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THE MINERALS MANAGEMENT 

SERVICE’S PROPOSED FIVEYEAR PROGRAM FOR OIL AND 

GAS LEASING ON THE OUTER 

CONTINENTAL SHELF

OVERSIGHT HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND 

MINERAL RESOURCES

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

Thursday, June 28, 2007

Serial No. 110-32

Printed for the use of the Committee on Natural Resources

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

or 

Committee address: http://resourcescommittee.house.gov 

(II)

COMMITTEE ON NATURAL RESOURCES 

NICK J. RAHALL II, West Virginia, Chairman 

DON YOUNG, Alaska, Ranking Republican Member

Dale E. Kildee, Michigan 

Eni F.H. Faleomavaega, American Samoa 

Neil Abercrombie, Hawaii 

Solomon P. Ortiz, Texas 

Frank Pallone, Jr., New Jersey 

Donna M. Christensen, Virgin Islands 

Grace F. Napolitano, California 

Rush D. Holt, New Jersey 

Rau ́l M. Grijalva, Arizona 

Madeleine Z. Bordallo, Guam 

Jim Costa, California 

Dan Boren, Oklahoma 

John P. Sarbanes, Maryland 

George Miller, California 

Edward J. Markey, Massachusetts 

Peter A. DeFazio, Oregon 

Maurice D. Hinchey, New York 

Patrick J. Kennedy, Rhode Island 

Ron Kind, Wisconsin 

Lois Capps, California 

Jay Inslee, Washington 

Mark Udall, Colorado 

Joe Baca, California 

Hilda L. Solis, California 

Stephanie Herseth Sandlin, South Dakota 

Heath Shuler, North Carolina 

Jim Saxton, New Jersey 

Elton Gallegly, California 

John J. Duncan, Jr., Tennessee 

Wayne T. Gilchrest, Maryland 

Chris Cannon, Utah 

Thomas G. Tancredo, Colorado 

Jeff Flake, Arizona 

Stevan Pearce, New Mexico 

Henry E. Brown, Jr., South Carolina 

Luis G. Fortun ̃ o, Puerto Rico 

Cathy McMorris Rodgers, Washington 

Bobby Jindal, Louisiana 

Louie Gohmert, Texas 

Tom Cole, Oklahoma 

Rob Bishop, Utah 

Bill Shuster, Pennsylvania 

Dean Heller, Nevada 

Bill Sali, Idaho 

Doug Lamborn, Colorado 

Mary Fallin, Oklahoma 

Kevin McCarthy, California

James H. Zoia, Chief of Staff 

Jeffrey P. Petrich, Chief Counsel 

Lloyd Jones, Republican Staff Director 

Lisa Pittman, Republican Chief Counsel 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES 

JIM COSTA, California, Chairman 

STEVAN PEARCE, New Mexico, Ranking Republican Member

Eni F.H. Faleomavaega, American Samoa 

Solomon P. Ortiz, Texas 

Rush D. Holt, New Jersey 

Dan Boren, Oklahoma 

Maurice D. Hinchey, New York 

Patrick J. Kennedy, Rhode Island 

Hilda L. Solis, California 

Nick J. Rahall II, West Virginia, ex officio 

Bobby Jindal, Louisiana 

Louie Gohmert, Texas 

Bill Shuster, Pennsylvania 

Dean Heller, Nevada 

Bill Sali, Idaho 

Don Young, Alaska ex officio 

(III)

CONTENTS

Page

Hearing held on Thursday, June 28, 2007 ............................................................ 1

Statement of Members: 

Costa, Hon. Jim, a Representative in Congress from the State of 

California ....................................................................................................... 1 

Pearce, Hon. Stevan, a Representative in Congress from the State of 

New Mexico ................................................................................................... 4

Statement of Witnesses: 

Cruickshank, Walter D., Acting Director, Minerals Management Service, 

U.S. Department of the Interior .................................................................. 12

Prepared statement of ............................................................................... 14

Response to questions submitted for the record ..................................... 90

Drake, Hon. Thelma, a Representative in Congress from the State of 

Virginia .......................................................................................................... 9

Prepared statement of ............................................................................... 10

Juettner, Bob, Borough Administrator, Aleutians East Borough, Alaska ... 44

Prepared statement of ............................................................................... 45

Moran, Hon. James P. a Representative in Congress from the State 

of Virginia ...................................................................................................... 29

Prepared statement of ............................................................................... 31

Pollard, Hon. Albert C., Former Member, Virginia House of Delegates, 

Mollusk, Virginia .......................................................................................... 38

Prepared statement of ............................................................................... 40

Sheard, Whit, Alaska Program Director, Pacific Environment, Anchorage, 

Alaska ............................................................................................................ 48

Prepared statement of ............................................................................... 50

Response to questions submitted for the record ..................................... 100

Thompson, Hon. Mike, a Representative in Congress from the State of 

California ....................................................................................................... 6

Prepared statement of ............................................................................... 8

Wagner, Hon. Frank, Virginia State Senator, Virginia Beach, Virginia ..... 33

Prepared statement of ............................................................................... 35

Response to questions submitted for the record ..................................... 36

Additional materials supplied: 

Alaska Independent Fishermen’s Marketing Association, Letter submitted 

for the record ................................................................................................. 58

Alaska Marine Conservation Council, Letter submitted for the record ....... 59

Open letter to President George W. Bush submitted for the record 

by the Alaska Independent Fishermen’s Marketing Association, 

Alaska Center for the Environment, Alaska Longline Fishermen’s 

Association, et al. ................................................................................... 62

‘‘Alaskans Urge Congress to Support HR 1957 and S 1311 - the 

Bristol Bay Protection Act’’ ................................................................... 63

‘‘Ten Reasons to Protect Alaska’s Bristol Bay’’ from Offshore Oil 

and Gas Drilling .................................................................................... 65

‘‘Economic Value of Bristol Bay and Southeastern Bering Sea 

Fisheries’’ ................................................................................................ 66

Maps and charts ........................................................................................ 67

Bristol Bay Native Association, Bering Sea Fishermen’s Association, 

Bristol Bay Economic Development Corporation, et al., Letter 

submitted for the record ............................................................................... 84

Gemmill, Faith, Resisting Environmental Destruction on Indigenous 

Lands (REDOIL), Statement submitted for the record ............................. 75

Odum, Marvin, Executive Vice President, EP Americas, Shell Energy 

Resources Company, Statement submitted for the record ........................

Schaefer, Jack, Vice President, Native Village of Point Hope, Letter and 

Resolution submitted for the record ............................................................ 87

(1)

OVERSIGHT HEARING ON ‘‘THE MINERALS 

MANAGEMENT SERVICE’S PROPOSED FIVEYEAR PROGRAM FOR OIL AND GAS LEASING ON THE OUTER CONTINENTAL SHELF.’’

Thursday, June 28, 2007

U.S. House of Representatives 

Subcommittee on Energy and Mineral Resources 

Committee on Natural Resources 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:07 a.m. in Room 

1324, Longworth House Office Building, Hon. Jim Costa [Chairman 

of the Subcommittee] presiding. 

Present: Representatives Costa, Pearce, Holt, Kennedy, Jindal, 

and Gohmert. 

STATEMENT OF THE HONORABLE JIM COSTA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. COSTA. The Subcommittee of Energy and Mineral Resources 

will now come to order. 

The Subcommittee is meeting today to hear the testimony on the 

Minerals Management Service’s proposed five-year plan for oil and 

gas leasing. 

Preliminary ground rules, as we always do before the beginning 

of every meeting, under Rule 4[g], the Chairman and the Ranking 

Member may make opening statements, which I suspect we will. 

They may be included in the record under unanimous consent, and 

we do that on a pro forma basis. 

Additionally, under Committee Rule 4[h], any additional material 

for the record should be submitted by Members or witnesses within 

10 days after the hearing. That includes our distinguished colleagues who are going to testify before our first panel. And we 

would appreciate the witnesses’ cooperation, as I say, at every 

hearing by responding to any questions submitted in writing, and 

obviously we like to try to expedite that to the degree that that is 

possible. It works out better that way. 

