Transcript Energy Consumption

2012 AAPL ANNUAL MEETING SPONSORS
PLATINUM
GOLD
SILVER
BRONZE
SAN FRANCISCO SEMINAR
A wholly owned subsidiary of ExxonMobil
GOLF
Leasing,
Permitting, and
Operating in the
OCS –
J. Keith Couvillion
58th Annual Meeting
San Francisco
June16, 2012
“The New Normal”
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OCS – The New Normal
OUTINE
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Energy Outlook
Deepwater Horizon Event
BOEM and BSEE Organizational Structure
5-Year Leasing Programs
National Environmental Policy Act (NEPA)
Offshore Plan and Permitting
Regulations, Legislation and Litigation
Endangered Species Act/Marine Mammal Protection Act
Trans-boundary Resource Treaty
National Oceans Policy
Marine Protected Area Expansion
Law of the Sea Treaty Ratification
Questions
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Energy Information
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Worldwide Energy Consumption is Projected to Rise
Source : EIA
Energy Consumption
U.S. Primary Energy Use By Fuel
Source: EIA
The Deepwater Horizon Event
The offshore “Event” that changed an Industry
An explosion and fire occurred on the Deepwater Horizon on
April 20, 2010 in the US Gulf of Mexico, about 52 miles
southeast of Venice, LA. The Horizon was engaged in drilling
activity on behalf of BP located on Mississippi Canyon Block
252. The Deepwater Horizon sank on April 22, 2010 in nearly
5,000 ft of water. As a result of this incident 11 individuals
lost their lives.
Source: BP 9
Horizon Incident - Industry Impact
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April 20, 2010 – Beginning of a major change in the Oil
and Gas Industry
May 27, 2010 – Secretary Salazar issues report entitled
“Increased Safety Measures for Energy Development on
the Outer Continental Shelf” (Buffalo Report)
May 30, 2010 – Imposed a Moratorium on all Drilling of
Deepwater Wells
July 12, 2010 – Secretary Salazar issues 2nd Moratorium
until November 30th
October 12, 2010 – 2nd Moratorium is lifted
January 12, 2011 - National Commission on the BP
Deepwater Horizon Oil Spill and Offshore Drilling - Report
Issued
February 28, 2011 – First post-disaster deep water drilling
permit approved (Noble Energy)
Collateral Damage
– OCS Lease Sale 215 (Western Gulf of Mexico)
Cancelled
– OCS Lease Sale 220 (Virginia) Cancelled
– Alaskan Drilling Permits Deferred
– Lease Sale 218 (Western GOM) and Sale 216/222
Deferred (Central GOM)
– Delays in plan and well permit approvals
The President’s Commission & Task Force
 National Commission on the BP Deepwater Horizon
Oil Spill and
Offshore Drilling – Presidential Executive Order dated May 21, 2010
• The Commission was co-chaired by Senator Bob Graham and former EPA Administrator
William K. Reilly. The other Commissioners were Frances Beinecke, Donald Boesch, Terry
Garcia, Cherry Murray, and Frances Ulmer
• The final report was issued on January 12, 2011
Recommendations:
 Independent Safety Administration
 Bring offshore regulations and information into the 21 st century
 Need proactive, risk-based, regulatory and environmental analysis per location
 Most of the money from restoration be applied to Gulf of Mexico
 State Department engage other countries with Arctic environments
 Industry pay for independent safety administration with money paid out from
leases
• Liability and Compensation Requirements under Oil Pollution Act – Staff Report No. 10
• NEPA and OCS Oil and Gas Activity – Staff Report No. 12
• A New Approach to Risk Assessment and Management – Staff Report No. 21
• Chief Counsel Report issued in March 2011
 Gulf Coast Ecosystem Restoration Task Force - Presidential Executive Order dated October 5,
2010
New Regulations Issued
 Drilling Safety Rule – Issued as Interim
Final Rules on October 14, 2011
 Workplace Safety Rule (Safety and
Environmental Management Rule –
SEMS) – Issued as a Interim Final Rule
on October 15, 2011. Final rule
pending
 SEMS 2 Draft Rule Published Sept. 13,
2011 – Comments were due on Nov.
14, 2011. Final rule pending.
 Directed Final Rule – Regulatory
Authorities between Agencies
(Effective October 1, 2011)
 No new rules have been published on
Blow Out Preventer (BOP) equipment
or Oil Spill Response
Industry Engagement
Joint Industry Task Forces/Committees
 Offshore Equipment
 Operating Procedures
