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Overview MMS Offshore Alaska Program Getting Back to the Resources AAPL OCS Workshop

Overview MMS Offshore Alaska Program Getting Back to the Resources AAPL OCS Workshop The Woodlands, Texas John Goll U.S. Minerals Management Service January 2004. Today’s Topics. Access Lease Sales Beaufort Sea Cook Inlet Economic Incentives North Aleutian Basin Permitting

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Overview MMS Offshore Alaska Program Getting Back to the Resources AAPL OCS Workshop

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  1. Overview MMS Offshore Alaska Program Getting Back to the Resources AAPL OCS Workshop The Woodlands, Texas John Goll U.S. Minerals Management Service January 2004

  2. Today’s Topics • Access • Lease Sales • Beaufort Sea • Cook Inlet • Economic Incentives • North Aleutian Basin • Permitting • Info Sources

  3. Alaska OCS Potential(Risked, Undiscovered, Conventionally Recoverable)Low to High Estimates • Oil Gas • billions barrelsTCF • Alaska OCS Total 17 - 35 55 - 227 • Chukchi 9 - 25 14 - 154 • Beaufort 4 - 12 13 - 63 • Hope 0 - 0.3 0 - 11 • Norton 0 - 0.2 0 - 9 • Cook Inlet 0.3 - 1.4 0.7 - 2.5 • (MMS 2000 National Assessment)

  4. Access: The OCS 5 Year Plan2002-2007-- Alaska • Traditional Sales • Beaufort Sea • 2003, 2005, 2007 • Cook Inlet • 2004, 2006 • Interest Based Sales • (annual calls) • Chukchi Sea/Hope Basin • Up to 2 sales • Norton Basin • 1 sale

  5. Beaufort Sea Sale 186September 2003

  6. Royalty Suspension volumes/per lease Up to 30 or 45 Million barrels, (depending on Zone A or B) With price floor $18/barrel With price ceiling ($28/barrel 1994 inflation adjusted) Royalty rate 12.5% Primary Term 10 years Minimum bid $15/$10 Rental rate sliding $3 – 12.50/acre (Zone A) $1 – 8/acre (Zone B) Beaufort Sea Economic Incentives

  7. Beaufort Sea

  8. Beaufort Sea Planning Area Oil (billion barrels)Gas (trillion cubic ft) CRR 3.6 - 6.9 - 11.8 12.9 – 32.1 – 63.3 ECR ($18/bbl; $2.11/mcf) 0.0 - 1.8 - 6.6 0.0 – 2.9 – 9.7 ECR ($30/bbl; $3.52/mcf) 1.0 - 3.2 - 7.8 0.6 – 4.2 - 10.7 Beaufort Sea models assume that oil is transported through TAPS and on to West Coast markets. Natural gas produced with oil would be reinjected for enhanced oil recovery until oil depletion and then produced and transported by a future gas pipeline to outside markets. • Request for Information out now – due 1/30 • Next Sale: March 2005

  9. Alaska Permitting • State//MMS MOU • Recent Beaufort Sea permitting successes http://www.dnr.state.ak.us/

  10. Working with the Communities • North Slope Borough • Tribes - Government-to-government • AEWC • Keep communities informed • Visits • Consultation on Projects • Nuiqsut Paisanich:  Nuiqsut Heritage:  A Cultural Plan • In this Place:  A Guide for Those Who Would Work in the Country of the Kaktovikmuit.