We hopefully will be able to have the opportunity to get through 

our panels this morning at a reasonable time. And we always provide the courtesy for Members to testify. And we are very honored 

to have two of our distinguished colleagues here this morning who 

have asked to testify before the Subcommittee. 

2

Let me first begin with my opening statement. The 

Subcommittee, as we know, meets to review the Minerals Management Service’s 2007 to 2012 plan for leasing oil and gas in the 

Outer Continental Shelf. Obviously, this has been a very important 

and sometimes hotly debated issue throughout our country in 

recent years. 

We all know that the Outer Continental Shelf consists of submerged lands beyond coastal states’ waters, beginning roughly 

three nautical miles from our shores, to 200 miles off our coasts 

throughout the country. 

Therefore, the Outer Continental Shelf is an important resource 

to America and Americans’ interests from a standpoint of marine 

fisheries, as well as from a standpoint of domestic supplies of oil 

and natural gas. 

In 2004, the Outer Continental Shelf provided 29 percent of domestically produced oil, and over 20 percent of domestically produced natural gas. Therefore, an important resource. Some of that 

production is occurring off the coast of California. And I can tell 

you from, I have been a Member and a representative, and we have 

one of my colleagues here today, that it has been an issue that has 

been debated at great length over the last three decades. 

Nonetheless, we still have 44 platforms off the California coast, 

and some people don’t realize that they exist. As a matter of fact, 

as a part of the five-year plan, the California Outer Continental 

Shelf provided 30 million barrels of oil and 60 billion cubic feet of 

natural gas each year. That is significant, although compared to 

the Gulf of Mexico, it is a smaller number. 

Environmental record of oil and gas production off the coast, I 

think, of California and other parts of the country has improved in 

recent decades. Since 1970, there have been only four significant 

spills, totaling 350 barrels. There have been no reported major 

spills in the last 10 years. 

We know that during the Hurricane Katrina incidences, notwithstanding the fact that many of those platforms were closed, it was 

done in a safe and responsible way. It demonstrates that if you 

plan properly and you meet the environmental requirements, that 

it can be done with little impact to the environment. But yet, the 

controversy still continues. 

From 2007 to 2012, the five-year Outer Continental Shelf Leasing Program could provide access to up to 50 million new acres of 

Outer Continental Shelf—while being appropriately cautious in 

those regions because there are environmental concerns. It is, I 

think, very important to note, in my opinion, and I think many others, that very little vision has been established in the Minerals 

Management document outlining their plans for the 2007 to 2012 

development. And I think we will have a lot of discussion about 

that this morning because in every part of those areas, there are 

environmental concerns. 

So I think it is important that when we talk about that in comparison to the 1.7 billion acres—1.7 billion acres, imagine that. 

They are considering 50 million in the next five years, but there 

is 1.7 billion acres that is under the jurisdiction of the Minerals 

Management Service. 

3

So therefore, the 2007-2012 plan in essence only examines 1.2 

percent of the entire Atlantic Seaboard, and four of the 15 planning 

areas off the coast of Alaska. We have to do better than that, I 

think. 

Section 18 of the Outer Continental Shelf Lands Act states very 

clearly that the purpose of these five-year plans is to help meet the 

national energy needs. If a plan fails in many respects to provide 

a full analysis of the oil and gas resources in the Outer Continental 

Shelf, which is critical if we are going to talk about balancing our 

energy needs as we look toward addressing new opportunities for 

renewable resources, as well as for cellulosic fuels and conservation, as we balance our nation’s energy portfolio, which is the 

struggle that we have been dealing with really for several decades 

now in America, as we try to look at the long term, and yet reducing our dependency on foreign sources of energy, the Minerals 

Management Service and the opponents to drilling on the Outer 

Continental Shelf will argue in different ways that it is impossible 

or unnecessary to fully assess the oil and gas resources of the 

Outer Continental Shelf because the Outer Continental Shelf is 

closed to leasing under Congressional or Presidential moratorium. 

Many friends and colleagues of mine from across the country, 

including a gentleman I have great respect for, Congressman 

Thompson, believe that we should place some areas permanently 

off limits. The fact is that we need to examine all of these cases. 

But unless we have the necessary data to make informed decisions, 

we in the Minerals Management Service, I think, are falling short 

of our responsibilities. 

As Chairman of this subcommittee, I intend to try to do everything possible, working on a bipartisan basis, to try to get that information made available, and to do the appropriate due diligence. 

Simply put, ladies and gentlemen, we do not know the extent nor 

the value of the oil and gas resources out in America’s Outer Continental Shelf. We believe it is significant, but we don’t know enough 

about the extent of its value. 

Opponents to the Outer Continental Shelf drilling argue that we 

have heard this week—there was a debate on the House Floor—

that 80 percent of the oil and gas on the Outer Continental Shelf 

is already accessible to drilling. That is according to the Minerals 

Management Service. 

I believe that statistic is accurate, but it is based on very old 

data. The Minerals Management Service has not done any estimates outside the Gulf of Mexico in decades. Without adequate and 

current information on Outer Continental Shelf oil and gas resources, therefore it is difficult, frankly, to make informed judgments about the risks, as well as about the benefits associated with 

developing these areas. And we know there are benefits, and we 

know there are risks. 

The Minerals Management Service, I think, needs to begin undertaking this task. And I hope it will be the Subcommittee’s direction to work with the Minerals Management Service to undertake 

this task in a thoughtful and reflective way. 

In this plan, the Minerals Management Service, for example, 

studied the area off the coast of Virginia. And we have a colleague 

of ours here who I suspect will give us her thoughts: 

4

Congresswoman Drake. It is still under moratorium. It can’t be 

leased until the moratorium is lifted. Yet we have other areas that 

are not under moratorium. 

The same could be said for every part of the Outer Continental 

Shelf, whether we are leasing under moratorium or not. And therefore, I think there needs to be some development of priorities. 

Too much of the debate on both sides I believe have been focused 

on ambiguity, assumptions, and vigorously debated arguments. 

Ambiguity because we are basing important energy policy decisions 

on outdated information. Assumptions that something terrible will 

happen if we find out what the information is. And I think a false 

argument that we could issue leases for natural gas drilling only. 

And my good friend from Hawaii and I disagree on that point, 

Congressman Abercrombie. But I think the industry experts 

acknowledge that you can’t provide natural-gas-only leases. It is 

just not realistic when you are drilling. 

Obviously we are not going to resolve those issues on that debate 

this morning. This will continue year after year. But I think if this 

subcommittee makes a significant effort, and we begin today working with Minerals Management Service, we can have a more robust 

level of discussion with more accurate up-to-date information. And 

certainly the best information allows us to make better decisions. 

So the plan that is being developed between 2007 and 2012 

doesn’t provide, I believe, the new information that I think we need 

to have. But we need to ask for that information, and we need to 

work with them. 

So I ask the witnesses to focus on your assessment of that plan. 

We are going to be looking to hear your thoughts on how we can 

do better. And certainly we are very interested in hearing from our 

first two witnesses who are our colleagues, who represent both 

coasts of this great nation: the Eastern Seaboard, parts of it, and 

the West Coast, both tremendous resources to America. 

So before we begin with our colleagues, I will defer to the 

Ranking Member for an opening statement. 

STATEMENT OF THE HON. STEVAN PEARCE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW MEXICO 

Mr. PEARCE. Thank you, Mr. Chairman. I want to thank you for 

holding this hearing. I know that our schedule has been intense 

the last few weeks, and everyone is busy, including yourself. And 

so the fact that you can work this hearing into our schedule is significant, indeed. 

I think it is important to talk about the Minerals Management 

Service’s five-year plan. It is an important topic. It is a source of 

great revenue for the United States, but also it is a source of great 

energy, and we should be talking about what we are doing. So 

thank you very much. 

I also appreciate the process. This hearing was pretty well set 

up; witnesses and the topics were set up in a bipartisan fashion. 

It is a testament to your leadership and statesmanship, and it is 

a pleasure to serve with you on the committee. 

I would like to welcome our witnesses, Mr. Thompson and Mr. 

Moran, and especially Congresswoman Drake. She used to be a 

member of the committee before she moved up, or on, or sideways, 

5

or wherever she moved. But she used to be here slugging it out on 

this committee with us, and still continues to be a strong and 

graceful advocate for your constituents and energy development in 

Virginia’s Outer Continental Shelf. It is wonderful to have you 

back in this committee room again. 