 Well Intervention and Containment
 Oil Spill Preparedness and Response
 Center for Offshore Safety
 Offshore Issues Subcommittee
• State & Federal Agency Advocacy
• Administrative Regulatory Rulemaking Commenting
Well Containment
Marine Well Containment Company
 10 Members (Chevron, ExxonMobil,
Shell, ConocoPhillips, etc…)
 Rapid response system available to
capture and contain oil in the event of a
potential underwater well blowout
 The system will be flexible and able to
begin mobilization within 24 hours and
can be used on a wide range of well
designs and equipment, oil and natural
gas flow rates and weather conditions.
 The interim system (15,000 psig
Helix Well Containment Group
capping stack) is engineered to be used  22 Members
in deepwater depths up to 10,000’ and  Operate in up to 8,000 feet of water
have initial capacity to contain 60,000  10,000 & 15,000 psig capping stacks
barrels & 120 MMCFG per day with  Intervention equipment to cap and contain a
well
potential for expansion.
 Capture and process 55,000 BOPD & 95
MMCFPD
Miscellaneous Risks & Opportunities
 Certain Operators cannot meet new OCS operating standards
 New mandated liability coverage (e.g. Insurance, bonding, etc…)
 AFE/Project approval are delayed as a result of enhanced partner engagement
 New operating agreement contract provisions
 Ocean Policy (Coastal and Marine Spatial Planning - CMSP)
 New equipment & oil spill response regulations
 Ongoing Gulf of Mexico research
16
“The New Normal”
Rebuilding government
confidence
Assurance that future
incidents will be minimized
Greater worker and
environmental safety
(Personal and Process
Safety)
Enhanced well containment
and spill response
Minerals Management Service (MMS)/Bureau
of Ocean Energy Management, Regulation
and Enforcement (BOEMRE)/Bureau of
Ocean Energy Management (BOEM) and
Bureau Safety and Environmental
Enforcement (BSEE) Reorganization/
Organizational Structure
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Government Reorganization
Secretary of Interior Order No. 3299 Sec. 1 (July 14, 2010)
“The purpose of this Order is to separate and reassign the responsibilities that
had been conducted by the Minerals Management Service into new
management structures that will improve the management, oversight, and
accountability of activities on the Outer Continental Shelf; ensure a fair return
to the taxpayer from royalty and revenue collection and disbursement
activities; and provide independent safety and environmental oversight and
enforcement of offshore activities.”
 BOEM (Bureau of Ocean Energy Management)
 BSEE (Bureau of Safety and Environmental Enforcement)
 ONRR (Office of Natural Resources Revenue)
Bureau of Ocean Energy Management (BOEM)
“The mission of the BOEM is to foster environmentally responsible and
appropriate development of the Outer Continental Shelf for both conventional
and renewable energy and mineral resources in a manner that is efficient and
effective, and that ensures the American people receive fair market value for the
rights conveyed.”
_______________________________
 Resource Manager on the Outer Continental Shelf
 Primary Contact for the Public (including coastal states)
interested in energy uses of the Federal Offshore Estate
 Headed by a Director (Tommy P. Beaudreau) under the
supervision of the Assistant Secretary for Land and
Minerals Management
Bureau of Safety and Environmental Enforcement (BSEE)
“The mission of the BSEE is to promote and enforce safety in offshore energy
exploration and production operations and assure that potential negative
environmental and other impacts on marine ecosystems and coastal communities are
appropriately considered and mitigated.”
_________________________
 BSEE will apply independent regulation, oversight, and
exercise enforcement powers
 Including necessary engineering and safety reviews,
inspecting operations for compliance, approving spill
response plans, and reviewing NEPA compliance activities.
 Headed by a Director (Michael Bromwich) under the
supervision of the Assistant Secretary for Land and
Minerals Management.
Office of Natural Resource Revenue (ONRR)
“The mission of the ONRR is to ensure the full and fair return to the American
people of royalties and other monies owed for the utilization of public
resources in the production of conventional and renewable energy and mineral
