[Federal Register Volume 69, Number 20 (Friday, January 30, 2004)]
[Notices]
[Pages 4532-4536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2010]


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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.

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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 April 29, 2004.

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

SUPPLEMENTARY 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 that 
would offer only very small, very focused areas of specific interest 
for exploration and to request nominations of such areas. The lease 
sale is being proposed to provide opportunities for industry 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. We also request comments 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 depend 
on a commitment from industry to explore the area leased within a 
specific time period.
    This is the second Call issued for the Chukchi Sea/Hope Basin for 
this 5-year program. The first Call was published in the Federal 
Register on March 25, 2003. No interest was expressed; therefore, the 
process was stopped and deferred to this year. If no interest is 
expressed in response to this Call, the 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 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.
    This Call does not indicate a preliminary decision to lease in the 
area described below. If the MMS decides to proceed with the sale 
process, the 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 
the 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 OCS Lands Act, 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 to 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 Sec. 102(9) of the OCS Lands Act Amendments 
of 1978, which states as a purpose of the statute, `` * * *to insure 
that the extent of oil and natural gas resources of the OCS is assessed 
at the earliest practicable time.'' The objective of the ``special-
interest'' leasing process is to encourage exploration in a frontier 
OCS area that 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.
    We seek 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. We also seek 
comments on the terms, conditions, and economic incentives of a sale in 
the Chukchi Sea/Hope Basin. We strongly encourage industry and other 
interested parties to contact the MMS, Alaska OCS Region, Mr. Tom 
Warren at (907) 271-6691, with questions or to discuss interest in the 
area. This early planning and consultation step is particularly 
important to this special-interest lands 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 OCS Lands Act and regulations at 
30 CFR part 256 and 30 CFR part 260. We also encourage commenters to 
submit comments and suggestions on the ``special-interest'' leasing 
process in general using this process.
    This Call is being issued in accordance with the OCS Oil and Gas 
Leasing Program 2002 to 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 Call, the 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 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 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

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1,243 whole and partial blocks (about 6 1/2 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 of 
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.
     You may also comment via e-mail to 
[email protected]. 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 2005 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 99508-4302.
    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 and 
offer only small-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. The telephone number and the 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. We request respondents 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 similar in form to those 
contained in the Notice of Sale for Beaufort Sea Sale 186 (68 FR 
50549). Incentives for Beaufort Sea Sale 186 were:
     Royalty suspension volumes for oil production 
(with possible consideration for gas)
     Reduced rental rates
     Lower minimum bid requirements

    C. Relation to Coastal Management Plans (CMPs). We also seek 
comments on potential conflicts with approved local CMPs 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. We request 
commenters 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/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 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 
1988, 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 expired. No lease sales have been held in the Hope 
Basin area. The Alaska OCS Region document ``Undiscovered Oil and Gas 
Resources, Alaska Federal Offshore, December 2000 Update'' (http://www.mms.gov/alaska/re/uogr.pdf), estimates the undiscovered 
conventionally recoverable resources at:

[[Page 4534]]



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                                          Oil and NGL (BBO)                    Gas (TCFG)                       BOE (BBO)
               Area               ---------------------------------------------------------------------------------------------------    MPhc
                                      F95        Mean       F05        F95        Mean       F05        F95        Mean       F05
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CHUKCHI SHELF....................       8.60      15.46      25.03      13.56      60.11     154.31      11.32      26.21      49.60       1.00
HOPE BASIN.......................       0.00       0.09       0.28       0.00       3.38      11.06       0.00       0.69       2.25      0.61
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BBO, billions of barrels of oil and natural gas liquids; TCFG, trillions of cubic feet; BOE, total oil and gas in billions of energy-equivalent barrels
  (5,620 cubic feet of gas=1 energy-equivalent barrel of oil); reported MEAN, resource quantities at the mean in cumulative probability distributions;
  F95, the resource quantity having a 95-percent probability of being met or exceeded; F05, the resource quantity having a 5-percent probability of
  being met or exceeded; MPhc, marginal probability for hydrocarbons for basin, i.e., chance for the existence of at least one pool of undiscovered,
  conventionally recoverable hydrocarbons somewhere in the basin. Resource quantities shown are risked, that is, they are the product of multiplication
  of conditional resources and Mphc. All liquid resources in Norton basin are natural gas liquids that would only be recovered by natural gas
  production.

    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 OCS Region Web site at http://www.mms.gov/alaska/ref/pubindex/pubsindex.htm.

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 2005:

------------------------------------------------------------------------
                                                   Tentative process
                                                milestones for proposed
                                                 2005 Chukchi Sea/Hope
                                                       Basin Sale
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Call published/public outreach initiated.....  January 2004.
Comments due on Call.........................  April 2004.
Decision whether to proceed/Area               May 2004.
 Identification.
NEPA analysis................................  February 2005.
Consistency Determination/Proposed Notice of   April 2005.
 Sale.
Governor's Comments due......................  June 2005.
Final Notice of Sale published...............  August 2005.
Sale.........................................  September 2005.
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    Dated: January 20, 2004.
R.M. Burton,
Director, Minerals Management Service.
BILLING CODE 4310-MR-P

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[GRAPHIC] [TIFF OMITTED] TN30JA04.036


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[FR Doc. 04-2010 Filed 1-29-04; 8:45 am]
BILLING CODE 4310-MR-C