I would also like to welcome Walter Cruickshank. He is here in 

the audience today; he is newly Acting Director of MMS. His 

knowledge of the Minerals Management Service, his administration 

of the OCS Oil and Gas Leasing Program is deep, and his service 

is appreciated. I have confidence that he will be a great steward 

of our offshore leasing program. 

Mr. Cruickshank is going to have to fill fairly large shoes, in my 

opinion. His predecessor, Ms. Johnnie Burton, was the longestserving Director of MMS in history. She retired from government 

service last month. She is highly regarded by many of us, and we 

wish her well. And we wish you well in trying to fill those shoes, 

Mr. Cruickshank. 

Last, I would like to welcome the two witnesses from Alaska who 

have traveled great distances to be with us today. Onshore, Alaska 

is the second-ranked oil-producing state; however, its Outer Continental Shelf remains untested, and a new frontier. 

I especially welcome Bob Juettner, who represents the area of 

Alaska adjacent to one of the newest prospects for energy development in Alaska, the North Aleutian Basin. Fishing has been the 

primary economic activity of the Bristol Bay Region. Bristol Bay’s 

fisheries are spectacular by any measure, and should not be minimized. This is an area where the local people want to determine, 

through their process, whether both energy development and current commercial fishing can take place in harmony, and I welcome 

to that task. 

The Gulf of Mexico is a wonderful example of where fishing and 

commercial oil production has worked well together. In the Continental U.S., 34 percent of our nation’s seafood comes from the Gulf 

of Mexico. At the same time, the Gulf of Mexico is the source of 

20 percent of our nation’s domestic natural gas, and 30 percent of 

our nation’s oil. So the harmony between the industries has worked 

well in that region. And we can assume that those who say that 

it is not possible for the two to work together is simply a myth, proposed by those who want to exclude one activity or the other. 

However, I believe that local people should have the most to say, 

and so I look forward to Mr. Juettner’s testimony. 

We are all here today to talk about the importance of the Outer 

Continental Shelf Leasing Program. One of the few silver linings 

that we experienced during Hurricanes Katrina and Rita was the 

incredible environmental safety record that we experienced. Not 

one drop of oil spilled during those two hurricanes. There were no 

major spills. It is a testament to our engineering and our safety 

managers in the oil and gas business. 

However, a painful lesson was taught in the aftermath of the two 

hurricanes. We temporarily lost 20 percent of our domestic natural 

gas and 30 percent of our domestic oil. Prices of gasoline at the 

pumps skyrocketed, and constituents suffered. 

One thing that makes me uncomfortable about the hearing today 

is an action that we took earlier in this Congress, during Speaker 

6

Pelosi’s first 100 hours. H.R. 6 will have significant impact on our 

Outer Continental Shelf Leasing Program, so in fact the whole 

hearing today is possibly undermined by that bill that we passed 

that could trigger, according to testimony that we heard in the 

royalties-at-risk hearing in this subcommittee. We heard the testimony during that hearing that injunctions and lawsuits could stop 

all leasing for a period of three years. And so I worry that our 

whole five-year program could simply be moot while we allow the 

trial lawyers to fight it out in court. 

This legislation was passed by the House 264-163. It is not good 

for our government’s resources, not good for our government’s income, and it is not good energy policy, and undermines the entire 

intent of the five-year program. 

Again, I look forward to the testimony and discussion. I just ask 

that things be put in perspective, and welcome you all. 

Thanks again, Mr. Chairman, for the events leading up to this 

hearing. 

Mr. COSTA. Thank you very much, gentleman from New Mexico. 

We would now like to recognize our first panel of witnesses, 

which is our colleagues. I understand that Representative Moran is 

on his way, and hopefully he will get here before his two colleagues 

complete their testimony. We certainly want to be able to accommodate Representative Moran. 

But our first witness is a gentleman who I have had the pleasure 

to work with and to know for going on three decades now, back to 

our old California days, who has done a terrific job in representing 

the people of the northern coast of California, one of the crown 

jewels of California’s tremendous natural resources. And as he will 

tell you, he represents some of the best parts of California. 

Congressman Mike Thompson. 

STATEMENT OF THE HONORABLE MIKE THOMPSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 

CALIFORNIA 

Mr. THOMPSON. Thank you, Mr. Chairman and Mr. Pearce, for 

holding the hearing and giving me the opportunity to come in and 

testify on behalf of legislation that I have introduced, that would, 

in fact, protect a good portion of California’s coast. I am fortunate 

enough to represent over a third of California’s coastline, the biggest stretch of coastline in any Congressional district in the continental United States. And Mr. Chairman, thank you for recognizing the beauty and the significance of that area. 

And I also appreciate, Mr. Chairman, your comments, that as 

this process unfolds, it is going to provide a thoughtful and honest 

review of not only our resource availability, but our energy needs. 

I agree with you; I think that is important to do. 

And Mr. Pearce, I appreciate the fact that you mentioned the 

importance of local input on these issues. And I say that in part 

because the provisions of my bill have historically been supported 

by over 85 percent of the people that live not only along the coast 

of my district, but throughout my entire district. 

And I also recognize that none of the plans to date propose to let 

any new leases off the coast in my district. But as we saw just 

Tuesday of this week, there is always discussion about and atVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
7

tempts to lift or to reverse the moratorium. And every year since 

I have been here I believe that that has happened, and every year 

it provides tremendous heartburn for the people that I represent. 

And I also understand the argument that is made—and Mr. 

Chairman, you and I have had this discussion in person a number 

of times—with the argument that is made not only by you, but by 

a number of people that may, in fact, be impractical, to permanently protect the entire OCS from any type of exploration. But as 

you point out, I strongly believe that there should be some exceptions to this thought. And I believe I represent one of those exceptions on the north coast. 

And in my district on the north coast, it is a pretty unique area. 

We have one of four upwelling regions found in the entire world. 

And an upwelling region is an area, which because of marine and 

climatic effects, produces an abundance of food for marine life. 

These areas, because of the way the currents work and the way the 

ocean bottom is configured, enhance seaweed and phytoplankton 

growth in the area, which translates into a very productive ecosystem and a very important fishery in the area that I represent. 

And upwelling regions make up only 1 percent of all of the 

oceans. But about half of the fish catch worldwide comes from 

these upwelling regions. And you can imagine the impact, notwithstanding the tremendous success that the oil industry has had in 

recent years from preventing and avoiding any type of spills. But 

you can imagine the impact that a spill would have on a fishing 

industry. And in my area, it is the biggest salmon area outside of 

Alaska in the country. So it is very, very important to the folks 

who live there. 

And my district is also very rich in tourism. It has generated a 

tremendous amount of income, which is important for local governments, for the state government, and nationally. And those tourist 

businesses that operate up there, they operate under the premise 

that they are going to have beautiful, clean beaches, and unobstructed, spectacular views. And that is something that concerns 

them, when you put them at risk at all. 

I also want to point out that this is the committee that last year, 

under the chairmanship of former Chairman Richard Pombo, 

passed a bill that I had that protected, put into permanent wilderness area, a good portion of this same district whose coasts we are 

trying to protect. Signed into law by the President, and specifically 

I want to point out the Lost Coast area. 

Mr. Chairman, you know it well. And it was described not by 

you, not by me, but the Bush Administration, as the crown jewel 

of all wilderness areas throughout the entire United States of 

America. It is not only beautiful, but it is very, very rugged. And 

if there were to be any type of mishap in that area, it would be 

nearly impossible to provide a quick response to get in there and 

contain that spill, and to be able to clean it up. We don’t have the 

access, we don’t have the resources to do it. 

So while all areas maybe shouldn’t be protected in perpetuity, 

there are some that should. And I believe that this area is one of 

those. And the bill that I have before the committee, H.R. 2758, 

would provide that protection. 

8

I appreciate the opportunity for you to hear my testimony. And 

I would like to be able to provide my written testimony to the committee. 