resources both onshore and in the OCS.”
___________________
ONRR reports to the Deputy Assistant Secretary for Natural Resources
Revenue Management and Oversight within the Office of the Assistant
Secretary for Policy, Management and Budget who reports to Deputy Secretary
who reports to the Secretary of Interior
Perform a variety of critical functions:
• Transparent and robust collections of royalties, rents, fees, and
other revenues onshore and offshore
•
Auditing of industry in compliance with the
terms of each lease
•
Enforcement against violators, cooperate with criminal
investigations and prosecutions, and assessment of civil and criminal
penalties.
•
Asset Management and development of regulations with respect to
revenue valuation and collection and enforcement activities.
5-Year Leasing Programs
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United States - Exclusive Economic Zone
(3 Billion Acres – 4.1 Million Sq. Miles)
Source: DOI
Federal Offshore Acreage
Available Acreage – 1.76 Billion
(Lower 48 States and Alaska)
 Acreage Leased – 40
Million
 Percent Leased - 2.3%
Offshore Jurisdiction
Source: Dept. of Interior
OCS Regions & Planning Areas
Atlantic Region
Acres in Region 265,348,686
Active Leases
0
Acres Leased
0
Wells Drilled
46
Platforms
0
Pacific Region
Acres in Region 248,458,455
Active Leases
49
Acres Leased
241,023
Wells Drilled
13,348
Platforms
23
Alaska Region
Acres in Region
Active Leases
Acres Leased
Wells Drilled
Platforms
1,084,461,757
670
3,723.389
84
0
Gulf of Mexico Region
Acres in Region
Active Leases
Acres Leased
Wells Drilled/Permitted
Platforms
159,387,771
5,841
31 Million+
50,000+
3,132
2007-2012 5-Year Leasing Program
 Revised 5-Year Leasing Program Published on December 23, 2010
Remaining Sales in 2007-2012 Leasing Program
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Sale 216 - Central GOM
Sale 218 - Western GOM
Sale 219 - Cook Inlet
Sale 220 - Mid-Atlantic
Sale 222 - Central GOM
2011 (Combined with 222)
2011 (4Q -2011/ 1Q-2012)
2011 (Cancelled)
2011 (Cancelled)
June 20, 2012
 2007-2012 5-Year Leasing Program Expires on June 30, 2012
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2012-2017 5-Year Leasing Program
 Draft Proposed Program Published in 2009 included
31 Lease Sales
 Post Macondo – Obama and Salazar eliminated all
OCS areas from consideration except CGOM,
WGOM, small portion of EGOM, Cook Inlet,
Beaufort Sea & Chukchi Sea
 Programmatic National Environmental Impact
Statement should be finalized soon
 Final Leasing Program will include only 15 OCS
Lease Sales
 The new Leasing Program will most likely not be in
place by July 1, 2012, the day after the current
Leasing Program expires
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2012-2017 OCS Lease Sales
Sale No.
Area
Year
229
Western Gulf of Mexico
2012
227
Central Gulf of Mexico
2013
233
Western Gulf of Mexico
2013
244
Cook Inlet
2013
225
Eastern Gulf of Mexico
2014
231
Central Gulf of Mexico
2014
238
Western Gulf of Mexico
2014
235
Central Gulf of Mexico
2015
242
Beaufort Sea
2015
246
Western Gulf of Mexico
2015
226
Eastern Gulf of Mexico
2016
241
Central Gulf of Mexico
2016
237
Chukchi Sea
2016
248
Western Gulf of Mexico
2016
247
Central Gulf of Mexico
2017
Changes in the Leasing Process
Lease Financial Terms
Initial Period:
5 years for blocks in water depths less than 400 meters
5 + 3 years for blocks in water depths of 400 to less than 800 meters
7 + 3 years for blocks in water depths of 800 to less than 1600 meters
10 years for blocks in water depths of 1600 meters or deeper
Minimum Bonus Bid Amount:
$25.00 per acre or fraction thereof for water depths less than 400 meters
$100.00 per acre or fraction thereof for water depths 400 meters or deeper
Rental Rates:
$7.00 - $28.00 per acre or fraction thereof for water depths less than 200 meters
$7.00 - $44.00 per acre or fraction thereof for water depths 200 meters to less
than 400 meters
$11.00 - $16.00 per acre or fraction thereof for water depths 400+ meters
Minimum Royalty Rates:
$7.00 per acre or fraction thereof for water depths less than 200 meters
$11.50 per acre or fraction thereof for water depths 200 meters or deeper
Royalty Rate: 18.75%
National Environmental Policy
Act (NEPA)
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NEPA – the Law

