Working for America’s Energy Future and

a Quality Environment

MMS: Working for America’s Energy

Future and a Quality Environment

How we manage our energy resources now

will determine how we live and work in the

United States for decades to come.

The decisions we make in the 1990’s will

affect hundreds of aspects of our daily lives

and those of our children—the availability of

foods in the market, how we get to work,

what goods are produced in our factories,

and the quality of our environment.

As the Nation’s designated steward of the

mineral resources on the Outer Continental

Shelf (OCS), which contains nearly one-third

of our Nation’s natural gas and oil resources, the Department of the Interior’s

Minerals Management Service (MMS) is

committed to achieving the proper balance

between providing energy for the American

people and protecting unique and sensitive

coastal and marine environments.

MMS’s primary responsibilities are:

• Prudent leasing and safe management of

Federal lands for exploration and development of natural gas and oil on the OCS; and

the

• Collection and distribution of bonuses,

rents, and royalties from companies that

lease and produce minerals from onshore
and offshore Federal and Indian lands.

Practically speaking, these tasks are complicated. MMS faces a multi-faceted challenge:

• To meet the Nation’s present and future

energy needs;

• To reduce our dependency on foreign

energy sources;

• To protect the environment, the people,

and the animals that inhabit our coasts and

oceans; and

• To ensure the correct valuation of mineral

resources on Federal and Indian lands and

the prompt collection and disbursement of

bonuses, rents, and royalties generated by

those resources.

MMS is committed to achieving the proper balance between providing energy for the American people and protecting unique
MMS responds to these challenges through

a commitment to quality science, judicious

leasing, and safe, clean operations. MMS

works diligently to protect the environment

and to achieve excellence in every aspect of

our royalty management services.

Promising Quality Science

Quality science is fundamental t MMS’s

approach to identifying and assessing areas

for potential resource development, determining potential environmental risks, and

ensuring safe, clean offshore operations.

MMS conducts and/or funds and publishes

the results of hundreds of scientific and

technical projects and studies which enable

us to balance environmental concerns with

leasing decisions. These scientific findings

may result in revised regulations, stipulations in lease agreements, or special orders

to offshore operators.

After analyzing the results of these findings,

MMS often determines that leasing decisions are subject to additional wide-ranging

oceanographic, environmental, marine life,

socioeconomic, or ecological studies. MMS

scientists and engineers work to determine

ways of protecting environmentally sensitive

areas or species, or mitigating potential

harm from offshore activities.

MMS conducts rigorous engineering, geological, geophysical, and other scientific

assessments on which we base decisions

for approval of or modification to lessees’

plans for OCS activity. These assessments

also enable MMS to measure the long-term

environmental and ecological effects of

offshore natural gas and oil production.

MMS regards safety of personnel, of the environment, and of

operations as top priorities.
Upholding Judicious Leasing

MMS envisions leasing only a small percentage of the more than one billion offshore

acres of the OCS. We base leasing decisions on a 5-Year Program schedule, which

shows dates and locations of proposed

lease sales and geographical, geological,

and environmental studies.

In developing this 5-Year Comprehensive

Natural Gas and Oil Resource Management

Program, MMS balances environmental

considerations, the potential for discovery of

natural gas and oil, and the potential impact

on coastal communities. Interested parties—including State and local governments

and the general public—have several opportunities to participate in the decisionmaking

process and to review and submit comments

to MMS on the program.

The Comprehensive 5-Year Program is

adopted only after MMS has reviewed the

comments and balanced them with national

interest considerations, and has obtained

approval from the Secretary of the Interior

after a review by the President and the

Congress. Developing an approved, final 5-

Year Program is a process which takes two

to three years.

Ensuring Safe and Clean Operations

From the day a bidder is awarded a lease to

operate on the OCS until drilling and production cease—often up to 30 years later—

MMS devotes constant attention to safety

through a combination of required plans,

permits, training, inspections, and, if necesEach year MMS spends millions of dollars to study and

address the possible effect of oil and gas development

on coastal and marine environments.
sary, penalties for noncompliance with the

regulations.

