OCS impact assistance program moves ahead

Implementation of the federal coastal impact assistance program for outer continental shelf oil and gas producing states is moving forward. The program, established as part of the 2005 Energy Policy Act, will disburse $250 million of federal funds in each fiscal year 2007 to 2010 among six qualifying states, Alabama, Alaska, California, Louisiana, Mississippi and Texas. Allocation of funds between those states will depend on the relative amount of OCS revenue generated offshore of each state, but will be subject to a minimum per state of 1 percent of total funds.

States and specified political subdivisions within the states will be able to apply to the U.S. Minerals Management Service for grants from the funds for projects that relate to the impacts of OCS activities, certain types of environmental protection and the operation of the coastal impact assistance program itself.

MMS has told Petroleum News that it anticipates being able to accept grant applications after May 7, 2007. But grant eligibility within a state depends on MMS approving a coastal impact assistance plan from that state — eligible entities will not be able to apply for grants until the entity’s overall state plan has been submitted and approved.

Randy Bates, director of Alaska’s Office of Project Management and Permitting, told Petroleum News March 8 that OPMP is still drafting Alaska’s coastal impact assistance plan.

“We’re still in the drafting stage. We’re still in the discussion stage,” Bates said.

Bates said that the state will be soliciting ideas for projects, for incorporation into the plan, and that the plan will be submitted to MMS in time to enable applications for 2007 grants.

“We’re not in jeopardy of losing funds,” Bates said.

The coastal impact assistance program addresses a long-standing controversy regarding the impact of OCS oil and gas development on coastal communities. Alaska’s North Slope Borough, for example, has in the past expressed concern that an offshore industry would disrupt North Slope communities without bringing benefits — communities would have to deal with any impacts on subsistence hunting, for example, but the borough would not be able to collect property taxes for outer continental shelf industrial facilities.

Further information about the Coastal Impact Assistance Program can be found in the MMS Web site at www.mms.gov/offshore/CIAPmain.htm.

—Alan Bailey