National Environmental Policy Act of 1969
• Effective – January 1, 1970
• Public Law 91-190 (42 U.S.C. 4321 et seq.)
 Purpose - “To declare a national policy which will
encourage productive and enjoyable harmony
between man and his environment; to promote efforts
which will prevent or eliminate damage to the
environment and biosphere and stimulate the health
and welfare of man; to enrich the understanding of
the ecological systems and natural resources
important to the Nation; and to establish a Council on
Environmental Quality."
NEPA - Requirements
 A NEPA assessment is triggered when oil and gas leasing,
drilling or platform installation, airports, buildings, military
complexes, highways, parkland purchases and other federal
activities with the potential for environmental impacts are
proposed.
 Environmental assessments (EA's) and Environmental Impact
Statements (EIS's) are the tools used to assess the likelihood of
impacts on the environment from alternative courses of action.
 All federal agencies are subject to NEPA requirements
NEPA – Requirements cont.
 NEPA establishes the requirement that all federal agencies'
funding or permitting decisions be made with full
consideration of the impact to the natural and human
environment.
 NEPA requires agencies disclose these impacts to interested
parties and the general public.
 The central element in the environmental review process is a
rigorous evaluation of alternatives including the "no action"
alternative.
NEPA in the OCS
 Environment Assessment Types Used in the OCS
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Programmatic EISs
Area wide EISs
OCS Lease Sale EISs
Site or activity specific EISs
Site or activity specific EAs
Categorical Exclusions
 Tiering
 Current OCS EISs in Progress
Offshore Plan and Permitting
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From Idea to Production - Summary
Source: DOI
New Permitting Challenges
 Notices to Lessees
 New Guidelines
 New Rules
 New Legislation
 Higher Level of Scrutiny
• Oil Pollution Act
• National Environmental Policy Act
• Coastal Zone Management Act
• Endangered Species Act
• Marine Mammal Protection Act
Regulations, Legislation and
Litigation
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Federal Agency Regulatory Responsibilities
 All leasing and operations on the Federal offshore
are governed by laws and regulations that ensure
safe operations and preservation of the
environment, while balancing the Nation's needs
for energy development.
 The federal agencies enforce compliance with these
regulations and periodically updates rules to
reflect advancements in technology and new
information.
Key Offshore Laws

