DPP = Draft Proposed Outer Continental Shelf (OCS) Oil & Gas Leasing Program for (REVISIT)

Transcription

1 DPP = Draft Proposed Outer Continental Shelf (OCS) Oil & Gas Leasing Program for (REVISIT) Point #1. BOEM = Bureau of Ocean Energy Management & DOI = Department of the Interior, i.e., the Administration. Point #2. BOEM is guided by Section 18 of the OCS Lands Act schedules and mandates OCS lease sales for a 5-year period. Point #3. The DPP superseded the Program. Point #4. 1/29/ DPP scheduled 14 potential OCS lease sales. 10 In the three Gulf of Mexico (GOM) planning areas. 1 Chukchi Sea planning area, Alaska. 1 Beaufort Sea planning area, Alaska. 1 Cook Inlet planning area, Alaska. 1 In a portion of the combined Mid & South Atlantic Planning Areas.

2 Point #5. SALE 260 scheduled for Point #6. Area(s) would likely be reduced into a series of 9 square mile blocks. Point #7. Minimum 50 miles offshore (in draft). Shrink not expand area.

3 Point #8. BOEM prepared a Programmatic EIS for seismic surveying ROD issued in Point #9. July Six seismic permits delayed as more information requested by NMFS in order to develop an Incidental Harassment Assessment (IHA). Point #10. March 15, Administration removes Atlantic OCS entirely from the Leasing Program. Point #11. January 6, BOEM formally denies all six applications to conduct seismic surveys. Point #12. Next 5-year plan is for , Draft likely in 2020.

4 NEXT DPP = Draft Proposed Outer Continental Shelf (OCS) Oil & Gas Leasing Program for Oil & Gas Leasing Program Point #1. June NMFS (National Marine Fisheries Service) proposes to issue five seismic permits in the Atlantic AND concurrently requested comments on its proposal to issue IHAs. Point #2. Summer BOEM announces Administration is going to re-script the current 5-Year Oil & Gas Leasing Program into a modified plan. Public comment July 3 - August 17, Point #3. January 4, Draft Leasing Program released and includes entire breadth of the Atlantic Planning Areas with lease sales currently proposed in 2020, 2022, and 2024.

5 Point #4. Later this year (2018)? - Public comment due on March 9, Next draft will beunveiled probably in late fall. (2018) Sec. Zinke (Congressional Budget hearing 3/13/18).

6 Point #5 (conjecture). Piecing together Zinke's 5-year-plan puzzle. Pamela King, E&E News reporter Published: Monday, April 16, 2018.

7 WHERE? *10 federal leases with the most recent held in No active leases since the mid-1990s and obviously no production from the Atlantic OCS. *Estimates back then - 5 trillion cubic feet (Tcf) dry natural gas. Blocks 467 & 510.

8 T Rex Velociraptor Cretaceous Park Triceratops Gallimimus

9 SALT DIAPIRSM

10 BRAZIL (& AFRICA) PLAYS

11 BRAZIL (& AFRICA) PLAYS

12 BRAZIL (& AFRICA) PLAYS Diapirs & Pre-Salt

13 Cruise Report (2014) - Eastern North American Margin Community Seismic Experiment

14 Federal Payments Bonus Lease Royalties vs. Revenue Sharing (1) BONUS BID - payment to the U.S. government for the right to explore a lease. (2) ANNUAL LEASE - payments to retain the right to develop the resource. (3) ROYALTY payment for all oil & gas extracted from federal lands, Native American lands, and the OCS. Since FY 2013 As high as $14 BILLION and low as $7 BILLION per year. $264 billion since the program was originally created in nd Largest source of revenue for the federal government (1 st = income tax) Point #1. All payments are remitted from industry to the Federal Government. Point #2. Federal Law is the only mechanism for payments to be assigned to the State and/or local government. This is called REVENUE SHARING.

15 Federal Payments Bonus Lease Royalties Where do the federal payments go? (1) U.S. federal government collects a 12.5% royalty from the industry on all oil and gas extracted from federal lands, Native American lands, and the OCS. (2) Again, royalty payments are complimented by; (a) bonus bids & (b) annual lease payments. SO..where does the $$$ go? i.e., - how does the ~12.5% royalty, bonus bid, & lease payment get spent?

16 50% States as revenue Historic Preservation Fund Land & Water Conservation Fund (LWCF) Reclamation Fund Native American Tribes & Allottees 50% U.S. Treasury However in the OCS, 100% of royalties, bonuses, & leases are directed to the U.S. Treasury unless there is a statutory revenue-sharing program in place with States and/or Coastal Political Subdivisions (CPD).

