For more than 25 years, the Mid-Atlantic Outer Continental Shelf (“OCS”) Planning Area, which includes offshore Virginia, has been off-limits for oil and gas exploration and production. On November 12, however, Minerals Management Service (“MMS”) Director Randall B. Luthi announced that his agency would be initiating the first step in the leasing process to hold a sale (Lease Sale 220) for acreage offshore Virginia. Following that announcement, yesterday MMS published in the Federal Register a Call for Information and Interest/Nominations (“Call”) and a Notice of Intent (“NOI”) to prepare an Environmental Impact Statement in order to gather information for the proposed sale. The proposed sale is scheduled for 2011. MMS emphasized that the Call is not an announcement of its commitment to hold the 2011 sale, but rather a step in the process of evaluating a proposed sale. The comment period on the Call and NOI will be open until December 29, 2008.
The area that is the subject of the Call was identified in MMS’s OCS Oil and Gas Leasing Program for 2007-2012 (“Current Leasing Program”). The program area extends offshore from about 50 to 183 statute miles in water depths ranging from 40 to 3,500 meters. The proposed area covers some 2.9 million acres. Based on the 2006 National Assessment, MMS estimates that this acreage holds approximately 130 million barrels of oil and 1,140 billion cubic feet of natural gas that is technically recoverable. In the Call, MMS makes note of the fact that Virginia’s 2007 energy policy supports “the inclusion of the Atlantic Planning Areas in a draft environmental impact statement with respect to natural gas exploration 50 miles or more off the Atlantic shoreline.” Virginia Governor Tim Kaine (D) recently reaffirmed this position. It is notable, however, that MMS states in the Call that the Outer Continental Shelf Lands Act (“OCSLA”) does not provide for gas-only leasing. Thus, it appears that the sale would include natural gas and oil exploration and production.
It is important to note that the Call and NOI are being issued in accordance with the Current Leasing Program, not the newly initiated five-year program (2010-2015), which would open almost the entire OCS to leasing. The new leasing program was initiated in August 2008 after President George W. Bush lifted the Executive Withdrawal on oil and natural gas leasing operations on the OCS. Shortly thereafter, Congress did not renew the OCS moratorium through the Department of the Interior appropriations process. Taken together, these measures open for leasing the remaining 85% of OCS lands, most of which are off the Pacific and Atlantic coasts. The OCS lands included in the Call would be available for leasing under either the current or the new program. Ultimately, however, the next Administration will decide whether to proceed with the proposed sale offshore Virginia.