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Notice

Outer Continental Shelf (OCS), Alaska Region, Chukchi Sea/Hope Basin

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Call for information and nominations (Call).

SUMMARY:

The Secretary's decision to consider offering the Chukchi Sea/Hope Basin planning area in the OCS Oil and Gas Leasing Program for 2002-2007 provides for an 18-month “special-interest” process beginning with publication of this Call. Based on the information and specific nominations received as a result of this Call, a decision will be made whether to proceed with a sale.

DATES:

Nominations and comments on the Call must be received no later than 90 days after publication of this document in the Federal Register.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Please call Tom Warren at (907) 271-6691 in MMS's Alaska OCS Region.

End Further Info

SUMMARY INFORMATION:

The objective of this “special-interest” leasing option is to foster exploration in a frontier OCS area of potential, but high economic cost, without investment of the considerable time and effort required for holding a typical lease sale. The general approach is to query industry regarding the level of interest in proceeding with a sale in the Chukchi Sea/Hope Basin where we would expect to offer focused areas of specific interest for exploration and to request nominations of such areas. However, we will proceed based on the comments and information we do receive. The lease sale is proposed to pursue the high resource potential of the Chukchi Sea area in conjunction with potential natural gas resources that may extend into the adjacent Hope Basin area. Comments are also being requested from the general public on this special-interest leasing process, including the terms and conditions of a sale. The MMS will consider all comments and nominations in the decision on whether and where within the Chukchi Sea/Hope Basin to proceed with leasing and on the terms and conditions of a lease sale proposal. A decision to offer a nominated area for leasing will be conditioned on an informal commitment from industry to explore the area leased within a specific time period.

This Call does not indicate a preliminary decision to lease in the area described below. If MMS decides to proceed with the sale process, MMS will make the final decision on the specific areas for possible leasing at a later date in the presale process and in compliance with the 5-year program and with applicable laws including all requirements of the National Environmental Policy Act (NEPA) and OCS Lands Act (OCSLA). The MMS may adjust the dimensions of a nominated area after discussions with the nominating company.

Call for Information and Nominations

1. Authority

This Call is published pursuant to the OCSLA, as amended (43 U.S.C. 1331-1356, (1994)), and the regulations issued thereunder (30 CFR part 256 and 30 CFR part 260); and in accordance with the OCS Oil and Gas Leasing Program 2002-2007, approved June 27, 2002.

2. Purpose of Call

The purpose of the Call is to gather preliminary information, to request nomination of specific areas of interest to industry, and to request comments on the terms and conditions of offering these special interest lands. The Call also serves to initiate public outreach to assist in preparation of the NEPA analysis for this proposal. This proposal is in keeping with section 102(9) of the OCSLA Amendments of 1978, which states as a purpose of the statute, “to insure that the extent of oil and natural gas resources of the Outer Continental Shelf is assessed at the earliest practicable time.” The objective of the “special-interest” leasing process is to encourage exploration in a frontier OCS area for the discovery of oil and gas. This area might contain natural gas for potential use in local communities, as well as oil to meet national energy needs. The sale would offer for lease both oil and gas.

Comments, information, and nominations on oil and gas leasing, exploration, and development and production within the Chukchi Sea/Hope Basin are sought from all interested parties. Comments are also being sought on the terms, conditions, and economic incentives of a sale in the Chukchi Sea/Hope Basin. Industry and other interested parties are strongly encouraged to contact the Alaska OCS Region with questions or to discuss interest in the area. This early planning and consultation step is particularly important to this special interest process. The MMS will base its decision on whether to proceed with the presale process and the terms and conditions of a sale on the nominations and other information received in response to this Call. This process will ensure a decision that considers the concerns of all respondents in future decisions in this leasing process pursuant to the OCSLA and regulations at 30 CFR parts 256 and 30 CFR part 260. Commenters are also encouraged to submit comments and suggestions on the “special-interest” leasing process in general.