  11. Cook Inlet Sale 191 • November 2003 • Letter to Governor • FEIS • Coastal Zone Consistency Determination • PNOS • Defer 2 areas • April 2004 • Final Notice of Sale • May 19, 2004 • The Sale

  12. Cook Inlet Sale 191 Proposed Economic Incentives • Royalty • 12.5% fixed • Royalty Suspension Volume • 30 Million BBls Oil Equivalent (includes natural gas) • with floor & ceiling • Minimum Bid • $10/acre (was $25) • Rental Rate • $2/acre (was $5) • Initial Lease Term • 8 years (was 5 yrs)

  13. Cook Inlet

  14. Cook Inlet Planning Area Oil (billion barrels)Gas (trillions cubic ft) CRR 0.3 - 0.8 - 1.4 0.7 – 1.4 – 2.5 ECR ($18/bbl; $2.11/mcf) 0.1 - 0.4 - 1.0 0.1 – 0.6 – 1.3 ECR ($30/bbl; $3.52/mcf) 0.2 - 0.6 - 1.2 0.5 – 1.0 – 1.7 Cook Inlet models assume oil and gas production is sent to local refineries and markets in Alaska. Sale 191: May 19, 2004 2nd Sale: May 2006

  15. The 5 Year Plan – Chukchi Sea/ Hope Basin – Norton Basin Chukchi • Keeping Options Open • Local Use (?) • Interest approach: • Chukchi/Hope • 2 sales • Local use? • Call #2 – early 2004 • Norton Basin • gas for locals? • Call #3 – early 2004

  16. Chukchi Sea Planning Area Oil (billion barrels)Gas (trillions cubic feet) CRR 8.6 - 15.5 - 25.0 13.6 – 60.1 – 154.3 ECR ($18/bbl; $2.11/mcf) 0.0 - 1.0 - 7.2 not available ECR ($30/bbl; $3.52/mcf) 1.4 - 6.1 - 11.0 not available Chukchi Sea models assume that oil is transported through TAPS and on to West Coast markets. Natural gas was not assessed owing to lack of gas transportation system and availability of known gas reserves close to current facilities at Prudhoe Bay.

  17. Hope Basin Planning Area Oil (billion barrels)Gas (trillions cubic ft) CRR 0.0 - 0.1 - 0.3 0.0 – 3.4 – 11.1 ECR ($18/bbl; $2.11/mcf) 0.0 - <0.1 - 0.1 0.0 – 0.6 – 4.9 ECR ($30/bbl; $3.52/mcf) 0.0 - <0.1 - 0.2 0.0 – 1.5 – 6.0 Hope Basin models assume a local market exists for natural gas.

  18. Norton Basin Planning Area Oil (billion barrels)Gas (trillions cubic ft) CRR 0.0 - <0.1 - 0.2 0.0 – 2.7 – 8.7 ECR ($18/bbl; $2.11/mcf) 0.0 - <0.1 – 0.1 0.0 – 1.0 – 5.0 ECR ($30/bbl; $3.52/mcf) 0.0 - <0.1 – 0.1 0.0 – 1.6 – 6.4 Norton Basin models assume local consumption of gas and gas-products.

  19. North Aleutian Basin • Moratoria • Presidential • [Congressional] • Gas Prone • 7 TCF Mean • 17 TCF (5%) • Oil • 230 MMB Mean • 570 MMB (5%)

  20. Lift Moratoria? Before Consideration: • Congress • Lift appropriations ban • State • Request from Governor • Support in the Communities

  21. Geological Reports Beaufort Sea Chukchi Sea Norton Basin Gulf of Alaska Summary packages Beaufort Sea Chukchi Cook Inlet Norton Basin MMS Geological Information http://www.mms.gov/alaska/ref/akref.htm

  22. Technology and Assessment Program engineering and oil spill response Environmental Studies Program University of Alaska CMI Marine Minerals Technology Center Walrus haulout MMS Research Monitoring

  23. DOI/State/UAA • Whatever Information you need on resources • Moving to UAA Library this summer http://www.arlis.org

  24. Upcoming MMS OCS Saleswww.mms.gov/alaska/907-271-6010 • Cook Inlet 191 • May 19, 2004 • Beaufort Sea 195 • March 2005 Alaska DNR: www.dnr.state.ak.us/ BLM Alaska: www.ak.blm.gov/ MMS

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