1. MMS Update and A View for the New Year: and New Gulf Developments
Recovery from Hurricanes
and New Gulf Developments
January 19, 2006
Presentation at AAPL
Chris Oynes
Regional Director
Gulf of Mexico OCS Region
Minerals Management Service
Good Morning.
Its my pleasure to present the keynote address for this conference.
Let me begin by making a few observations of the world around us.
Besides the current high price for oil and gas, the recently released National Petroleum Council Study predicted that by 2010 the demand for gas in the U.S. will rise from 22 TCF to 29 TCF.
Where will this gas come from?
Well one of the major contributors will be from the U.S. Gulf.
Another notable fact today is that now there are more rigs working in the deepwater Gulf than in any other area of the world.
MMS

2. 2005 HURRICANE SEASON CINDY DENNIS ARLENE RITA KATRINA EMILY WILMA
During the season, nearly all of the structures in the GOM experienced hurricane force winds or waves. Twice during the season the entire Gulf was shutin due to hurricanes that were both at Category fives when they enter the GOM.
EMILY
WILMA
BRET

4. High water covers a trailer and a shed in the port city of Lake Charles, La., after Hurricane Rita pushed ashore Saturday. Associated Press photo by LM Otero

5. RITA KATRINA WILMA As of January 5, 2006
This chart depicts the percentage of oil and gas shut-in during Hurricanes Katrina and Rita.
Hurricane Katrina and Rita both caused 100% of the GOM oil production to be shut-in. After Katrina passed, shut-in production got as low as 58% for oil and 35% for gas. Almost 60 percent of that production was shut-in for downstream issues not related to the facility.
Then Hurricane Rita entered the GOM, and as of 11/02/05, we are still at 64% for oil and 51% for gas.
The GOMR office in Houston has a team working on when production will be returned, and they are investigating all aspects from the facility up to the refinery.
As of January 5, 2006

6. GOM production has been significantly lowered due to hurricanes in 2004 and 2005
Cumulative delayed Oil Production is
114mm bbls
Cumulative delayed Gas Production is
585 Bcf

7. Damaged & Destroyed Platforms
Katrina
Rita
Destroyed 46 66
Extensive Damage 20 32
As of 11/2005

8. Platforms by Age Destroyed by Hurricanes Katrina and Rita

9. Toppled Platforms BT Operating EI 294 A
Before Rita
After Rita

10. Chevron Typhoon (Grounded at EI 270)

11. Damage
The number and type of damage will only grow in the next 12 months as underwater surveys and assessments are completed.

12. Major Issues in Hurricane
19 MODU’s were set adrift from Hurricanes Katrina and Rita
MODU’s adrift are not acceptable
Secretary of DOI met with companies Nov. 17 to discuss changes
Companies are evaluating/making mooring changes

13. MMS Proposed Research for Hurricanes Katrina & Rita Request for Papers
Assess/evaluate pipeline movement/damage
Assess/evaluate platform damage
Provide hindcast data for wind, wave & currents
Assess/evaluate performance of jack-up rigs
Assess methods to eliminate hydrates in pipelines and risers during start-up
Model waves and currents produced by hurricanes

14. New Developments in the Gulf of Mexico

15. Energy Bill Provisions that Will Affect Lease Sales1.
Added a third tier of royalty relief for deep gas drilling in m of water (> 20,000 ft.)

16. Energy Bill Provisions
2. Added three tiers of royalty relief for
deep gas drilling in m of water

17. Energy Bill Provisions
3. Added a royalty relief level in deep water –
16 mmboe in depths greater than 2000m

18. Coastal Zone Management Regulations
Changes In NOAA's
Coastal Zone Management Regulations
71 F.R. 788 January 5, 2006
The rule maintains the ability of coastal states to review proposed federal actions that would have a reasonably foreseeable effect on any land or water use or natural resources of a state
NOAA did not add language requiring that agency NEPA documents be included as information necessary to start the six-month review period

19. Coastal Zone Management Regulations
Changes In NOAA's
Coastal Zone Management Regulations
The Secretary of Commerce must close the decision record within 160 days of the Notice of Appeal
MMS’s 5 year leasing plan is not required to have a consistency determination since “It does not determine which leases may actually be offered for bid….”
The Ninth Circuit decision on Suspensions requiring a consistency determination is limited to those 36 leases and “in all other foreseeable instances lease suspensions would not be subject to federal consistency review”

20. Offshore Windmills

21. Alternate Energy Uses on the OCS
Request for Comments
Alternate Energy Uses on the OCS
December 30,2005, MMS published a request for comments --ANPR
Requests comments on the development of a new alternative energy related use program:
Access to OCS lands and resources
Environmental information
Operational activities
Payments and revenues
Coordination and consultation

22. New developments suggest a bright future for the Gulf

24. Stones. BP. WR 508. 9576 ft. Jubilee Ext. Anadarko. LR 309. 8774 ft
Stones BP WR ft. Jubilee Ext. Anadarko LR ft. Mondo NW Ext. Anadarko LR ft. Q Spinnaker MC ft. Big Foot Chevron WR ft. Genghis Khan Anadarko GC ft. Wrigley Newfield MC ft. Knotty Head Chevron/Unocal GC ft. Clipper Pioneer GC ft. Anduin Nexen MC ft.