This Call is being issued in accordance with the OCS Oil and Gas Leasing Program 2002-2007, approved June 27, 2002. The program offers two sales in the Chukchi Sea/Hope Basin during the 5-year program. If no interest is expressed in response to this first Call, MMS will defer the sale for one year and reissue the Call the following year. This process will continue throughout the 5-year program until there is sufficient interest to proceed Start Printed Page 14426with the planning steps toward a sale. No more than two rounds of lease issuance in the Chukchi Sea/Hope Basin would occur during this 5-year program.

3. Description of Area

The area subject to this Call is located offshore the State of Alaska in the Chukchi Sea, between Cape Krusenstern and Point Barrow. The Chukchi Sea area consists of approximately 6,155 whole and partial blocks (about 13.8 million hectares or 34 million acres). It extends offshore from about 10 to approximately 200 miles in water depths from about 32 feet to approximately 230 feet. A small portion of the northeast corner of the area drops to approximately 3,000 feet. The Hope Basin area consists of approximately 1,243 whole and partial blocks (about 2.6 million hectares or 6.5 million acres). It extends offshore from about 3 to approximately 110 miles in water depths from about 32 feet to approximately 230 feet.

A page size map of the area accompanies this Notice. A large scale Call map showing the boundaries of the area on a block-by-block basis is available without charge from the Public Information Office at the address given below, or by telephone request at (907) 271-6438 or 1-800-764-2627. Copies of Official Protraction Diagrams (OPDs) are also available for $2 each.

Alaska OCS Region, Minerals Management Service, 949 East 36th Avenue, Room 308, Anchorage, Alaska 99508-4302, akwebmaster@mms.gov.

4. Instructions on Call

The Call for Information map and indications of interest and/or comments must be submitted to the Regional Supervisor, Leasing and Environment, at the above address.

The Call map delineates the area that is the subject of this Call. Respondents are requested to indicate very specific areas of interest in and comment on the Federal acreage within the boundaries of the Call area that they wish to have included in a proposed sale in the Chukchi Sea/Hope Basin.

If you wish to comment, you may submit your comments by any one the following methods:

  • You may mail comments to the Alaska OCS Region, Minerals Management Service, 949 East 36th Avenue, Room 308, Anchorage, Alaska 99508-4302.
  • Comments may be submitted directly from the Internet at http://www.mms.gov/​alaska. Please submit Internet comments as an ASCII file avoiding the use of special characters and any form of encryption. Please also include “Attn: Comments on Call for Information and Nominations for Proposed 2004 Lease Sale in the Chukchi Sea/Hope Basin” and your name and return address in your Internet message.
  • Finally, you may hand-deliver comments to the Alaska OCS Region, Minerals Management Service, 949 East 36th Avenue, Room 308, Anchorage, Alaska.

Our practice is to make comments, including names and addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their address from the rulemaking record, which we will honor to the extent allowable by law. Under certain circumstances we can withhold a respondent's identity, as allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety.

A. Areas of Interest to the Oil and Gas Industry. Industry must be candid and very specific regarding the areas they nominate if this process is to succeed. The purpose of this process is to identify focused areas where industry has a significant interest in exploration. Nominations covering large-scale areas will not be helpful in defining these areas.

Nominations must be depicted on the Call map by outlining the area(s) of interest along block lines. Nominators are asked to submit a list of whole and partial blocks nominated (by OPD and block number) to facilitate correct interpretation of their nominations on the Call map. Although the identities of those submitting nominations become a matter of public record, the individual nominations are proprietary information and will not be released to the public. The telephone number and name of a person to contact in the nominator's organization for additional information should be included in the response. This person will be contacted to set up a mutually agreeable time and place for a meeting with the Alaska OCS Regional Office to present their views regarding the company's nominations.