[The prepared statement of Mr. Thompson follows:]

Statement of The Honorable Mike Thompson, a Representative in Congress 

from the State of California 

Chairman Costa, Ranking Member Pearce and Members of the committee, thank 

you for the opportunity to provide testimony on H.R. 2758, the Northern California 

Ocean and Coastal Protection Act. I appreciate the committee’s invitation to speak 

here today about my bill that would permanently prohibit oil and gas drilling off 

the coasts of Mendocino, Humboldt and Del Norte Counties in my district. 

Mister Chairman, I understand the proposed Mineral Management Service’s leasing program does not include any new leasing in the Pacific Region, and that the 

Presidential withdrawal and Congressional moratorium on oil and gas leasing are 

still in place. However, as we saw on the House floor Tuesday, every year there are 

attacks against the Congressional moratorium and I am concerned that one day it 

might be lifted. While I understand the argument made by many of my colleagues 

that currently it may not be practical to provide permanent protection from offshore 

drilling for the entire Outer Continental Shelf, there are some areas of the OCS 

where permanent protection is sensible and absolutely necessary. My district, which 

comprises the longest coastline of any Congressional district in the continental U.S. 

and one third of the California coast, is an area that deserves such protection. 

Northern California’s coast is part of a unique upwelling region found along the 

West Coast, which is one of only four upwelling regions in the world. Upwelling regions are coastal areas that support extremely abundant and productive marine life. 

Upwelling brings cold, nutrient-rich waters up from the ocean depths that, when 

combined with sunlight, enhance seaweed and phytoplankton growth. The abundant 

seaweed and phytoplankton that upwelling zones support provide energy for some 

of the most productive ecosystems in the world, including many of our nation’s more 

important fisheries. It supports some of the largest populations of salmon south of 

Alaska—all the more notable since these stocks are at the very southern end of the 

Pacific salmon range. Rich Dungeness crab fishing grounds, along with rockfish, sole 

and urchin also support fishing communities tucked along this rugged coast. According to the National Oceanic and Atmospheric Administration, while upwelling regions make up only one percent of the world’s oceans, they contribute to approximately half of the world’s fish catch. In 2006, California’s North Coast experienced 

a commercial fishery failure that virtually shut down salmon fishing along 700 

miles of coast, costing our local and state economies more than $35 million. Imagine 

the cost if an oil spill were to occur that devastated all of the North Coast fishing 

industries. 

My district also supports a large tourism industry vital to our local and state 

economies. For instance, over 2.7 million people visited Mendocino County Coastal 

State Parks in 2006, and bed tax revenues for the Mendocino coast alone totaled 

more than $3.5 million in the same year. In 2005, combined travel spending and 

travel-related earnings in Mendocino, Humboldt and Del Norte counties totaled 

more than $672 million and $233 million dollars, respectively. The thriving tourism 

industry in my district is dependent upon the spectacular views and pristine coves 

and beaches along the North Coast, all of which would be threatened if an oil spill 

occurred off the coast. In addition, given the rural and rugged nature of my district, 

the effects of a spill would be particularly disastrous given limited accessibility and 

the resources readily available for clean up. Indeed, part of my district includes the 

only roadless coastal area in the continental U.S.—the ‘‘Lost Coast’’—whose unspoiled wilderness is treasured by hikers. Containing and cleaning up a spill in this 

area would be extremely difficult, if not impossible under most conditions. Even assuming no accidents would occur—a highly unlikely scenario—just the shoreside 

support and infrastructure needed to maintain offshore oil operations in this area 

would cause significant damage to this rugged, but fragile, environment. 

It is also important to recognize that no offshore oil and gas leasing has occurred 

off the Northern California coast since 1964, and that all of those leases were relinquished by 1968 due to the negligible quantity and quality of hydrocarbons thought 

to be present off the North Coast. Before 1964, offshore drilling off the North Coast 

was nonexistent. In areas like California’s North Coast where ecological and current-use economic benefits are high and the value to our nation’s energy resources 

low, permanent protection from offshore drilling makes good sense. 

9

In closing, I would like to reiterate that as a result of the unique and incredibly 

productive ecosystem found within its waters and its renowned natural beauty, 

Northern California’s coast brings biological and economic benefits to our entire 

country—benefits that warrant protection. An oil spill off our beautiful North Coast 

would be economically and ecologically disastrous. My bill will ensure that never 

happens. 

I want to thank you for your time and consideration of this important piece of 

legislation. I look forward to working with the committee to provide permanent protection from offshore oil and gas drilling for California’s North Coast. 

Mr. COSTA. Without objection, that would be the order of the day. 

And Congressman Thompson, you did leave out two of what I 

think are the wonderful richness of your district, and that is the 

redwoods and the wine. So I think we——

Mr. THOMPSON. If I could have another five minutes, Mr. Chairman, I will be happy to get into those. 

[Laughter.] 

Mr. COSTA. No, it has been said. 

Another distinguished colleague who we are very pleased to have 

here this morning, who represents Virginia’s Second District, a 

very wonderful part of America, a wonderful part of Virginia, Thelma Drake. And we are glad to have you here this morning. 

STATEMENT OF THE HONORABLE THELMA DRAKE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA 

Ms. DRAKE. Good morning, Chairman Costa, Ranking Member 

Pearce, and Congressman Gohmert. It truly is a great honor for me 

to be back with you today, and to speak about an issue of such importance to the Commonwealth of Virginia. 

Americans are paying too much to heat their homes, fuel their 

cars, and run their businesses. Energy costs in the United States 

have skyrocketed, and our dependence on foreign sources of energy 

is placing our economy and national security at risk. 

The increased global demand for energy by emerging countries, 

such as China and India, will only further drive up the cost for 

American businesses and families in the future. In fact, Dow 

Chemical Company, a company founded in Michigan in 1897, has 

had to reduce its employee head count by 7,000 since 2002, and is 

currently planning on moving 10,000 American jobs overseas, to 

countries like Malaysia, Kuwait, Saudi Arabia. This is just one example of how the cost of energy is driving away our manufacturing 

base, which in turn adversely impacts our labor market and our 

overall economy. 

Many steps need to be taken today to stabilize energy prices and 

liberate our nation’s dependence on volatile oil- and gas-rich nations. 

One such step is tapping our vast domestic resources, such as 

those lying in the Outer Continental Shelf. The Minerals Management Service five-year plan for the OCS provides such a step forward. For far too long, the OCS in the Atlantic has been locked up. 

While our oil and gas prices have seen a steady increase, our options in providing a solution to our citizens have been limited. 

However, the new MMS five-year plan has broken these chains, 

and has given back hope to a nation that remains hostage to foreign sources of energy. Including Virginia in the five-year plan will 

10

provide valuable answers to such questions as how much of a resource is off the coast, where these energy resources are located, 

and the challenges of harvesting these resources. It would be shortsighted not to seek these answers, as I believe the majority of 

Americans would agree that these are much-needed steps if we are 

to achieve true energy independence. 

I believe MMS’s five-year plan will provide the insight that the 

Federal government and the Commonwealth of Virginia are seeking, as both entities explore real solutions to our ever-increasing 

energy problems. It is noteworthy that the inclusion of Virginia in 

the five-year plan was a result of the expressed intent of the people 

of the Commonwealth. 

In 2006, the Virginia General Assembly, under the leadership of 

Senator Frank Wagner, passed a comprehensive energy plan that 

included the desire to explore what resources lie off the coast of 

Virginia. More recently, this past year Governor Tim Kaine expressed his interest to MMS for this to occur, as well. 

I must stress that the support of the Commonwealth of Virginia 

came only after the conclusion was drawn that there were appropriate environmental safeguards and distance from shore. 

While I am pleased to see Virginia’s inclusion in the five-year 

plan, I must admit that I am dismayed by the map that MMS is 

forced to use to establish Federal OCS offshore administrative 

boundaries which determine OCS state-adjacent administrative 

zones. These boundaries, as they are currently drawn, do not accurately reflect the relative boundaries of states; and furthermore, penalize states such as Virginia with concave coastlines, and result 

in grossly unfair zoning. 

This inequity affects all of the Commonwealth’s activities in the 

ocean, including sand and gravel dredging, agriculture, and offshore renewable energy projects, including wind, waves, and currents, in which Old Dominion University in Norfolk is actively engaged. 