25. MMS

26. Major New Activity MMS Unocal Knotty Head Neptune Field
Green Canyon 512
Neptune Field
Atwater Valley 573
Chevron’s Tahiti
Green Canyon 640
Jack Test Well
Walker Ridge 759
MMS

27. Seismic Noise Remains as an Issue

28. MMS Sperm Whale Seismic Study – Part II (SWSS II)
Environmental Study
MMS Sperm Whale Seismic Study – Part II (SWSS II)
Awarded in 2005
Understand sperm whales movements, and feeding and breeding behavior
Characterize industry/ambient noise
Determine acoustic effects on sperm whales
ENVIRONMENTAL STUDIES PROGRAM: Studies Development Plan FY
Region: Gulf of Mexico OCS Region
Planning Area(s): Gulf of Mexico
Title: Deepwater Program: Sperm Whale Seismic Study – Part II (SWSS II)
Cost Range: (in thousands) $ 2,800 -3,000 Period of Performance: FY
Description:
Background: As industry moves to deeper GOM waters, platforms and other operations (vessel traffic, drilling ships, platform placement/removals, seismic surveys etc.) now routinely overlap with the habitat of the endangered sperm whales and about 20 species of cetaceans. As detailed in the findings of the MMS sponsored 1999 workshop on protected species in the GOM, the leading concern was the almost total lack of information on the effects of loud sound (airguns, in particular) on, firstly, sperm whales and also all cetaceans in general. In 2000, MMS initiated a pilot study through an interagency agreement with the National Marine Fisheries Service (NMFS) to develop methods to study sperm whales and acoustics. Basic methods were established in this 2-year study along with some collection of baseline information on sperm whales diving behavior. In 2002, MMS initiated the Sperm Whale Seismic Study (SWSS) to continue collecting information on sperm whale baseline biology, habitat use, and begin testing of possible airgun effects using controlled exposure experiments (CEEs). SWSS is co-funded by the Navy, National Science Foundation, and a coalition of seismic and oil industry companies. Three field seasons were planned from FY with a final report to be complete in FY The controversy and information needs concerning effects of noise on marine mammals have increased during the conduct of SWSS. Through the precautionary principals inherent in the Marine Mammal Protection Act, new restrictions and mitigations on seismic operations have been implemented, though no new findings of impacts have been documented. While SWSS results to date are well situated to show more extreme concerns are unfounded, the ability to resolve more subtle concerns remains elusive. This lack of information leads to views that existing operations with mitigations fail to protect sperm whales or that mitigation measures are too extreme and are unjustified constraints.
SWSS II is proposed to continue efforts to define habitat use, determine longer-term behavior of sperm whales relative to seismic vessels and oceanographic events, and further define genetic characteristics of GOM whales. Closely coordinated studies with industry and NSF partnerships will measure sound sources in the GOM and better map the acoustic environment. In the broader view of marine mammal acoustic issues and high degree of cooperative efforts now existing among Federal Agencies and industry, SWSS II is intended to focus on the existing situation in deepwater GOM areas. In that sense, most effort will focus on habitat use, possible displacement by vessels, and monitoring for any whale responses under existing conditions. Efforts to determine a threshold of response for sperm whales and quantify that response (CEEs), if pursued, will need to be a different research arrangement, perhaps requiring testing in several worldwide locations.
Objectives: SWSS II is projected to conduct two summer cruises in FY 2005 and FY 2006 with possible additional small vessel whale-following observations to monitor tagged whales. Basic tasks are to deploy improved S-tags with GPS and depth recording capabilities, upgrade passive acoustic tracking, obtain additional DNA samples and photo ID photos, maintain physical oceanographic data collection from vessel/satellite remote sensing, and conduction small vessel surveys for enhanced behavioral data and confirm condition of tagged animals. Objectives include:
Correlation of long-term whale positions relative to physical oceanographic events and industry activities (platform and seismic vessel locations) using S-tags and, potentially, 3-D acoustic tracking.
Complete an evaluation of habitat use of sperm whales in GOM based on all SWAMP and SWSS results.
Provide an evaluation of genetic characteristics relative to world-wide sperm whale populations.
Integrate SWSS results and applicable information from seismic vessel observations and acoustic calibration efforts to estimate potential effects of seismic vessel operations on GOM sperm whales.
Methods: Methods have been well established through SWSS. These include standard visual survey techniques using 25x “bigeye” binoculars, biopsy darts for DNA samples, digital photography for photo-ID, towed hydrophones, XBT’s, CTD;s and use of remote sensing satellite data for sea surface height and temperature and ocean color. S-tags will be a mix of proven designs with introduction of new GPS/depth sensing tags (developed under separate funding).
Products: The key product desired is manuscripts for submission to peer-reviewed journals. For effective administration and tracking of the study, cruise plans and enhanced cruise reports will be required for years 1 and 2. A data management plan will be submitted after contract award. A final report will be produced in year 3.
Importance to MMS : The possible impacts of manmade sound on marine mammals is highly contentious with few conclusive data. MMS has responded with a series a NEPA documents, petitions, and NTL’s. There is a very pressing need to obtain more informative to update and revise these products. Active monitoring and evaluation of possible effects of industry activities on marine mammals is needed in the GOM. SWSS II will both provide a very significant contribution to that effort and obtain new results toward defining acoustic effects and habitat use of sperm whales in the GOM.