Outer Continental Lands Act of 1953 is the foundation law for offshore exploration and
development.

The Oil Pollution Act of 1990 (OPA 90) gave the Secretary of the Interior authority over
offshore facilities and associated pipelines, with the exception of deepwater ports, for State and
Federal offshore waters.

National Environmental Policy Act of 1970 (NEPA) - The NEPA requires a detailed
environmental review before any major or controversial Federal action.

Clean Air Act of 1970 (CAA) - The CAA regulates the emission of air pollutants from industrial
activities.

Coastal Zone Management Act of 1972 (CZMA) - The CZMA requires State review of Federal
action that affects the land and water use of the coastal zone.

Clean Water Act of 1977 (CWA) regulates discharges into the oceans

Federal Oil and Gas Royalty Management Act of 1982 - The FOGRAMA requires that oil and
gas facilities be built in a way that protects the environment and conserves Federal resources.

Marine Mammals Protection Act of 1972 (MMPA) - The MMPA provides for the protection
and conservation of all marine mammals and their habitats.

Endangered Species Act of 1973 (ESA) - The ESA provides protection for endangered or
threatened species.
Other Laws Impacting the OCS
 Federal Water Pollution Control Act
 Ports and Waterways Safety Act
 National Historic Preservations Act
 Natural Gas Policy Act
 Marine Pollution Research and Control Act of 1987
 Occupational Safety and Health Act
 National Fishing Enhancement Act of 1984
 Rivers and Harbors Act of 1899
 Coastal Barrier Island Resource Act of 1982
 National Ocean Pollution Act of 1978
Key Offshore Regulations


Oil and Gas Leases
Code of Federal Regulations
• 30 CFR 250
• 30 CFR 256


Notice to Lessees and Operators
Federal Register Notices
• New Laws (e.g. Oil Pollution Act of 1990, etc.)
• Proposed Rulemaking
Key Offshore Requirements Regulation

Designation of Operator

Exploration Plan (EP)

Plans of Development (POD)

•
Development Operations Coordination Document (DOCD)
•
Development and Production Plan (DPP)
Application for Permit to Drill (APD)
•
Sundry Notices and Reports on Wells

Minimum Royalty

Suspension of Production (SOP)

Suspension of Operations (SOO)

Oil Spill Financial Responsibility (OSFR)

Bonding
Other Agencies Involved in the OCS
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U.S. COAST GUARD
DEPARTMENT OF DEFENSE
CORPS OF ENGINEERS
U.S. AIR FORCE
DEPARTMENT OF TRANSPORTATION
COMMERCE DEPARTMENT
U.S. NAVY
U.S. FISH AND WILDLIFE SERVICE
NATIONAL PARK SERVICE
ENVIRONMENTAL PROTECTION AGENCY
STATE DEPARTMENT
DEPARTMENT OF ENERGY
TREASURY DEPARTMENT
FEDERAL ENERGY REGULATORY COMMISSION
U.S. GEOLOGICAL SURVEY
DEPARTMENT OF HOMELAND SECURITY
MARINE MAMMAL COMMISSION
Legislation
 H.R. 3534 (Rahall) “Consolidated Land, Energy, and Aquatic
Resources Act of 2009” (CLEAR Act)
 S. 3663 (Reed) Senate version of an Oil Spill Bill
 S. 1813, Federal-aid highway and highway safety construction
programs Reauthorization - Subtitle F—”Resources and Ecosystems
Sustainability, Tourist Opportunities, and Revived Economies of the
Gulf Coast States Act of 2012 (RESTTORE ACT)”
 S. 2146 – (Bingaman) the Clean Energy Standard Act of 2012
 Oil Spill Liability Trust Fund
 Oil Pollution Act of 1990
52
Key Offshore Lawsuits

Defenders of Wildlife v. MMS (S.D. Al. May 17, 2010), a lawsuit brought by the Defenders of Wildlife
(DOW) asserting that the MMS violated the National Environmental Policy Act (NEPA) and the
Administrative Procedure Act (APA) in granting categorical exclusions for central or western Gulf of Mexico
(GOM) offshore exploration and production, and in failing to prepare a Supplemental Environmental Impact
Statement (SEIS) in response to the Deepwater Horizon incident.