Before I conclude, I must say that I support the increased use 

of renewable energy projects in this country. The energy policy of 

the 21st century cannot rely solely on traditional sources of energy; 

therefore, renewable energy sources must play a key role in any 

long-term solution to our nation’s energy needs. 

That being said, the reality is that all of the renewable energy 

we produce today would not solely keep the lights running, our 

homes heated and cooled, and our cars functioning. As a result, we 

must allow MMS to research and thoroughly investigate what domestic assets of natural gas are contained off the coast of Virginia, 

while continuing to approve policies that look to renewable energy 

to meet the needs of the future. 

Mr. Chairman, I thank you for this opportunity. I thank you for 

the work that you are doing. I am delighted to be able to speak 

here to you today on such an important issue, both for our nation 

and for the Commonwealth of Virginia. 

[The prepared statement of Ms. Drake follows:]

Statement of The Honorable Thelma Drake, a Representative in Congress 

from the State of Virginia 

Good Morning Chairman Costa, Ranking Member Pearce and other Members of 

the Subcommittee. 

11

As a former member of this Subcommittee, it is a great honor for me to be sitting 

here on the other side of the dais to speak about an issue of great importance to 

the Commonwealth of Virginia. 

Americans are paying too much to heat their homes, fuel their cars, and run their 

businesses. Energy costs in the United States have skyrocketed and our dependence 

on foreign sources of energy is placing our economy and national security at risk. 

The increased global demand for energy by emerging economies such as China and 

India will only further drive up the cost for American businesses and families in 

the future. As a result, many steps need to be taken today to stabilize energy prices 

and liberate our nation’s dependence on volatile oil- and gas-rich nations. One such 

step is tapping our vast domestic resources—such as those lying in the Outer Continent Shelf (OCS). 

The Minerals Management Service’s 5-year plan for the OCS provides such a step 

forward. For far too long, the OCS in the Atlantic has been locked up. While our 

oil and gas prices have seen a steady increase, our options in providing a solution 

to our citizens have been limited. However, the new MMS 5-year plan has broken 

those chains and has given back hope to a nation that remains hostage to foreign 

sources of energy. 

Including Virginia in the 5-year plan will provide valuable answers to such questions as how much of a resource is off the coast, where these energy resources are 

located, and the challenges of harvesting these resources. It would be short-sighted 

not to seek these answers as I believe the majority of Americans would agree that 

these are much needed steps if we are to achieve true energy independence. I believe the MMS 5-year plan will provide the insight that the federal government and 

the Commonwealth of Virginia are seeking as both entities explore real solutions 

to our ever-increasing energy problems. 

It is noteworthy that the inclusion of Virginia in the 5-year plan was a result of 

the expressed intent of the people of the Commonwealth. In 2006, the Virginia General Assembly, under the leadership of Senator Frank Wagner, passed a comprehensive energy plan that included the desire to drill off the coast of Virginia. More recently, this past year Governor Tim Kaine expressed his interest to MMS for this 

to occur as well. I must stress that the support of the Commonwealth of Virginia 

came only after the conclusion was drawn that there were appropriate environmental safeguards and distance from shore. 

While I am pleased to see Virginia’s inclusion in the 5-year plan, I must admit 

that I am dismayed by the map the MMS has adopted to establish the federal OCS 

offshore administrative boundaries which determine OCS state adjacent administrative zones. These boundaries, as they are currently drawn, do not accurately reflect 

the relative boundaries of states and furthermore penalize states, such as Virginia, 

with concave coastlines and result in grossly unfair zoning. This inequity affects all 

of the Commonwealth’s activities in the ocean including sand and gravel dredging, 

mariculture, and offshore renewable energy projects involving wind, waves and currents. 

Before I conclude, I must say that I support the increased use of renewable energy 

projects in this country. The energy policy of the 21st century cannot rely solely on 

traditional sources of energy; therefore, renewable energy sources must play a key 

role in any long-term solution to our nation’s energy needs. That being said, the reality is that all of the renewable energy we produce today would not solely keep the 

lights running, our homes heated and cooled and our cars functioning. As a result, 

we must allow MMS to research and thoroughly investigate what domestic assets 

of natural gas are contained off the coast of Virginia while continuing to approve 

policies that look to renewable energy to help meet the needs of the future. 

Mr. Chairman, thank you for the opportunity to be here today to speak about 

such an important issue for our nation and for the Commonwealth of Virginia. 

Mr. COSTA. Thank you very much, Congresswoman Drake. We do 

appreciate your testimony. It was thoughtful and reflective, and 

gives a perspective for I think all of us to weigh in, and we hope 

you will continue to be a part of this effort as we do our due diligence to determine how we develop a balanced policy that focuses 

on our energy resources in an environmentally sound and constructive way. 

So this subcommittee, as you know because you served previously, has difficult balances to try to perform, and we are trying 

12

to do that in a way that makes sense. So we appreciate your testimony very much. 

Ms. DRAKE. Thank you, Mr. Chairman. 

Mr. COSTA. All right. Do we have any report on Congress Member Moran? Do we have any sense? Because otherwise I would—

OK. Well, we are going to have to begin with the second panel. And 

what we will try to do is squeeze Mr. Moran in after that, depending upon when he arrives, after whichever panel has completed its 

testimony. 

All right. That brings us to our next witness. And that witness 

is Walter Cruickshank. 

And you have already gotten a very positive buildup from my colleague, the Ranking Member. And we look forward to your testimony. 

You are a distinguished panel of one, so you have a lot of responsibility this morning. You are the new Acting Director of the Minerals Management Service. We will now recognize you for five minutes. And of course, the Chairperson as well as the other members 

appreciate all witnesses following the five-minute rule. And you are 

very familiar with the lighting system here, so we would appreciate 

that. If you have greater length to your testimony, we will submit 

that for the record in a written statement. And then concluding 

that, we will begin the questioning. 

Mr. Cruickshank. 

STATEMENT OF WALTER CRUICKSHANK, ACTING DIRECTOR, 

MINERALS MANAGEMENT SERVICE, U.S. DEPARTMENT OF 

THE INTERIOR 

Mr. CRUICKSHANK. Thank you, Mr. Chairman and Mr. Pearce, 

for bringing——

Mr. COSTA. Bring the microphone a little closer. We want to 

make sure we can hear you. 

Mr. CRUICKSHANK. I appreciate the opportunity to discuss the 

Department of Interior’s Outer Continental Shelf five-year oil and 

gas leasing program today. 

The Department serves the public through careful stewardship of 

our nation’s natural resources, and we also play an important role 

in supplying energy to the country. About one third of all the 

energy produced in the United States comes from resources managed by the Department of the Interior. 

Since the Minerals Management Service was created in 1982, the 

OCS has produced about 11 billion barrels of oil, and over 116 trillion cubic feet of natural gas. This has been accomplished with a 

remarkable environmental record. Over the last 20 years, less than 

1/1000 of 1 percent of oil produced offshore has been spilled. 

Oil and natural gas will continue to be vital to the American 

economy. According to the Energy Information Administration, over 

the next 20 years Americans’ demand for energy is expected to 

grow by 25 percent, with oil and natural gas accounting for the majority of energy use through the year 2030. EIA’s projections show 

that OCS oil and gas will remain a vital part of domestic energy 

portfolio. 

13

Within the next five years, offshore production will likely account 

for more than 40 percent of domestic oil production, and 25 percent 

of domestic natural gas production. 

Last year, MMS completed an assessment of undiscovered recoverable resources that may exist on the OCS. Our mean estimate is 

that the OCS contains about 86 billion barrels of oil, and 420 trillion cubic feet of natural gas. This represents about 60 percent of 

the nation’s remaining undiscovered oil, and 40 percent of its remaining natural gas. And this is why the OCS is so critical to the 

nation’s energy future. 

Access to these resources is determined by the five-year OCS oil 

and gas leasing program. The OCS Lands Act requires the Department to prepare a program that specifies the size, timing, and location of areas to be considered for leasing. 

It takes over two years to complete the process of preparing a 

program, and along the way at multiple steps, we solicit comments 

from coastal states, Federal agencies, stakeholders, other interested parties, and the general public. No area in the OCS can be 

offered for leasing unless it is included in the final five-year program. 