B. Terms, Conditions, and Economic Incentives Pertaining to Lease Issuance. Respondents are requested to comment on the terms, conditions, and economic incentives pertaining to lease issuance for any leases that may be issued as a result of a sale in the Chukchi Sea/Hope Basin. The MMS is aware of the lack of infrastructure and distance from shore to some of the blocks in this area and will consider these factors in designing any incentives. The following are being considered for use in this sale:

—Lease term of 10 years

—Submission of an exploration plan within 8 years of lease issuance

—Economic incentives structured similar in form to those contained in the Proposed Notice of Sale for Beaufort Sea Sale 186 (68 FR 8306, February 20, 2003). Incentives proposed for Beaufort Sea Sale 186 are:

—Royalty suspension volumes (RSV) for oil production (with possible consideration for gas)

—Subject to a price floor per barrel below which oil production that is royalty free does not count against the RSV

—Price ceiling per barrel above which production must bear full royalties

C. Relation to Coastal Management Plans. Comments also are sought on potential conflicts with approved local coastal management plans (CMP) that may result from the proposed sale and future OCS oil and gas activities. These comments should identify specific CMP policies of concern, the nature of the conflicts foreseen, and steps that MMS could take to avoid or mitigate the potential conflicts. Comments may be in terms of broad areas or restricted to particular blocks of concern. Commenters are requested to list block numbers or outline the subject area on the large-scale Call map.

5. Use of Information From Call

Information submitted in response to this Call will be used for several purposes. We will use responses to:

—Determine whether to proceed with a competitive oil and gas lease sale in the Chukchi Sea/Hope Basin

—Identify specific areas of interest for oil and/or gas exploration and development

—Identify environmental effects and potential use conflicts

—Assist in the public outreach for the environmental analysis

—Develop possible alternatives to the proposed action

—Develop lease terms and conditions and mitigating measures

—Identify potential conflicts between oil and gas activities and the Alaska CMP

6. Existing Information

An extensive environmental, social, and economic studies program has been Start Printed Page 14427underway in the Alaska OCS Region since 1976, including studies in this area. The emphasis has been on geologic mapping, environmental characterization of biologically sensitive habitats, endangered whales and marine mammals, physical oceanography, ocean-circulation modeling, and ecological and socio-cultural effects of oil and gas activities.

The MMS has had two past sales in the Chukchi Sea area. In May 1998, Sale 109 was held and resulted in 350 leases being issued. In August 1991, Sale 126 was held and resulted in 28 leases being issued. There were four exploratory wells drilled, but all have been permanently plugged and abandoned. All 378 leases have since been relinquished or have expired. For the Chukchi Sea Planning Area, it is estimated that undiscovered conventionally recoverable resources are 15.46 billion barrels of oil and 60.11 trillion cubic feet of gas. No lease sales have been held in the Hope Basin area. For the Hope Basin Planning Area, it is estimated that undiscovered conventionally recoverable resources are 0.09 billion barrels of oil and 3.38 trillion cubic feet of gas.

Information on the studies program, completed studies, and a program status report for continuing studies in this area may be obtained from the Chief, Environmental Studies Section, Alaska OCS Region, by telephone request at (907) 271-6577, or by written request at the address stated under Description of Area. A request may also be made via the Alaska Region Web site at akwebmaster@mms.gov.

7. Tentative Schedule

If MMS receives specific nominations from industry in response to this Call and decides to proceed with the pre-sale process, the following is a list of tentative milestone dates applicable to a Chukchi Sea/Hope Basin sale in 2004:

Tentative process milestones for proposed 2004 Chukchi Sea/Hope Basin Sale
Call published/public outreach initiatedMarch 2003.
Comments due on CallJune 2003.
Decision whether to proceed/Area IdentificationJuly 2003.
NEPA analysisJanuary 2004.
Consistency Determination/Proposed Notice of SaleApril 2004.
Governor's Comments dueJune 2004.
Final Notice of Sale publishedAugust 2004.
SaleSeptember 2004.
Start Signature

Dated: March 19, 2003.

R.M. “Johnnie” Burton,

Director, Minerals Management Service.

End Signature End Preamble

[FR Doc. 03-7009 Filed 3-24-03; 8:45 am]

BILLING CODE 4310-MR-P