale on May 19.
The sale area is
located in Alaska’s Cook Inlet in federal waters between three and 30
nautical miles offshore. The area covers about two million acres
extending from just south of Kalgin Island to just northwest of Shuyak
Island, in water depths ranging from about 30 to 650 feet. Shelikof
Strait is not included in the proposed sale area. MMS removed from
the sale proposal a band of blocks offshore the lower Kenai Peninsula
and the Barren Islands, which include critical habitat for the
endangered Stellar sea lion, and areas identified as special by the
Kenai Peninsula Borough. These areas are also used for subsistence by
the residents of Port Graham, Nanwalek, Seldovia and others.
MMS carries out a
comprehensive regulatory program which covers all aspects of the
industry’s drilling procedures. Several requirements are attached to
the sale to supplement these rules, including provisions for
protection of fisheries, biological resources, and use of pipelines to
transport any discovered production. The fishing stipulation requires
companies to work with local fishing groups to avoid conflicts between
exploration equipment and fishing gear.
The sale also offers,
for the first time in the federal waters of Cook Inlet, a package of
economic incentives for industry activity. These include a longer
primary term of eight years, lower minimum bids of $25 per hectare
($10 per acre), annual rental rates of $5 per hectare ($2 per acre),
and royalty suspension volumes. The RSV’s would relieve royalty
payments on a producing lease up to the first 30 million barrels of
oil equivalent. The suspension applies to both oil and natural gas,
and includes price floor and ceiling thresholds for oil. There is no
ceiling or floor for gas at this time.
The south-central area
of Alaska continues to grow and its demand for natural gas is rising.
Cook Inlet has the potential to supply natural gas to the area.
Industries within the Kenai Peninsula Borough rely heavily on oil and
gas reserves, and are an important source of employment and municipal
revenues for the region. Likewise Anchorage depends on Cook Inlet gas
for much of its home heating and electricity generation.
The State of Alaska
holds annual sales onshore in this area, where oil and gas companies
are now exploring. MMS estimates that the offshore potential could
exceed one trillion cubic feet of conventionally recoverable natural
gas. These reserves can contribute an additional option for a
long-term natural gas supply for the south-central region.
Exploratory drilling in Cook Inlet also supports the President’s
National Energy Policy to expand the search
for and development of new sources of energy for the nation while
protecting the environment.
MMS oversees an
extensive, multidisciplinary environmental, social, and economic
studies program that evaluates the impacts of offshore oil and gas
exploration and development on the OCS. Currently MMS has more than
20 planned or ongoing studies applicable to the Cook Inlet planning
area. Ongoing studies include preparation of a sea ice atlas, an
assessment of seabirds, an update of the oil industry labor factors,
continued contribution to the Alaska Marine Mammal Tissues Archival
Project, and a publication of a synthesis on the socio-economic
effects of the oil and gas industry activity on the Alaska OCS. The
University of Alaska Fairbanks is conducting several of the studies
for MMS.
MMS prepared a single
environmental impact statement for both proposed Cook Inlet sales 191
and 199. In preparation for Sale 199, scheduled for May 2006, MMS
will write a consistency determination and either an environmental
assessment or a supplemental EIS. MMS will seek public comment on the
environmental document, which will focus on any new issues that may
arise. All sale proposals will be available for public comment.
To request a copy of the final notice of sale,
write to the Minerals Management Service at 949 East 36th Avenue,
Anchorage, Alaska, 99508‑4302, via email at akwebmaster@mms.gov, or
call toll-free at 1-800-764-2627. The four-volume final EIS is
available in hard copy, on CD-ROM, or on the MMS webpage at
www.mms.gov/alaska. You may also view the Final EIS at libraries
throughout the state.
The Minerals Management
Service is the federal agency in the U.S. Department of the Interior
that manages the nation's oil, natural gas, and other mineral
resources on the federal outer continental shelf. The agency also
collects, accounts for, and disburses mineral revenues from federal
and American Indian leases. MMS disbursed more than $8 billion in
fiscal year 2003 and more than $135 billion since the agency was
created in 1982. Nearly $1 billion from those revenues go into the
Land and Water Conservation Fund annually for the acquisition and
development of state and federal park and recreation lands.
Additionally, the State
of Alaska receives 27% of all revenues generated as a result of
federal leases that lie within 3-to-6 miles offshore the Alaska coast,
and 50% of this money goes into the Alaska Permanent Fund Account.
Relevant Web Sites
MMS Main Website
Alaska OCS Region Website
Media Contacts
Robin Cacy
(907) 271-6070
1-800-764-2627
akwebmaster@mms.gov
MMS: Securing Ocean Energy & Economic Value for
America
U.S. Department of the Interior |