On April 30 the Secretary transmitted to Congress and the President the proposed final five-year OCS oil and gas leasing program 

for 2007 to 2012. As required by the OCS Lands Act, the Secretary 

may not approve the final program until 60 days after transmittal. 

The 60th day is tomorrow, at which point the Secretary may approve the program that would take effect July 1, and govern our 

OCS program for the next five years. 

In developing the program, MMS held public meetings throughout the areas that were under consideration for leasing, and solicited comments nationwide. We received almost 125,000 comments 

throughout the preparation of the program, about three quarters of 

which supported expanding the amount of acreage that would be 

offered for oil and gas leasing consideration. 

The proposed final program includes 21 lease sales and eight 

planning areas. Twelve sales are proposed for the Gulf of Mexico, 

eight offshore Alaska, and one in the mid-Atlantic planning area off 

the coast of Virginia. Our analysis indicates that this program 

could result in an estimated production of an additional 10 billion 

barrels of oil, and 45 trillion cubic feet of natural gas, generating 

over $170 billion in today’s dollars of net benefits for the nation. 

We know that there has been particular concern over proposed 

sales in portions of the mid-Atlantic and North Aleutian Basin 

planning areas. As you noted, Mr. Chairman, the mid-Atlantic remains under Presidential withdrawal and Congressional moratorium, and no leasing will occur unless the moratorium is discontinued and the withdrawal modified. 

The North Aleutian Basin is included in the program, which 

would support of the State of Alaska and the local communities 

closest to the proposed sale area. MMS will work closely and cooperatively with the State of Alaska, the Aleutian’s East Borough, 

and others in the area, and provide ample opportunity for public 

input during a planning process that will lead to a decision on 

whether or not to hold the lease sale. 

14

To help make this a meaningful process, MMS convened a meeting of stakeholders, scientists, and state and local government administrators with particular knowledge of the resources in this 

area to help us identify the most critical information needs and 

plan new environmental studies for the North Aleutian Basin. 

As an example, on Tuesday of this week we announced the partnership with NOAA’s National Marine Mammal Laboratory to conduct a $5 million, 3.5-year study on the North Pacific White Whale. 

Additional studies on other issues will be conducted in 2008 and 

beyond. And this is just an example of our approach to understanding the issues and decision-making in all areas of the OCS. 

The Department of MMS remains committed to doing our part 

to provide access to both traditional and alternative energy resources on Federal lands as a critical component of a balanced, 

comprehensive energy policy. 

Mr. Chairman, this concludes my statement, and I would be 

happy to answer any questions that you or other members of the 

Subcommittee may have. 

[The prepared statement of Mr. Cruickshank follows:]

Statement of Walter D. Cruickshank, Acting Director,

Minerals Management Service, U.S. Department of the Interior 

Thank you for the opportunity to appear before the Subcommittee today to discuss 

with you the Department of the Interior’s Minerals Management Service (MMS) 

Outer Continental Shelf (OCS) oil and gas leasing program. This Subcommittee has 

played an important role in shaping the Nation’s domestic energy program, particularly with regard to encouraging environmentally sound development of our domestic oil and gas resources on the OCS. 

The Department and its bureaus, including the MMS, serve the public through 

careful stewardship of our nation’s natural resources. The Department also plays an 

important role in domestic energy development. One third of all energy produced in 

the United States comes from resources managed by the Interior Department. 

The MMS has two significant missions: managing access to offshore Federal 

energy and mineral resources and managing revenues generated by Federal and 

Indian mineral leases, on and offshore. 

Managing access has resulted in OCS production of almost 11 billion barrels of 

oil and more than 116 trillion cubic feet of natural gas since MMS’s creation in 

1982. To date since 1982, the number of active OCS leases has increased by 172 

percent and oil production is about 59 percent greater, in spite of the drop in production from the 2004-2005 hurricane seasons.

Nation’s Energy Outlook

The United States continues to face an energy challenge with high prices and increasing dependence on foreign supplies. Our security, economy, and our quality of 

life are dependent on energy. As this Committee knows well, there is no single solution. Achieving energy security will require diligence on both the supply and demand sides of the energy equation. 

Oil will continue to be vital to the American economy. According to the Energy 

Information Administration (EIA), over the next 20 years Americans’ demand for 

energy is expected to grow 25 percent. [See figure A: EIA projection of U.S. energy 

consumption] Even with more renewable energy production expected, oil and natural gas are projected to account for a majority of energy use through 2030. This 

projection incorporates continued gains in energy efficiency and movement away 

from energy-intensive manufacturing to less energy intensive service industries. Offshore oil and gas production will continue to be a vital part of our Nation’s domestic 

energy resource portfolio. [See Figure B: EIA projection of U.S. energy resource production] 

Continued reliance on oil and natural gas coupled with the need to reduce our 

dependence on foreign energy supplies causes us to look increasingly at the potential oil, natural gas and other energy resources from Federal waters on the Outer 

Continental Shelf (OCS) to enhance environmentally safe domestic energy production. 

15

1 Energy Information Administration, Annual Energy Outlook 2007 Data (National Energy 

Modeling System run AEO2007.D112106A). 2 Report to Congress: Comprehensive Inventory of U.S. OCS Oil and Natural Gas Resources. 

http://www.mms.gov/revaldiv/PDFs/FinalInvRptToCongress050106.pdf 

Today, MMS administers about 7,800 leases and oversees nearly 4,000 facilities 

on the OCS. Based on EIA’s reports on imports by country of origin, if the Federal 

OCS were treated as a separate country, it would rank among the top five nations 

in the world in terms of the amount of crude oil and second in natural gas it supplies for annual U.S. consumption. According to MMS’s calculations, within the next 

5 years, offshore production will likely account for more than 40 percent of domestic 

oil and 25 percent of U.S. natural gas production, owing primarily to deep water 

discoveries in the Gulf of Mexico.

OCS Role in Nation’s Energy Portfolio

Much of the future United States oil and gas demand will have to be met by OCS 

production, especially from new areas in the Gulf of Mexico and Alaska. 

The Gulf of Mexico continues to represent a major domestic energy source for the 

United States. There is intense interest in oil and gas potential in the deep and 

ultra-deep water areas. Exploratory drilling in the deep water increased in 2005 despite the disruptions caused by hurricanes; and 12 new deep water discoveries were 

announced in 2006. Recent discoveries in the ultra-deep waters of the Gulf of Mexico 

represent a significant increase in oil and gas supplies for decades to come. The 

large volume of active deep water leases, the steady drilling program, and the significant, ongoing investment in deep water infrastructure indicate that the deep 

water Gulf of Mexico will continue to be an integral part of the Nation’s energy supply. 

The EIA data 1 shows a trend of increasing oil production from the OCS to about 

750 million barrels per year by 2011. EIA projects natural gas production to increase to 4 trillion cubic feet by 2012 and sustain that level through approximately 

2019. Significant additional oil and natural gas production is expected when new 

projects, like Atlantis, Thunder Horse, and Independence Hub, come on line in 2007 

and 2008. However, new deep water natural gas production may not keep pace with 

the expected declines in production from the shallow waters of the Gulf of Mexico, 

and we anticipate natural gas production in the near term to be somewhat lower. 

To encourage energy development from Federal offshore lands, MMS provides an 

orderly and predictable schedule of competitive oil and gas lease sales. Production 

from leases issued as a result of these sales will contribute substantially to future 

domestic oil and gas production and will provide bonuses, rentals and royalties to 

the U.S. Treasury and adjacent coastal states.

2006 Resource Assessment

Last year, as part of the OCS inventory requirements of the Energy Policy Act 

of 2005, MMS completed an assessment of the potential quantities of undiscovered 

technically recoverable oil and gas resources that may be present on the OCS 2. According to this assessment, we estimate (at the mean level) that the OCS contains 

86 billion barrels of oil (as oil and natural gas liquids/condensate) and 420 trillion 

cubic feet of natural gas. For comparison, the most recent resource estimates from 

the United States Geological Survey National Oil and Gas Assessment indicate that 

the total mean, undiscovered technically recoverable resources for onshore and State 

owned waters offshore are approximately 57 billion barrels of oil (as oil and natural 

gas liquids/condensate) and 627 trillion cubic feet of natural gas. Thus, the OCS contains about 60 percent of the Nation’s remaining undiscovered technically recoverable oil (as oil and natural gas liquids/condensate) and 40 percent of its natural gas. 

