Scientific Research and Offshore Energy Development Walter Cruickshank, Deputy Director Minerals Management Service Energy Policy and Science Research 2005 American Geological Institute Leadership Forum

Securing Ocean Energy and Economic Value for America 2 Who is MMS? The Minerals Management Service manages the mineral resources on the Outer Continental Shelf and Federal and Indian mineral revenues to enhance public and trust benefit, promote responsible use, and realize fair value.

Securing Ocean Energy and Economic Value for America 3 Economic Benefits ~ $146 billion

Securing Ocean Energy and Economic Value for America 4 OCS Quick Facts Responsible for 1.76 billion OCS acresResponsible for 1.76 billion OCS acres <10 percent offered for lease<10 percent offered for lease 43 million acres leased43 million acres leased 8,300 leases; 1,800 producing leases8,300 leases; 1,800 producing leases 30% of domestic oil; 21% natural gas30% of domestic oil; 21% natural gas 4,025 production platforms4,025 production platforms 33,000 miles of pipeline33,000 miles of pipeline 42,000 OCS personnel42,000 OCS personnel 125 operating companies125 operating companies $6 billion annual revenue$6 billion annual revenue

Securing Ocean Energy and Economic Value for America 5 Rest of U.S.21% Gulf of Mexico Domestic Gas Production Gulf of Mexico Natural Gas Production

Securing Ocean Energy and Economic Value for America 6 Rest of U.S. 30% Gulf of Mexico Domestic Oil Production Gulf of Mexico Crude Oil Production

Securing Ocean Energy and Economic Value for America 7 Deep and Ultra-Deep (2004) Deepwater (>1,000 ft WD) –14 new deepwater startups –15 deepwater discoveries Ultra-Deep (>5,000 ft WD) > 7,000 feet WD (1.3 miles) > 150 miles from shore –New plays with large geographic extent –New field wildcat success rate, 58% (7 of 12) –Resource estimate >1 billion BOE

Securing Ocean Energy and Economic Value for America 8 Resource Assessment Provide a basic foundation for leasing decisionsProvide a basic foundation for leasing decisions –Identify oil and gas plays –Estimation of resources –Identify prospective areas –Determine bid adequacy MMS G&G database includes more thanMMS G&G database includes more than –1.7 million mi of 2D seismic data –33 thousand OCS blocks of 3D seismic data –100,000 well logs

Environmental Studies Studies Pollutant Transport (air & water) Biological Resource Characterization (habitat & behavior) Marine Environmental Monitoring Fates and Effects Socioeconomic Effects Biotechnology Invasive Species Technology Assessment & Research Reduce Emissions Blowout Prevention Structural Removal Corrosion Prevention Oil Spill Response Leak Detection Marine Risers Composite Materials An integrated response to meet challenges related to leasing, exploration & development of oil & natural gas resources on the OCS LeasingExploration Production ProductionDecommissioning MMS-Funded Research Since 1982, about $540 million spent on research; more than 1400 research projects

Securing Ocean Energy and Economic Value for America 10 Extreme Environmental Conditions Responding to Hurricane Ivan Responding to Hurricane Ivan –Review MODU loss of station keeping and mooring standards –Review platform rig skidding –Develop database of wind, sea state and currents –Assess pipeline damage to determine adequacy of pipeline standards –Assess platform damage to validate design standards –Assess deep water riser spacing and the potential for riser collisions

Securing Ocean Energy and Economic Value for America 11 Methane Hydrates MMS Resource AssessmentMMS Resource Assessment Planned Projects – determine feasibilityPlanned Projects – determine feasibility –Chevron/DOE/DOI Joint Project Adapt coring technologyAdapt coring technology Boreholes – March 2005Boreholes – March 2005 “Ground truth” seismic data & models“Ground truth” seismic data & models Initial focus: Safety of existing facilitiesInitial focus: Safety of existing facilities –Westport Technology International Flow SimulationFlow Simulation Future Production? – GOM AdvantagesFuture Production? – GOM Advantages –Infrastructure – existing pipeline network –Regionally favorable conditions for accumulations –High methane flux rate

Securing Ocean Energy and Economic Value for America 12 Deepwater Circulation Loop current and eddiesLoop current and eddies –Can force drilling interrupt –Pose a safety concern MMS NTL and Industry agreement to monitor and share data via internetMMS NTL and Industry agreement to monitor and share data via internet Meets Ocean Commission recommendations to establish IOOSMeets Ocean Commission recommendations to establish IOOS

Securing Ocean Energy and Economic Value for America 13 Integrated Ocean Observing System (IOOS) - National System Satellite remote sensing Satellite remote sensing Reference, sentinel stations Reference, sentinel stations Link to global module Link to global module Data standards & exchange protocols Data standards & exchange protocols National Federation of Regional Systems Regional Systems Land based inputsLand based inputs State & regional prioritiesState & regional priorities Greater resolutionGreater resolution More variablesMore variables

Securing Ocean Energy and Economic Value for America 14 Governmentfor the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs.... " Government for the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs.... " Decision Making Based on Science "It is hereby declared to be the policy of the United States that... the Outer Continental Shelf is a vital national resource held by the Federal Outer Continental Shelf Lands Act as Amended