Center for Biological Diversity v. Salazar (D.D.C. May 18, 2010), a lawsuit brought by the Center for
Biological Diversity (CBD) challenging MMS’s use of a categorical exclusion from certain NEPA
requirements for central or western GOM offshore exploration and production.

Gulf Restoration Network and Sierra Club v. Salazar (E.D. La. May 18, 2010), a lawsuit brought by
environmental groups challenging the MMS’s issuance of a Notice to Lessees (NTL) that exempted GOM
Exploration Plans from certain MMS regulations.

CBD v. Salazar (5th Cir. May 27, 2010), a petition for review of MMS’s approval of twenty-five Exploration
Plans and DOCDs in the Gulf of Mexico. In its petition, CBD has asserted that MMS, in approving these
plans, failed to comply with NEPA, the Outer Continental Shelf Lands Act (OCSLA), and the APA. CBD
seeks a declaration by the court that by approving the EPs and DOCDs, the MMS is in violation of NEPA,
OCSLA and the APA

Hornbeck v. Salazar (US Eastern District Court Louisiana June 7, 2010), a lawsuit brought by a service
boat provider claiming the moratoria was arbitrary, capricious, and issued as an abuse of discretion under
OCSLA and APA.

National Resources Defense Council v. Salazar, No. 2:10-cv-1882 (E.D.La.), certain NGOs are challenging
the government’s July 1, 2004 finding that geological and geophysical exploration for mineral resources,
particularly regarding seismic surveys in the Gulf of Mexico, has no significant impact on the marine
environment.
53
Endangered Species Act (ESA) &
Marine Mammal Protection Act
(MMPA)
Endangered Species Act (ESA)
 The purpose of ESA is to protect and recover imperiled
species and the ecosystems upon which they depend
(December 28, 1973)
 The Act is administered by the U.S. Fish and Wildlife Service
(FWS) and the Commerce Department’s National Marine
Fisheries Service (NMFS). The FWS has primary
responsibility for terrestrial and freshwater organisms, while
the responsibilities of NMFS are mainly marine wildlife such
as whales and sea turtles.
 Under the ESA, species may be listed as either endangered
or threatened. “Endangered” means a species is in danger
of extinction throughout all or a significant portion of its
range. “Threatened” means a species is likely to become
endangered within the foreseeable future. All species of
plants and animals, except pest insects, are eligible for
listing as endangered or threatened.
Marine Mammal Protection Act (MMPA)
 All marine mammals are protected under the MMPA. The
MMPA prohibits, with certain exceptions, the take of marine
mammals in U.S. waters and by U.S. citizens on the high
seas, and the importation of marine mammals and marine
mammal products into the U.S. (October 31, 1972)
 The Department of Commerce through the National Marine
Fisheries Service (NMFS) is charged with protecting whales,
dolphins, porpoises, seals, and seal lions. Walrus, manatees,
otters, and polar bears are protected by the Department of
the Interior through the U.S. Fish and Wildlife Service. The
Animal and Plant Health Inspection Service, a part of the
Department of Agriculture, is responsible for regulations
managing marine mammals in captivity.
ESA/MMPA - Background
 Increasing public concern over the impact of
industry and society as a whole on the marine
environment especially to the animals that live
in the oceans
 News events (Atlantic: Right Whale)
 Increased regulation and regulatory
engagement throughout the world
 In the U.S. there is more scrutiny concerning
exploration and production operations on the
marine mammals and endangered/threatened
species
ESA/MMPA - Takes
 An ESA take is defined as “to harass, harm, pursue, hunt,
shoot, wound, kill, trap, capture, or collect, or attempt to
engage in any such conduct of a listed (endangered or
threatened) species.”
 An MMPA take is defined as “to harass, hunt, capture, kill
or collect, or attempt to harass, hunt, capture, kill or
collect any marine mammal."
How did we get here?
 Low and Mid-Range Frequency Sonar
 NGO interest
• Natural Resources Defense Council
 Sounding the Depths published
 Lawsuit over Navy Low Frequency Sonar
(LFS) Array Permit
OCS “Event”
 OCS Lease Sale 184
 ESA - Section 7
Consultation
 Biological Opinion
 Lease Stipulations; Notice
to Lessees (NTL)
Operations Impacts
 More restrictions on E&P activities in the GOM
by BOME, BSEE and NOAA Fisheries under both
ESA and MMPA.
 Current focus: impact of seismic activities on
sperm whales [and explosive removal of offshore
structures].
 Could impact other mammals; other listed
species; other manmade sound sources in the
water.
E&P Operations
What are the areas of concern?
• Physical & Behavioural
Sound in the Water
Vessel Strikes
Discharges
Manmade Sound in the Water
 Seismic Surveys
 Geo-hazard Surveys
 Drilling activity
• Vertical Seismic Profiles
• Operational Noise
 Construction Activity
 Lease Production Operations
 Associated Vessel Activity
 Platform Removal and Site Cleanup
Vessel Strikes
 Seismic Vessels
 Crew Boats
 Supply Vessels
 Tugs
 Barges
 Drilling Vessels
Discharges
 Produced water
 Drill cuttings
 Drilling muds
 Rain water runoff
 Air emissions
 Other wastes (e.g. Trash and Debris)
MMPA Defines Two Levels of Harassment
 Level A: “any act of pursuit, torment, or annoyance
which has the potential to injure a marine mammal or
marine mammal stock in the wild”
 Level B: “any act of pursuit, torment, or annoyance which
has the potential to disturb a marine mammal or marine
mammal stock in the wild {by causing disruption of
behavioral patterns, including, but not limited to,
migration, breathing, nursing, breeding, feeding, or
sheltering} but which does not have the potential to injure
a marine mammal or marine mammal stock in the wild”
MMPA Small Take Authorizations
Authorizations are issued, upon request, when the
activities are determined by NOAA Fisheries to:
(1) Have a negligible impact on the species or stock of marine
mammal(s) ;
(2) Take only small numbers of marine mammals; and
(3) Not have an unmitigable adverse impact on the availability of
marine mammals intended for subsistence uses.
Small Take Authorizations
Incidental Harassment Authorization “IHA”
(3-month to 3-year process)
 No potential for serious injury or mortality or the potential for
injury and death can be prevented through mitigation measures
 One-year “IHA”
Small Take Authorizations
Letter of Authorization “LOA”
(6-month to 12-year process)
 Potential for serious injury or mortalities and
there are no mitigation measures that could be
taken to prevent injury or death
 On-going, multi-year projects
 Requires creation of 5-year regulations
 One-year renewable “LOA” issued once
regulations are promulgated
What Now???
 New Geological and
Geophysical ITA
Rulemaking in the Gulf of
Mexico
 Renewal of the ITA for
Explosive Removal of
Offshore Structures
 Discussion of other lease
operations
Trans-boundary Resource Treaty
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Trans-boundary Resource Treaty
 U.S. and Mexico Maritime Treaties - Gulf of Mexico
 New Treaty recently negotiated
 Treaty creates a framework to allow development of oil and
gas resources that are common offshore
Trans-boundary Resource Treaty
 Treaty signed by both countries on February 20, 2012
 Mexico Senate approved treaty ratification on April 12, 2012
 U.S. implementing legislation pending along with treaty
ratification
National Oceans Policy
Nation Oceans Policy – Why???
 Currently our country lacks a clear
national policy governing the use of the
oceans that touch our shorelines
 U.S. governance of the oceans is
confusing, has overlapping jurisdiction
between agencies and is covered by
fragmented laws
 The oceans that touch U.S shores are
managed by over 140 different federal
laws and implemented by 18 different
federal agencies
National Oceans Policy

On June 12, 2009, President Obama signed a Memorandum
establishing an Interagency Ocean Policy Task Force, led by the Chair
of the Council on Environmental Quality

The President’s memorandum charged the Task Force with, within 90
days, developing recommendations that include:
(1) A national policy for the oceans, our coasts, and the Great
Lakes;
(2) a United States framework for policy coordination of efforts to
improve stewardship of the oceans, our coasts, and the Great Lakes; and
(3) an implementation strategy that identifies and prioritizes a set of
objectives the United States should pursue to meet the
objectives of a national policy.

