Reps. Ed Markey (D-MA), Chairman of the House Select Committee on Energy Independence and Global Warming, and Chris Van Hollen (D-MA) introduced a bill this week, the "Royalty Relief for Consumers Act of 2010," that seeks to recover up to $54 billion from companies producing in deep waters in the Gulf of Mexico between 1996 and 2000, effectively overturning the Fifth Circuit's decision in Dep't of Interior v. Kerr-McGee, which was recently denied cert by the Supreme Court. The House has approved similar versions of the bill in 2006, 2007 and 2008, but it has yet to be enacted into law.
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MMS has confirmed remarks made by an MMS regional director last week at an industry-only offshore drilling workshop in Texas that the agency plans to wait until at least 2012 to issue any oil and gas drilling leases for the proposed Lease Area 220 offshore Virginia. The Bush Administration's five-year plan had called for the lease of 3 million acres approximately 50 miles offshore Virginia in November 2011. Secretary of the Interior Ken Salazar has said that he will decide this summer whether the Bush Administration's plan will be implemented. Virginia Governor Bob McDonnell wrote Salazar a letter in December 2009 urging MMS to move forward with the Virginia leasing plan. Lease Area 220 is thought to hold 130 million barrels of oil and 1.14 trillion cubic feet of natural gas. In response to the MMS decision, an American Petroleum Institute spokeswoman commented that "this just demonstrates what remains a pattern with the Salazar Interior Department. Delay, delay, delay."
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U.S. Secretary of the Interior Ken Salazar said Monday that he considers the permitting process used to analyze the Cape Wind offshore wind proposal planned for offshore Massachusetts a "laboratory for us to learn" about offshore renewable energy. Speaking further at a Platts Energy Podium event, Secretary Salazar reiterated his previous comments that the outcome of the Cape Wind regulatory review process would not be "determinative" for the future of offshore wind in the United States. Platts Inside Energy Extra [subscription required] offers additional details.
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Secretary of the Interior Ken Salazar announced yesterday that DOI will begin reviewing proposals to conduct seismic studies of the Atlantic OCS. According to statements by Salazar at yesterday's Platts Energy Podium, Interior will open a 45-day public comment period this Thursday, January 27, on the environmental impact of the proposed studies, which will then be used in reviewing specific seismic study proposals. Seismic studies are an important first step in considering oil and gas exploration off the Atlantic coast. In a related development, Salazar also pledged broader reforms of leasing programs, suggesting that royalty rates for onshore oil and gas leases may be increased. The Houston Chronicle has more details.
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On January 25, MMS published a notice in the Federal Register that it is seeking to revise the original Finding of Adverse Effect relating to the Cape Wind project in order to add five properties that are eligible for inclusion in the National Register of Historic Places. This Revised Finding is part of the ongoing Section 106 consultation process pursuant to the National Historic Preservation Act. Comments regarding this revision are due by February 12.
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A report released this week by Securing America’s Future Energy concludes that opening the eastern Gulf of Mexico to oil and gas exploration and production would not affect U.S. military operations in the area. Senator Byron Dorgan (D-ND) touted the report to Oil & Gas Journal, saying that its conclusions support his legislation that would open the eastern Gulf of Mexico to oil and gas E&P. Responding to the report, Sen. Bill Nelson released a statement opposing expanding E&P activities in the eastern Gulf, noting that the Pentagon has said that E&P is incompatible with military training operations in the area.
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The MMS announced that Mary Katherine Ishee has been appointed deputy director. Ms. Ishee will "assist MMS Director Liz Birnbaum in the administration of programs that ensure the effective management of energy resources located on the OCS - including the development of offshore renewable energy - and the environmentally safe exploration, development, and production of oil and natural gas." Ms. Ishee's background includes both public and private positions, including serving as Counsel to the Senate Committee on Energy and Natural Resources.