Numerous Federal laws—some under the

jurisdiction of MMS, others under the jurisdiction of agencies such as the Environmental Protection Agency or the U.S. Coast

Guard—govern offshore activities. These

are interpreted and explained in regulations

which specify the procedures operators

must follow to ensure safe offshore operations. Among the many issues addressed in

these regulations are requirements for

inspections, safety training and drills, and

accident prevention procedures.

Aside from regulations and required inspections designed to ensure safe operations,

MMS has two key activities to ensure personnel have access to and training in the

safest, most current technologies available

for working on the OCS:

• The MMS Technology Assessment and

Research Program (TARP), a balanced,

comprehensive approach to analyzing,

developing, and improving workplace and

environmental safeguards to protect OCS

personnel who are working in increasingly

deeper, rougher waters and at aging facilities; and

• Personnel training programs and MMS

certification of privately operated training

programs to ensure that OCS workers know

how to recognize unsafe equipment and

operational procedures.

Before and during OCS operations, operators and lessees must prepare and secure

approval of detailed plans for exploration

and development, as well as permits for

drilling and for construction or modifications

to platform structures and pipelines. These

plans and procedures must meet MMS’s

stringent regulations and operating procedures, which are based on the best available

and safest technologies.

A crucial tool in maintaining safe operations

is the inspection of offshore facilities. Federal law and regulations require a complete

inspection of every offshore facility—more

than 3,800 platforms in the Gulf of Mexico

and off the California coast—at least annually. Petroleum engineering technicians

conduct these inspections 365 days per

year, weather permitting, evaluating the

overall condition of a facility and its operations.

In the rare event that an accident does

occur, MMS strives to minimize damage to

individuals, the environment, and property

as quickly as possible and to prevent future

accidents through a program of investigations and accident reports. Based on these

findings, MMS may revise regulations and

operating orders for a particular facility.

MMS enforces its network of safety regulations and procedures through warnings and

penalties. Penalties may include a component or facility shut in, or civil penalties of up

to $20,000 per day for failure to correct an

offshore operations violation. Penalties may

be as high as $500,000 per day or 10 years

in prison or both, for knowing and willful

violation of OCS rules, regulations, leases,

or permits.

Protecting the Environment

MMS conducts a multi-faceted Environmental Studies Program which generates the
scientific research essential to making

sound leasing and operating decisions

before exploration and development can

begin on any particular OCS tract.

In addition, MMS conducts a special program designed to identify and protect valuable underwater prehistoric and historic

sites on the OCS.

MMS’s extensive, constantly evolving Environmental Studies Program supplies the

scientific and technical information needed

to determine which offshore areas are

acceptable for leasing, as well as to predict,

assess, and manage the impact of OCS

natural gas and oil activities on the human,

marine, and coastal environments.

The Studies Program provides information

for the environmentally safe operation of

natural gas and oil activities and for developing the 5-Year Program. MMS publishes

draft and final Environmental Impact Statements for all proposed leasing areas, describing the existing environment, analyses

of possible effects of offshore activities on

the environment, oil-spill risk analyses and

proposed mitigating measures, as well as

thorough environmental assessments,

conducted after leases are awarded but

before OCS operations may begin.

MMS protects underwater archaeological

sites by using remote sensing instruments

that detect shipwrecks of whaling, fishing,

and military vessels, allowing MMS to determine specific measures that are necessary

to protect them.

Managing Royalties

Natural gas, oil, geothermal energy, coal,

and other minerals constitute some of our

Nation’s most important natural resources.

These resources belong to all Americans,

and Congress has entrusted MMS with

ensuring that the Nation receives a fair and

appropriate return from interests that lease

or develop them.

The Royalty Management Program (RMP)

collects and distributes the bonuses, rents,

and royalties from companies that lease and

produce minerals from onshore and offshore

Federal and Indian lands. These revenues

are one of the largest non-tax sources of

income to the U.S. Treasury, ranging from

about $3.4 billion to $10 billion annually,

depending on the volume of production,

prices, and amounts of offshore leasing.