[See Figure C: Resource Assessment Map] 

Of the 1.76 billion acres of Federal offshore lands on the OCS, about 600 million 

acres are not available for oil and gas leasing. When the 2006 resource assessment 

was completed, areas under congressional moratoria or Presidential withdrawal included the North Aleutian Basin off Alaska, the Pacific, the Eastern Gulf of Mexico, 

and the Atlantic. The potential resource in these areas is estimated to be approximately 18 billion barrels and 76 trillion cubic feet of gas, or approximately 20 percent of the undiscovered technically recoverable resources in the OCS. There is 

great uncertainty regarding the resource potential in areas where leasing has been 

prohibited and where the last geophysical surveys and drilling exploration occurred 

more than 25 years ago.

Five-Year OCS Oil and Gas Leasing Program

The Outer Continental Shelf Lands Act (OCSLA) requires the Secretary to develop a 5-year schedule of oil and natural gas lease sales in specific offshore areas. 

These specific areas are to be selected after an analysis comparing oil and gas bearVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00019 Fmt 6633 Sfmt 6621 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
16

ing regions of the OCS and receipt of public comments, including comments from 

each coastal state governor. Our current program runs through June 30, 2007. MMS 

has recently completed work on the next five year program, which will cover July 

1, 2007 through June 30, 2012. 

The OCSLA requires the Secretary to determine size, timing, and location of sales 

proposed in a 5-year program. Section 18 of the OCSLA requires an analysis of the 

economic, social, and environmental values of all of the resources of the OCS and 

the potential impact of oil and gas exploration on the environment. Specific factors 

which must be analyzed and considered in deciding where and when to lease include: 

• existing information on the geographical, geological, and ecological characteristics of such regions; 

• equitable sharing of developmental benefits and environmental risks among the 

various regions; 

• location of such regions with respect to regional and national energy markets; 

• location with respect to other current and anticipated uses of the sea and seabed; 

• expressed industry interest; 

• laws, goals, and policies of affected states specifically identified by governors; 

• relative environmental sensitivity and marine productivity of different areas of 

the OCS; and 

• environmental and predictive information for different areas of the OCS. 

The Act requires the Secretary to obtain a proper balance between the potentials 

for environmental damage, the discovery of oil and gas, and adverse impact on the 

coastal zone, using cost-benefit analysis. 

It takes over two years to complete the Section 18 process. Major steps in developing a 5-Year Program include: 

• Request for Information (RFI) (this is only a request for information—not a specific proposal) 

• Draft Proposed Program (all areas identified in the RFI that are not proposed 

for leasing consideration are excluded at this stage) 

• Proposed Program/Draft Environmental Impact Statement (EIS) 

• Proposed Final Program/Final EIS 

• Approval 

• New Program in Effect (for next 5 years) 

Public meetings were held throughout the areas that were considered for future 

leasing and comments solicited, analyzed, and incorporated where appropriate. This 

5-Year Program had a significant outpouring of comment, especially from the general public. Over 73,600 comments were received on the Proposed Program. Out of 

these comments, over 73,400 were from the general public. A majority of the commenters, almost 75 percent, supported a 5-year plan that offers increased acreage 

for offshore oil and gas development planning. These comments focus on the instability in the Middle East, American military operations in Iraq, and high energy 

prices in the United States. Approximately 25 percent of the private citizens who 

wrote letters oppose development of the domestic OCS, viewing the environmental 

hazards as too great a risk for limited energy resources.

Proposed Final OCS Oil and Gas Leasing Program for 2007-2012.

On April 30, the Secretary of the Interior transmitted to Congress and the President the Proposed Final 5-Year Outer Continental Shelf Oil and Gas Leasing Program. This Program will guide the Department’s decisions on domestic energy leasing on the OCS from 2007 to 2012. As required by section 18 of the OCSLA, the 

Secretary may not approve the final program until at least 60 days following submission to Congress and the President. Therefore, the Secretary may approve this 

new program tomorrow, June 29. The program would then take effect on July 1. 

The 2007-2012 Program proposes 21 lease sales in eight planning areas. Twelve 

sales are proposed for the Gulf of Mexico, eight off of Alaska and one in the MidAtlantic Planning Area, off the coast of Virginia. Our analysis indicates that implementing the new 5-Year Program for 2007-2012, would result in a mean estimate 

of an additional 10 billion barrels of oil, 45 trillion cubic feet of gas, and $170 billion, in today’s dollars, in net benefits for the nation, over a 40-year time span. 

The Program proposes to continue annual lease sales in the Central and Western 

Gulf of Mexico. The Program proposes to offer new areas of the ‘‘Sale 181 Area’’ in 

the Central Gulf in October 2007. In accordance with the Gulf of Mexico Energy Security Act, signed by President George W. Bush on December 20, 2006, new acreage 

will be offered in portions of the Sale 181 Area in the Eastern Gulf in March 2008, 

as well as the ‘‘181 South Area’’ in the Central Gulf, which is scheduled to be offered 

in 2009, following completion of the supplemental environmental impact statement. 

17

The total acreage of new areas in the Gulf offered under the proposed program is 

8,337,443 acres. 

The leasing program proposes a schedule of eight sales in Alaska: two in the 

Beaufort Sea; three in the Chukchi Sea; up to two in Cook Inlet; and one in the 

North Aleutian Basin. These areas would be subject to environmental reviews, including public comment, and extensive consultation with state and local governments and tribal organizations before any lease sale decisions are made. 

The Program also includes a proposed sale in the Mid-Atlantic Planning Area, beyond 50 miles of the coastline of Virginia, in late 2011. This area was included in 

the Program at the request of the Commonwealth of Virginia. This proposed sale 

area excludes a 50-mile coastal buffer from leasing consideration as requested by 

the Commonwealth of Virginia, as well as a No-Obstruction Zone at the entrance 

to the Chesapeake Bay where no leasing would take place. A decision to hold a lease 

sale will not be made without additional consultation and more site-specific analysis 

of its environmental effects under the National Environmental Policy Act (NEPA). 

We at MMS know that there has been particular concern over the proposed sales 

in the Mid-Atlantic and North Aleutian Basin. The Mid-Atlantic area remains under 

Presidential withdrawal and Congressional moratorium; therefore no leasing can 

occur unless the congressional moratorium is discontinued and the presidential 

withdrawal is modified for this area. 

The situation is different in the North Aleutian Basin (NAB). Congress placed the 

NAB under congressional moratorium from FY 1990 through FY 2003, after which 

Congress no longer included a rider to prohibit development in NAB. In 1998, President Clinton withdrew the NAB and other areas from leasing consideration through 

2012. On January 9, 2007, the President modified the 1998 withdrawal in order to 

allow leasing in two areas previously closed—the 181 South Area in the Central 

Gulf of Mexico and the NAB. 

Modification of the withdrawal with regard to NAB was supported by the State 

of Alaska, the Alaska delegation, and the local communities closest to the proposed 

sale area, including the Aleutians East and Aleutians West Boroughs, Bristol Bay 

Native Corporation, and cities of Cold Bay, Sand Point, and False Pass. The MMS 

will prepare an environmental impact statement, with opportunity for public comment, and consult with the State of Alaska under the Coastal Zone Management 

Act before any decision is made to hold a lease sale in this area. The Secretary and 

MMS are committed to continuing the extensive consultation and cooperation with 

the State and local governments and tribal organizations which began during the 

preparation of the new 5-Year Program. The Proposed Final Program includes only 

one lease sale in this area in 2011, a change from the two sales originally proposed 

in the two earlier proposed schedules. The decision to change the proposed schedule 

from two sales to one sale was made in order to have time to develop the information that MMS considers necessary for an informed decision. 

The only sale held to date in the NAB was Sale 92 in 1988 which resulted in 23 

leases being issued. In 1995, all 23 leases were relinquished for compensation in a 

settlement of litigation. Therefore, there are no existing leases currently in the 

NAB. 