On September 10, 2009, the Task Force submitted its interim report
to the President addressing the first three tasks outlined above

On July 19, 2010, the final report is issued
Nation Oceans Policy
Presidential Executive Order 13547 -- Stewardship of the
Ocean, Our Coasts, and the Great Lakes – signed on July 19,
2010
Purpose:
“The ocean, our coasts, and the Great Lakes provide jobs,
food, energy resources, ecological services, recreation, and
tourism opportunities, and play critical roles in our Nation's
transportation, economy, and trade, as well as the global
mobility of our Armed Forces and the maintenance of
international peace and security.”
National Oceans Policy
The oceans policy of the United States shall be to:
 (i) protect, maintain, and restore the health and biological diversity of
ocean, coastal, and Great Lakes ecosystems and resources;
 (ii) improve the resiliency of ocean, coastal, and Great Lakes ecosystems,
communities, and economies;
 (iii) bolster the conservation and sustainable uses of land in ways that will
improve the health of ocean, coastal, and Great Lakes ecosystems;
 (iv) use the best available science and knowledge to inform decisions
affecting the ocean, our coasts, and the Great Lakes, and enhance
humanity's capacity to understand, respond, and adapt to a changing
global environment;
 (v) support sustainable, safe, secure, and productive access to, and uses of
the ocean, our coasts, and the Great Lakes;
National Ocean Policy – cont.
 (vi) respect and preserve our Nation's maritime heritage, including our
social, cultural, recreational, and historical values;
 (vii) exercise rights and jurisdiction and perform duties in accordance with
applicable international law, including respect for and preservation of
navigational rights and freedoms, which are essential for the global
economy and international peace and security;
 (viii) increase scientific understanding of ocean, coastal, and Great Lakes
ecosystems as part of the global interconnected systems of air, land, ice,
and water, including their relationships to humans and their activities;
 (ix) improve our understanding and awareness of changing environmental
conditions, trends, and their causes, and of human activities taking place in
ocean, coastal, and Great Lakes waters; and
 (x) foster a public understanding of the value of the ocean, our coasts, and
the Great Lakes to build a foundation for improved stewardship.
National Oceans Policy
The United States shall promote this policy by:
 ensuring a comprehensive and collaborative framework for the
stewardship of the ocean, our coasts, and the Great Lakes that
facilitates cohesive actions across the Federal Government, as well
as participation of State, tribal, and local authorities, regional
governance structures, nongovernmental organizations, the public,
and the private sector;
 cooperating and exercising leadership at the international level;
 pursuing the United States' accession to the Law of the Sea
Convention; and
 supporting ocean stewardship in a fiscally responsible manner.
National Oceans Policy
National Ocean Council (Council)

the Chair of the Council on Environmental Quality and the Director of the Office of Science and
Technology Policy, who shall be the Co-Chairs of the Council;

the Secretaries of State, Defense, the Interior, Agriculture, Health and Human Services, Commerce, Labor,
Transportation, Energy, and Homeland Security, the Attorney General, the Administrator of the
Environmental Protection Agency, the Director of the Office of Management and Budget, the Under
Secretary of Commerce for Oceans and Atmosphere (Administrator of the National Oceanic and
Atmospheric Administration), the Administrator of the National Aeronautics and Space Administration, the
Director of National Intelligence, the Director of the National Science Foundation, and the Chairman of
the Joint Chiefs of Staff;

the National Security Advisor and the Assistants to the President for Homeland Security and
Counterterrorism, Domestic Policy, Energy and Climate Change, and Economic Policy;

an employee of the Federal Government designated by the Vice President; and

such other officers or employees of the Federal Government as the Co-Chairs of the Council may from time
to time designate.
National Oceans Policy – Priority Objectives

Ecosystem-Based Management: Adopt ecosystem-based management as a foundational principle for comprehensive
management of the ocean, our coasts, and the Great Lakes.

Coastal and Marine Spatial Planning: Implement comprehensive, integrated, ecosystem based coastal and marine spatial
planning and management in the United States.

Inform Decisions and Improve Understanding: Increase knowledge to continually inform and improve management and
policy decisions and the capacity to respond to change and challenges. Better educate the public through formal and
informal programs about the ocean, our coasts, and the Great Lakes.

Coordinate and Support: Better coordinate and support Federal, State, tribal, local, and regional management of the
ocean, our coasts, and the Great Lakes. Improve coordination and integration across the Federal Government and, as
appropriate, engage with the international community.

Resiliency and Adaptation to Climate Change and Ocean Acidification: Strengthen resiliency of coastal communities and
marine and Great Lakes environments and their abilities to adapt to climate change impacts and ocean acidification.

Regional Ecosystem Protection and Restoration: Establish and implement an integrated ecosystem protection and
restoration strategy that is science-based and aligns conservation and restoration goals at the Federal, state, tribal, local
and regional levels.

Water Quality and Sustainable Practices on Land: Enhance water quality in the ocean, along our coasts, and in the Great
Lakes by promoting and implementing sustainable practices on land.

Changing Conditions in the Arctic: Address environmental stewardship needs in the Arctic Ocean and adjacent coastal
areas in the face of climate-induced and other environmental changes.

