OCS Scientific Committee Meeting Summary - Director’s
Presentation
Dr. Tom Kitsos, Deputy Director, represented Mr. Walt Rosenbusch, the Director of the
Minerals Management Service (MMS). Dr. Kitsos’ explained that although his background
is in the social sciences, he recognizes the importance of natural, physical, and
ecological science research in MMS’s successful management of the valuable OCS
mineral resources. The MMS’s Environmental Studies Program (ESP) and Technology
Assessment and Research Program are integral to the bureau’s resource management
responsibilities and commitments. He stated that he is proud of the fact that over the
years, MMS’s science research has contributed significantly to this Nation’s
scientific knowledge base. The MMS’s environmental research has led to major
scientific discoveries such as the chemosynthetic communities and iceworms in the Gulf of
Mexico and the first comprehensive effort to understand noise impacts on marine mammals.
He extended MMS’s appreciation for the SC’s advice over the years on the array
of environmental and scientific issues facing the bureau.
Ongoing issues.
Natural Gas. Natural gas accounts for about 25 percent of our Nation’s fuel
needs and is expected to remain a critical component of our energy needs well into this
century. Offshore oil and gas production has undergone a steady rise during the
1990’s. Since 1994, oil production in the Gulf of Mexico has increased more than 50
percent with much of this increase coming from huge deepwater fields. Natural gas
production in the Gulf of Mexico has increased only a couple of percentage points because
of the significant increase in gas production from the deep water being mirrored by an
almost similar decline in production from the shallower waters of the shelf. This trend
for natural gas production is likely to continue if other sources are not found. The OCS
now accounts for over 25 percent of the U. S. oil and gas production, and in the case of
oil, is second only to Saudi Arabia as a source of crude for the U. S.
Offshore Activity. The increased activity in the Gulf of Mexico has created scientific
challenges for the MMS: in understanding deepwater technology and the deepwater operating
environment; in emphasizing the need for vigilant attention to safety management systems
and operating practices; and in cooperation and consultation with industry and other
regulators around the world. In California, the MMS’s primary focus has been
maintaining or increasing production from existing platforms in a safe and environmentally
sound manner. However, much attention lately has been focused on the 36 undeveloped
leases. In Alaska, the first subsea pipline plan has been approved for BP’s
Northstar, Liberty, and McCovey projects in the Beaufort Sea. The Gulf of Mexico remains
an area of untapped potential, though somewhat controversial. In all cases, the MMS faces
the challenge of building consensus among its offshore group of stakeholders that range
from environmental and industry interests groups to Native Alaskan, county, state, and
congressional leaders.
Deepwater Royalty Relief. Industry and MMS efforts in deep water Gulf of Mexico have
necessitated an assessment of the potential impact of exploration and development in a new
frontier on the unique and not so unique parts of the environment. One example is the
Floating Production, Storage and Offloading (FPSO) systems which are used in other parts
of the world but have never been employed in the Gulf of Mexico. In light of this
activity, the continuation of incentives for the deepwater Gulf of Mexico will help
support one of our Nation’s energy policy goals. The MMS is proposing two new
Deepwater Royalty Relief rules that continue relief for future sales but adds the
flexibility to tailor relief to what is appropriate for market and cost conditions at the
time of future sales. One rule seeks to sustain the current momentum in deep water
exploration by continuing leasing incentives. The second rule seeks to extend and refine
the case-by-case royalty relief process MMS uses to encourage development of marginally
economic deep water discoveries. Deepwater Royalty Relief could encourage increased oil
and natural gas production by continuing the strong interest in leasing and drilling and
the consequent building of deepwater infrastructure to support increased production.
The Royalty Management Program has been changed to Minerals Revenue Management which is a
part of the MMS’s reengineering initiative. New business processes are projected to
provide cost savings to the Government of about $75 million over 10 years and, in addition
to being more resource efficient, the new processes will reduce business cycle time, or
the time it takes to start and complete tasks, by more than 50 percent.