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The Interior Department announced on January 15 that Sec. Salazar has invited the governor of each Atlantic coastal state from Maine to Florida to an offshore wind summit to discuss "how to support and coordinate the development of this new industry." The February 19 meeting will "provide an opportunity for us to exchange ideas and chart a course forward to advance further development." The announcement of this summit comes on the heels of the January 13 Cape Wind meetings in Washington. Platts Inside EnergyEXTRA [subscription required] provides more details.
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California Gov. Arnold Schwarzenegger (R) has suggested that royalties from offshore production in California state waters could help pay for the state's park system. The Santa Maria Times reports that this budget initiative was proposed last year but was not adopted by the state legislature.
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Speaking to reporters and media interests, including the Offshore Energy Law Blog, following today's consultations concerning the Cape Wind offshore energy project in Nantucket Sound, U.S. Secretary of the Interior Ken Salazar said that he does not view whether or not the Cape Wind project is built as determinative for the U.S. offshore wind industry. Salazar also highlighted two difficult challenges facing the project: impacts on cultural and archeological resources and impacts on the view sheds from land. The Secretary confirmed that if Cape Wind decides to move its proposed wind farm to a different location, then the company would have to file a new application with MMS for the project.
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On Wednesday, January 13, Interior Secretary Ken Salazar will host a series of meetings in Washington, D.C. relating to the Cape Wind project. These meetings, which are convened pursuant to the National Historic Preservation Act, will bring together interested parties to consider the National Park Service's finding that the site of the proposed Cape Wind offshore wind farm is eligible for listing in the National Register of Historic Places.
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Following a statutorily-mandated review of the maximum daily civil penalty for violations of regulations governing oil and gas operations on the OCS, MMS determined that no adjustment is necessary and that the current maximum penalty of $35,000 per violation per day will remain unchanged. The Outer Continental Shelf Lands Act requires MMS to measure these penalties against the Consumer Price Index every 3 years to ensure they are keeping up with inflation. The current rate has been in effect since February 28, 2007.
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On January 7, MMS released the latest issue of Ocean Science, its science and technology journal. Among other things, the issue includes articles on coastal and marine spatial planning, offshore oil and gas leasing, and a story on the Interagency Ocean Policy Task Force's Interim Report. To view the publication, click here.
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On January 7, MMS released the latest issue of Ocean Science, its science and technology journal. Among other things, the issue includes articles on coastal and marine spatial planning, offshore oil and gas leasing, and a story on the Interagency Ocean Policy Task Force's Interim Report. To view the publication, click here.
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In response to petitions by two Massachusetts Indian tribes, the National Park Service (NPS) has determined that the site of the proposed Cape Wind offshore wind farm is eligible for listing on the National Register of Historic Places, further delaying development of the nation’s first planned offshore wind farm. NPS found that Nantucket Sound, where the proposed 24 square-mile wind farm would be erected, is vital to the tribes’ cultural and religious practices. The tribes are concerned that the land beneath the Sound may contain submerged ancestral burial grounds and that the view across the Sound is a culturally significant vantage point for watching the rising sun and nighttime sky.
NPS’s decision will not prevent construction of the controversial wind farm, but it could result in significant delays and may help form a legal argument against the project by the tribes and other vocal opponents. In response to NPS’s decision, Department of the Interior Secretary Ken Salazar pushed to move the project forward by ordering the NPS and the project's developer, Energy Management Inc., to negotiate and reach a compromise by March 1, 2010. Sec. Salazar, who has the authority to decide the project’s future himself, stated: “If an agreement among the parties can’t be reached, I will be prepared to take the steps necessary to bring the permit process to conclusion.” The New York Times provides additional coverage of this story.
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The Oregonian reports that earlier this month a three-year moratorium on oil and natural gas exploration and production in Oregon state waters expired. A number of environmental groups are requesting that the state legislature reinstitute the moratorium or impose a permanent ban on E&P activities when its session begins in February.
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Yesterday Massachusetts released the final version of its Ocean Management Plan that provides for marine spatial planning in Massachusetts state waters. The plan allows for offshore wind turbines near Nantucket and Martha’s Vineyard but protects certain environmentally sensitive areas from commercial development. Read more in the Cape Cod Times.
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