Beveridge & Diamond
 

Interior Secretary Issues New Five-Year Oil and Gas Leasing Plan for the Outer Continental Shelf

Beveridge & Diamond, P.C., May 3, 2007

The Outer Continental Shelf (OCS) Lands Act, 43 U.S.C. § 1344, requires the Secretary of the Interior to establish a schedule of OCS lease sales establishing the “size, timing, and location of leasing activity which he determines will best meet national energy needs for the five-year period following its approval....”  The Minerals Management Service (MMS) has been developing a new plan with input from affected states and local interests, and extensive NEPA review.

On April 30 Secretary Kempthorne sent his proposed final OCS leasing plan for 2007-2012 to Congress for the statutorily-prescribed 60-day review period.  Unless Congress blocks the plan it would go into effect July 1.  The first lease sale under the new plan would be held in the Western Gulf of Mexico later this year.

What’s New?

Presidential withdrawals and congressional moratoria have prohibited leasing on the OCS offshore of the West Coast, East Coast and much of Florida for many years.  Therefore, recent five-year plans have scheduled lease sales only in the central and western Gulf of Mexico and offshore limited areas of Alaska.  The 2007-2012 five-year plan includes lease sales in these same areas, including an expanded area offshore of Alaska resulting from recent modifications to the Presidential withdrawal/ congressional moratorium.  In addition, in the Gulf of Mexico Energy Security Act of 2006, Congress directed MMS to lease certain areas in the eastern Gulf of Mexico more than 125 miles offshore Florida.  The new plan would provide for the first lease sale in this area in 2008. 

Finally, the new five-year plan includes a scheduled lease sale in 2011 offshore of Virginia.  This proposed sale is highly controversial and only could occur if both the President and Congress act to modify the existing prohibitions on leasing in this area.  The State has expressed an interest in natural gas production off its shores, but remains opposed to any oil development.  One possible incentive for Virginia would be the opportunity to share in the revenues from OCS leasing off its coast similar to what Congress provided for four Gulf of Mexico states in the 2006 Energy Security Act.

MMS published a Notice of Availability for the five-year program and its final Environmental Impact Statement on May 2, 2007.  72 Fed. Reg. 24326.  The complete five-year program is available online at http://www.mms.gov/5-year/.

For more information, please contact Peter Schaumberg at pschaumberg@bdlaw.com, or (202) 789-6043.

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