Sources of these revenues include 26,000

Federal and Indian producing offshore and

onshore leases in rental status.

RMP collects these funds from the mineral

industry and distributes them to State governments, Indian tribes, individual Indian

mineral owners, and the public at large

through several U.S. Treasury funds.

Federal law requires that these funds be

distributed to several types of recipients.

The Federal Government, which receives

the largest share, disburses the revenues

among the General Fund of the U.S. Treasury; special Federal funds for acquisition of

National and State Parks, conservation, and

recreation areas; the Historic Preservation

Fund; and coastal States, Indian tribes, and

some 29,000 individual Indian recipients.
These funds are used to acquire and maintain recreational and conservation lands;

they are used for State-sponsored education, roads, and other projects; for development of the National Park System; and for

acquisition and management of historic

properties.

To carry out the complex tasks of collecting,

accounting for, and disbursing revenues

from thousands of companies to thousands

of recipients, the RMP has developed and

implemented automated systems that provide accounting data and track production

information, and account for bonuses and

rentals from onshore Federal leases that are

not yet producing.

Collection and distribution of royalties to

Indian Tribes and individuals is an important

part of the Federal Government’s trust

responsibility for the protection of Native

Americans and their property. MMS accords

high priority to ensuring that Indian revenues

receive thorough, systematic audit coverage, and that specific problems are resolved

as they are identified.

The RMP also conducts numerous outreach

activities that offer royalty recipients, payors,

and other interested parties an opportunity

to discuss, face to face, their concerns about

the program, and to offer suggestions for

improving it.

Efforts such as the Initiative for Indian Tribes

and Allottees, which resulted in an “Action

Plan” of recommendations for improvements, and RMP’s superior automated

systems, signal MMS’s contribution to a

Departmentwide commitment to enhance all

services to the Indian community.

The People of MMS

The MMS workforce consists of about 2,100

individuals in more than 100 occupations.

About one-half of these individuals occupy

positions officially classified as professional.

Of this group, about half have specialized

positions—they are biologists, oceanographers, petroleum engineers, geologists,

geophysicists, paleontologists, economists,

and automated data processing specialists,

among others. Another 30 percent are

accountants and auditors, some of whom

are certified public accountants. More than

20 percent of MMS biologists and physical

scientists hold doctoral degrees, while more

than one-quarter of all professional personnel have their Master’s degrees.

For More Information

MMS continues to work with Federal, State,

and local government agencies, developing

an offshore program that is responsive to

local communities, mindful of America’s

energy future, and committed to protecting

our children’s environment. MMS aggressively seeks measures to ensure prompt,

accurate collection and payment of royalties

to the U.S. Treasury and to Indian Tribes and

Allottees, with an underlying philosophy of

responsible stewardship of America’s offshore resources.

For more information on the Minerals Management Service, contact:

Minerals Management Service

1849 C Street, NW, MS 4230

Washington, DC 20240

(202) 208-3985
Some offshore mineral revenues are used to acquire land for National Parks, National Wildlife Refuges, and for State Parks and

 recreation areas.

The MMS Mission

The Minerals Management Service’s (MMS) primary

responsibilities are to manage the mineral resources

located on the Nation’s Outer Continental Shelf (OCS),

collect revenue from the Federal OCS and onshore Federal

and Indian lands, and distribute those revenues.

Moreover, in working to meet its responsibilities, the

Offshore Minerals Management Program administers the

OCS competitive leasing program and oversees the safe

and environmentally sound exploration and production of

our Nation’s offshore natural gas, oil, and other mineral

resources. The MMS Royalty Management Program meets

its responsibilities by ensuring the efficient, timely and

accurate collection and disbursement of revenue from

mineral leasing and production due to Indian tribes and

allottees, States and the U.S. Treasury.

The MMS strives to fulfill its responsibilities through the

general guiding principles of: 1) being responsive to the

public’s concerns and interests by maintaining a dialogue

with all potentially affected parties; and 2) carrying out its

programs with an emphasis on working to enhance the

quality of life for all Americans by lending MMS assistance

and expertise to economic and environmental protection.