MMS working on economic ecosystem

Kristen Nelson

Petroleum News Editor-in-Chief

The Department of the Interior’s Minerals Management Service has a role to play in the nation’s energy web, with substantial production from federal oil and gas leases in the Gulf of Mexico and the agency’s first Alaska production from the portion of Northstar on federal leases, the agency’s Alaska regional director, John Goll, told the Resource Development Council for Alaska’s annual conference in Anchorage Nov. 21.

MMS held its first lease sale in the Beaufort Sea in five years in September, Goll said. It had been warned by industry two years ago when planning began that companies might not bid because of an agency history of undependable sales, but Goll said MMS kept the sale on schedule and also offered incentives for the first time in the Beaufort Sea — and companies did bid. Incentives had been offered in the Gulf of Mexico, “and for the first time we got the OK from Washington, D.C., to try some of those ideas up here in Alaska.” The challenge now is to work with other agencies to facilitate permitting for exploration, he said.

Goll said MMS remains committed to working with the communities on the North Slope, and has been able to put on its web page guides, prepared by the communities of Nuiqsut and Kaktovik, to working with those communities. “If you want some understanding on how to work on the North Slope with these communities,” he said, take a look at those documents.

MMS announced proposed incentives for its upcoming Cook Inlet oil and gas lease sale Nov. 19, Goll said, with royalty suspensions, lower minimum bid and rent, and an extended lease (see story in Nov. 23 issue of Petroleum News).

In other areas, Goll said, “we see our role as keeping options open around the Alaska coast.” In the Norton basin and Chukchi Sea, MMS will continue to ask for industry interest, and offer sales when there is interest. In the Bristol Bay area, which MMS considers to be gas prone, Congress has removed the ban preventing MMS from spending money to support a lease sale, but the area is closed by presidential order. Goll said MMS would need a request from the governor to study lifting the Bristol Bay ban. But, he noted, MMS is locked into a five-year lease sale plan which runs through 2007 — and which does not include a sale in Bristol Bay.