17 Federal Payments Bonus Lease Royalties vs. OCS Revenue Sharing 8(g) ZONE Per Section 8(g) of the Outer Continental Shelf Lands Act, 27% of bonuses, rent, and royalty revenues obtained within State waters and the first adjacent three nautical miles of federal waters is provided directly to the States hosting production. OCS/Federal Waters (6 200 miles) - Gulf of Mexico Energy Security Act of 2006 (GOMESA) provides the four Gulf of Mexico (GOM) producing states (Alabama, Mississippi, Louisiana and Texas) and their Coastal Political Subdivisions (CPS) receive a 37.5% share of OCS revenues. 8(g) zone 3 miles adjacent, hence 6 miles) Revenue sharing = 27% State Waters (3 miles) Coastline OCS 8(g) seaward to 200 miles) Revenue sharing = GOMESA only

18

19 More on GOMESA 37.5 % of OCS Revenues to States and CPS 4/5 (30 percent) to 4 Gulf Coast States 1/5 (7.5 percent) to 42 CPS 62.5% Federal 1/5 (12.5 percent) to LWCF 4/5 (50 percent) to U.S. Treasury Uses of GOMESA Funds (1) Coastal Protection Conservation; Restoration; Hurricane Protection (2) Mitigation of damage to wildlife or natural resources (3) Implementation of a federallyapproved conservation management plan

20 HOW State shares (30.0 %): Formula based on inverse distance between lease & State s coastline (200 nautical mile max). Coastal Political Subdivision shares (7.5%): CPS formula is based 50 % on inverse distance between the lease and the closest perimeter point of each CPS. The remainder of the CPS shares (50 %) are based on: Relative population (25%) Relative coastline length (25%) 50% 25% 25% Population Inverse Distance Coastline

21 Friends in the Administration have other ideas.

22 GOMESA-esq N.C. Model of Revenue Sharing Atlantic States = Va., N.C., S.C., and Ga. Coastal County = CZMA/CAMA County Revenue Sharing 62.5% to federal Treasury 37.5% to special account (federal), then to Atlantic States STATE EXAMPLE #1 Lease 1 L E A S E 1 State Statute Miles to Center Inverse Value Percentage of Share Va. 88 1/88 = % N.C. 51 1/51 = % S.C /260 = % Ga /440 = % total = %

23 GOMESA-esq N.C. Model of Revenue Sharing Atlantic States = Va., N.C., S.C., and Ga. Coastal County = CZMA/CAMA County Revenue Sharing 62.5% to federal Treasury 37.5% to special account (federal), then to Atlantic States STATE EXAMPLE #2 L E A S E 2 State Statute Miles to Center Inverse Value Percentage of Share Va /334 = % N.C /134 = % S.C /111 = % Ga /174 = % total = % Lease 2

24 Revenue Sharing COUNTY EXAMPLE #1 62.5% to federal Treasury 37.5% to special account (federal), then to Atlantic States - 50% of the 37.5% (or 18.75% total) distributed to Coastal Counties First 50% of 18.75% = (inverse distance to oceanfront County * shoreline distance * population of County) PLUS Second 50% of 18.75% = (inverse distance to ALL CZMA Counties * population of ALL CZMA Counties) Lease 1

25 L E A S E 1 Lease 1 State North Carolina County Oceanfront Shoreline (mi.) Population (2013) Statute Miles to Center of Lease TOTAL COUNTY SHARE (50% of 37.5%) = (18.75% of total) Beaufort 47, % Bertie 20, % Brunswick , % Camden 10, % Carteret 82 68, % Chowan 14, % Currituck 22 24, % Craven 104, % Dare 86 35, % Gates 11, % Hertford 24, % Hyde 15 5, % New Hanover , % Onslow , % Pamlico 12, % Pasquotank 39, % Pender 14 55, % Perquimans 13, % Tyrrell 4, % Washington 12, % totals 317 1,019, %

26 Revenue Sharing STATE/COUNTY EXAMPLE #2 62.5% to federal Treasury 37.5% to special account (federal), then to Atlantic States - 50% of the 37.5% (or 18.75% total) distributed to Coastal Counties First 50% of 18.75% = (inverse distance to oceanfront County * shoreline distance * population of County) PLUS Second 50% of 18.75% = (inverse distance to ALL CZMA Counties * population of ALL CZMA Counties) Lease 2

27 L E A S E 2 State North Carolina County Oceanfront Shoreline Population (2013) Statute Miles to Center of TOTAL COUNTY SHARE (50% of 37.5%) = (mi.) Lease Beaufort 47, % Bertie 20, % Brunswick , % Camden 10, % Carteret 82 68, % Chowan 14, % Currituck 22 24, % Craven 104, % Dare 86 35, % Gates 11, % Hertford 24, % Hyde 15 5, % New Hanover , % Onslow , % Pamlico 12, % Pasquotank 39, % Pender 14 55, % Perquimans 13, % Tyrrell 4, % Washington 12, % totals 317 1,019, % Lease 2

28 Major Atlantic OCS Revenue-Sharing Legislative Efforts to Date S2011* - the Offshore Production and Energizing National Security Act (2015) S1279* the Southern Atlantic Energy Security Act (2015) S3110* - the American Energy and Conservation Act (2016) *Note - U.S. Senate Committee on Energy and Natural Resources

29