CAES News
The Uncertainties of the MMS Five-Year Plan and the Need for Legislation
- The Minerals Management Service (MMS) Five-Year plan proposes to lease only about 2 million acres of the original Lease Sale 181.
- The Five-Year plan would offer lease sales in five-million acres of 181 South, but only if Congress enacts legislation taking the area out of the Congressional appropriations moratoria and the President takes it out of the Executive Withdrawal.
- The Five-Year plan can only directly add 2-million acres to the energy producing region of the Gulf of Mexico. In this respect, leasing in 181 south is no different than leasing off the coast of Virginia. They are both “in” the plan, but it will require a separate act of Congress for leasing in either area to actually take place.
- The Five-Year plan is just that … a plan. MMS issued a “plan” in 1997 to open all of 181 to energy development. In 2001, the agency took 75 percent of 181 off the table.
- The Five-Year plan does not provide revenue sharing. The governor of Louisiana has vowed to fight in court future energy lease sales in the Gulf of Mexico, until producing states receive a share of the royalty receipts collected by the federal government. Legislation that establishes a revenue-sharing formula minimizes litigation risk and lays the precedent for other energy producing states, or would-be energy producing states, to pursue similar arrangements.
- Legislation goes beyond the Five-Year plan by producing more energy and more certainty than the administrative proposal alone. Legislation in tandem with the Five-Year plan would produce at least 637 million more barrels of oil and 2.76 tcf more natural gas than the Five-Year plan alone.
For More Information, Contact:
Craig G. Veith
(703) 717-9816
craig.veith@craigveith.com