[Federal Register Volume 68, Number 57 (Tuesday, March 25, 2003)]
[Notices]
[Pages 14425-14427]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7009]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


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

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Call for information and nominations (Call).

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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.

FOR FURTHER INFORMATION CONTACT: Please call Tom Warren at (907) 271-
6691 in MMS's Alaska OCS Region.

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

[[Page 14426]]

with 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, [email protected].

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:
    [sbull] You may mail comments to the Alaska OCS Region, Minerals 
Management Service, 949 East 36th Avenue, Room 308, Anchorage, Alaska 
99508-4302.
    [sbull] 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.
    [sbull] 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

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underway 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 [email protected].

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
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Call published/public outreach           March 2003.
 initiated.
Comments due on Call...................  June 2003.
Decision whether to proceed/Area         July 2003.
 Identification.
NEPA analysis..........................  January 2004.
Consistency Determination/Proposed       April 2004.
 Notice of Sale.
Governor's Comments due................  June 2004.
Final Notice of Sale published.........  August 2004.
Sale...................................  September 2004.
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    Dated: March 19, 2003.
R.M. ``Johnnie'' Burton,
Director, Minerals Management Service.
[FR Doc. 03-7009 Filed 3-24-03; 8:45 am]
BILLING CODE 4310-MR-P