Ocean, Coastal, and Great Lakes Observations, Mapping, and Infrastructure: Strengthen and integrate Federal and nonFederal ocean observing systems, sensors, data collection platforms, data management, and mapping capabilities into a
national system, and integrate that system into international observation efforts.
National Oceans Policy (CMSP)
Coastal and Marine Spatial Planning (CMSP)
“A comprehensive, adaptive, integrated, ecosystem-based, and
transparent spatial planning process, based on sound science, for
analyzing current and anticipated uses of ocean, coastal, and Great
Lakes areas. Coastal and marine spatial planning identifies areas
most suitable for various types or classes of activities in order to
reduce conflicts among uses, reduce environmental impacts,
facilitate compatible uses, and preserve critical ecosystem services
to meet economic, environmental, security, and social objectives. In
practical terms, coastal and marine spatial planning provides a
public policy process for society to better determine how the ocean,
our coasts, and Great Lakes are sustainably used and protected -now and for future generations.”
National Oceans Policy – CMSP Goals

Support sustainable, safe, secure, efficient, and productive uses of the ocean, our
coasts, and the Great Lakes, including those that contribute to the economy,
commerce, recreation, conservation, homeland and national security, human
health, safety, and welfare;

Protect, maintain, and restore the Nation's ocean, coastal, and Great Lakes
resources and ensure resilient ecosystems and their ability to provide sustained
delivery of ecosystem services;

Provide for and maintain public access to the ocean, coasts, and Great Lakes;

Promote compatibility among uses and reduce user conflicts and environmental
impacts;

Improve the rigor, coherence, efficiency, and consistency of decision-making and
regulatory processes;

Increase certainty and predictability in planning for and implementing new
investments for ocean, coastal, and Great Lakes uses; and

Enhance interagency, intergovernmental, and international communication and
collaboration.
National Marine Sanctuary
Gulf of Mexico Expansion
Flower Garden Banks National Marine Sanctuary
(Source: NOAA Sanctuaries)
Flower Garden Banks
About the Sanctuary
 Designated in 1992
 Includes: East and West Flower
Garden and Stetson Banks
 Stetson Bank added in 1996
 Located 93 to 104 nautical miles
offshore in the Gulf of Mexico
 Area: 42.5 square nautical miles
(56 square statute miles)
 Water Depth: 55’ to 500’
Flower Garden Banks - Expansion
(Source: NOAA Sanctuaries)
Islands in the Stream
(Source: NOAA Sanctuaries)
UNITED NATIONS
CONVENTION ON THE LAW
OF THE SEA
AAPL - Copyright © 2012. All Rights Reserved.
Law of the Sea
The United Nations Convention on the Law of the
Sea (UNCLOS) treaty is a comprehensive
international framework that defines the rights and
responsibilities of nations in their use of the world’s
oceans. It establishes guidelines for coastal nations’
maritime zones and boundaries, the environment,
navigational rights, and the management of marine
natural resources including energy development,
laying cables and pipelines, mining and marine
scientific research.
Source: US State Dept
.
Law of the Sea - Highlights
 9 year negotiation, 1973-1982
 Over 161 nations and the European Union have signed and
ratified the treaty
 1982 – US declined
 1983 – President Reagan’s Ocean Policy Statement (Adopts
EEZ)
 1994 – Part XI Revision, submitted to Senate for advice and
consent
Law of the Sea - U.S. Claims
 12 mile territorial sea
 200 mile Exclusive Economic Zone
• Brings 4.1 million square miles of ocean under U.S.
jurisdiction (7% of the Earth’s surface)
• Rights to extent the EEZ
 Sovereign rights over the exploration and exploitation of
the natural resources of our continental shelf
Extended EEZ
Source: US State Dept.
Law of the Sea Benefits
 America's right to lay claim to vast areas of the Arctic, which, absent U.S.
ratification, cannot be established and recognized internationally;
 Unfettered ability in foreign waters to lay and maintain undersea
communications cables that keep America connected across the globe;
 American rights of passage, navigation and safety along critical maritime
transit routes, including through the South China Sea and the Strait of
Hormuz;
 Access to economically important minerals in international waters,
including rare earth minerals widely used in medical equipment, modern
technology such as smart phones, flat screen TVs, electric vehicles and
U.S. defense systems.
Law of the Sea – Revenue Sharing
 Oil, gas and mineral production from the
continental shelf, beyond 200 miles is subject to
modest royalty payment
 Distributed among member States
 Rate: 1% in year 6 of production; increasing by
1% annually to a maximum of 7%
 U.S. industry participated in development of rate
formula
 Anticipated that funds would come from royalties
paid to U.S. government
 Role of International Seabed Authority (ISBA)
limited to devising formula for distributing
revenues to member States
Questions ?????