The Conservation and Reinvestment Act (CARA). CARA would have dedicated OCS revenues
to a variety of conservation programs. This Act had passed in the House but never made it
to the floor of the Senate. Instead, Congress chose to fund many of the CARA programs
through the appropriations processes. On October 11, the President signed a Department of
the Interior (DOI) budget bill that provides unprecedented funding for the conservation of
some of America’s natural resources. The bill secures $12 billion over 6 years to
protect parks, forests, and community green spaces. This bill will more than triple the
current funding for these programs by 2006 and represents a major step toward the goal of
permanent conservation funding. Funding for coastal programs was left to the Commerce
appropriations bill that includes a coastal impact assistance program similar to the one
proposed in the Senate version of CARA. It would place the program in the Department of
Commerce and fund it for only 1 year ($150 million). However, that appropriations bill has
not been sent to the President for signature, so the creation of and funding for a coastal
impact assistance program is still an open issue until the Fiscal Year 2001 budget is
finalized.
The ALVIN Expedition. While MMS research is mission-focused for OCS mineral decisions,
at times it also gets into very basic ocean exploration to gain a better understanding.
The ALVIN Expedition is one good example. The ALVIN is a vehicle being used in a
multi-agency cruise to the deep waters of the Gulf of Mexico. The 17-day journey which
began in mid-October will gather crucial information about marine organisms, such as
tubeworms, mussels, and clams that live in chemosynthetic communities. The main objectives
of the MMS were to look at bottom furrows and observe the deep slope environment on the
lower Sigsbee and Florida Escarpments. These deep-sea ALVIN dives will provide the MMS an
opportunity to better understand the deep water environment and the organisms living on
the bottom of the ocean floor.
Biotechnology. As a growing field, it is no secret that the oceans harbor life forms
with untold potential for commercial and pharmaceutical uses. On September 27, the MMS
announced two new biotechnology research projects dealing with exploring America’s
oceans for health. These 3-year research initiatives to investigate potential
biotechnology opportunities in America’s oceans were entered into with Louisiana
State University and the University of California at Santa Barbara. This effort will
evaluate the taxonomic and genetic biodiversity of benthic species found growing on the
legs of offshore oil and gas platforms. It is MMS’s intent is to screen candidate
organisms for bioactive compounds with pharmaceutical and other commercial applications.
If the man-made offshore oil and gas structures prove to be viable substrate, then this
type of marine bio-harvesting could significantly lessen the need to harvest organisms
from the natural ecosystem. This could help protect the marine habitat as well as provide
a sustainable source for beneficial natural products.
National Oceanographic Partnership Program (NOPP). The MMS continues to be an active
member of the National Ocean Research Leadership Council. The NOPP OCEAN.US office was
officially established on October 25th. This is a significant milestone in a mutual and
collaborative effort among 14 National Ocean Research Leadership Council agencies that
will allow the MMS to deliver an integrated and sustained ocean observing and predicting
capability to the Nation. Creation of the OCEAN.US office required a minimum of four
signatures from members of the National Ocean Research Leadership Council, and MMS is
pleased that Director Rosenbusch's signature was the fourth one; his signature officially
launched the office into existence.
Globalization. Consistent with the trend toward international commerce, today’s
offshore oil and gas industry has become more global. Thus, we find ourselves regulating
the offshore activities in U. S. waters of an international industry and we are often
called upon for our expertise. From Norway to China, and Kazakhstan to Bangladesh,
the MMS has provided scientific and technical information related to offshore oil and gas
and mineral activity. The MMS is a world leader in best practices for regulating the
offshore industry firmly believing that it is in the interest of all concerned – host
countries, the environment, world trade, and the oil industry – to share that
knowledge with countries that have developing oil and natural gas interests. Around the
world the MMS’s proactive approach continues to pay off in a growing recognition of
MMS as a technical expert which will ensure that the U. S. will continue to play a
leadership role in shaping oil and gas development in the 21st century.
5-Year Plan. The MMS is just starting to prepare a new 5-year leasing program for
2002-2007.
In mid-November, the MMS asked for comments that would be used to determine what areas to
include in the plan. The draft proposed 5-year plan will be issued in the spring of 2001.
The program cannot include areas that were administratively withdrawn from leasing by
President Clinton until at least 2012. The areas withdrawn are the North Aleutian Basin
(Alaska), the entire Pacific and Atlantic coasts, and the Eastern Gulf of Mexico outside
the Sale 181 area. Throughout the planning process, the MMS will continue its
consensus-building efforts, listening to stakeholders in conducting the remaining lease
sales scheduled in the 5-year program for 1997-2002, and remaining in close consultation
with interested and affected parties.
Closing Comments.