In anticipation of possible leasing in the NAB under the new Program for 2007-

2012, MMS began conducting environmental studies within the NAB Planning Area 

and is actively working with other federal, state, and local agencies to understand 

and address area concerns. The MMS takes very seriously the environmental protection expectations of stakeholders and the public and ensures compliance with laws 

such as the National Environmental Policy Act (NEPA), Outer Continental Shelf 

Lands Act (OCSLA), Coastal Zone Management Act (CZMA), Endangered Species 

Act (ESA), Marine Mammal Protection Act (MMPA), Magnuson Fishery Conservation and Management Act, Oil Pollution Act (OPA), Clean Air Act (CAA), and Clean 

Water Act (CWA). 

Before making a decision to proceed with the proposed NAB sale, MMS would 

complete an anticipated 2 1/2 to 3 year pre-sale and NEPA process, which would 

include preparation of an environmental impact statement based on the most current and best scientific information. The MMS will use new information obtained 

through its Environmental Studies Program and other available information acquired from other research programs and studies in that region. The MMS Environmental Studies Program has a long history of appropriately identifying and obtaining needed mission-relevant environmental research. This work is a key strength of 

MMS’s pre- and post-lease environmental assessment and monitoring efforts. 

The first major step to plan new environmental studies in the NAB area occurred 

with the MMS-sponsored NAB Information Status and Research Planning Meeting 

held in Anchorage November 28—December 1, 2006. The four-day meeting gathered 

input from stakeholders, scientists, and government administrators with particular 

18

knowledge and expertise on resource use in the area. Of the 111 meeting participants, MMS directly funded the travel expenses of 16 local stakeholder delegates 

to ensure strong representation from the local residents of each regional borough. 

Speakers and meeting participants emphasized the critical importance of resources in the NAB, including human subsistence resources, commercial fisheries, 

and internationally important bird and marine mammal populations and habitats. 

Study profiles for new research efforts were developed at the meeting, representing 

the information priorities identified by the working groups. As a start, beginning 

this year MMS and National Marine Mammal Laboratory of the National Oceanic 

and Atmospheric Administration (NOAA) are co-funding a $5 million, three and ahalf year study of the North Pacific right whale. Additional studies will be considered for fieldwork in 2008 and beyond. MMS will coordinate studies with other federal and state agencies and groups such as the North Pacific Research Board. 

As part of our NEPA scoping process, MMS will seek information from local communities and stakeholders early in the EIS process. As a commitment to Alaska 

Governor Palin, Secretary Kempthorne has directed MMS to work closely and cooperatively with the State of Alaska, the Aleutians East Borough (AEB), and others 

in the area during the planning process for the lease sale. This includes having the 

AEB participate in the preparation of the EIS, assessing mitigation needs, and developing stipulations to protect social and environmental concerns, especially the 

valuable fisheries and subsistence uses of the area. 

MMS will seek and consider the advice from expert agencies, such as NOAA’s National Marine Fisheries Service, the Fish and Wildlife Service (FWS), National Park 

Service (NPS), U.S. Coast Guard, U.S. Environmental Protection Agency, State of 

Alaska agencies, local government, and federally recognized tribes. Further, during 

the pre-sale process, MMS will conduct related consultation including consultation 

with NOAA and FWS under Section 7 of the Endangered Species Act, essential fish 

habitat consultation with NOAA under the Magnuson-Stevens Fishery Conservation 

and Management Act, consultation with NOAA under the Marine Mammal Protection Act, and Section 106 consultation with the State Historic Preservation Office 

as required by the National Historic Preservation Act of 1966. MMS will also conduct Government-to-Government consultation with potentially affected tribes.

Conclusion

The Department of the Interior and the MMS remain committed to doing their 

part to provide access to both traditional energy resources and alternative and renewable sources on Federal lands as a critical component of a balanced, comprehensive energy policy. For this reason, the Department has ensured that the OCS remains a solid contributor to the Nation’s energy needs. The relative contribution 

from Federal offshore areas will increase in the coming years due to increased access and increased activity in the deep waters of the Gulf of Mexico. 

Mr. Chairman, this concludes my statement. I appreciate the continued support 

and interest of this Committee in MMS’s programs. It would be my pleasure to answer any questions you or other members of the Committee may have at this time.


36476.001.eps
19

Mr. COSTA. Thank you very much. I suspect we have a number 

of questions. We will take this opportunity and begin. 

As I have been attempting to, from a layperson’s standpoint, become more familiar and knowledgeable about this process, I understand that a lot of the review that comes under the Minerals Management Service when you are publishing your inventory on U.S. 

oil and natural gas resources as it relates to the Outer Continental 

Shelf, that you compile data from various means. 


36476.002.eps 36476.003.eps
20

But one of those ways is by the collection of seismic data, is that 

not correct? 

Mr. CRUICKSHANK. We do not collect, we do not generate our own 

seismic data. We acquire seismic data. The company is——

Mr. COSTA. But you incorporate that. 

Mr. CRUICKSHANK. Yes. 

Mr. COSTA. That is the latest state-of-the-art, 3D technology that 

is allowed in determining the best information possible. 

Mr. CRUICKSHANK. In areas where that sort of seismic has been 

shot, we do acquire it, yes. 

Mr. COSTA. Yes. And so, I mean, I think it is important. Is there 

a problem that you—I mean, you use that resource that is available 

to you, but you are not able to generate it on your own. 

Mr. CRUICKSHANK. We don’t simply have the resources to go out 

and generate our own seismic data in areas. To do so for any given 

planning area would probably take $50 to $85 million, and several 

years of processing just to get a good picture of what is in a single 

planning area. 

Mr. COSTA. Well, you heard my opening statement, my concern 

about the lack of real information based upon new technologies to 

understand clearly what the resource is out there. 

Correct me if I am wrong. On your studies that you compiled for 

2006 along the Atlantic and Pacific, our Alaskan coasts, were any 

of the seismic studies conducted along those areas? 

Mr. CRUICKSHANK. We had, off the shore of the Atlantic we had 

seismic data that was shot back in the 1970s and early eighties, 

so we had some old data. We also acquired data from adjacent 

areas: offshore of the Canadian Atlantic, offshore of the Bahamas, 

where companies are active more recently. And we try and use that 

information to better our interpretation of the old data we have for 

U.S. waters. 

Mr. COSTA. And so how does that information go into the assessments for the moratorium areas? 

Mr. CRUICKSHANK. We simply look at that information and give 

our best guess on what it is telling us for the potential resource 

that may exist in that area, recognizing that until there is work 

done out there, that it is really not very good information. 

Mr. COSTA. Yes, that was the frustration that I indicated in my 

opening statement. 

So am I correct to understand, because you referenced 1970 or 

in that decade, that that is the last time we got first-hand data on 

what the resources are? I mean, we are basing the information on 

that? 

Mr. CRUICKSHANK. Yes, 1970s. And I believe beginning of the 

1980s was the last time there was seismic shock in the Atlantic, 

offshore of the U.S. 

Mr. COSTA. Yes. I think we have to figure out a way to do better. 

Let me ask you, you threw out a number there, $58 million I 

think. What would it take to provide a full seismic inventory for 

all the regions? And how much would it cost? Do you have an idea? 

Can you give us an approximation? 

Mr. CRUICKSHANK. Well, we have taken a look at that, and our 

general approach would be to try and update the general 2-D seisVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00024 Fmt 6633 Sfmt 6602 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
21

mic for an area, and then focus in on specific hot spots, if you will, 

for a 3-D seismic to get a better picture of what may exist. 

Mr. COSTA. And I think you would want to prioritize——

Mr. CRUICKSHANK. Absolutely. 

Mr. COSTA.—since obviously you couldn’t do it all at once. 

Mr. CRUICKSHANK. And our estimates are that it would take between $50 and $85 million to do a single area. 

Mr. COSTA. A single area? 

Mr. CRUICKSHANK. A single planning area, that is correct. And 

we have 26 planning areas, though obviously in the Gulf and portions of Alaska we have current information from industry activities. 

Mr. COSTA. OK. Let us move to some local efforts quickly, because my time—I cited the California experience, because with the 

strong opposition that exists there in California, some people believe there is no drilling. Of course, there are 44 platforms, and it 

is significant. 

But was I correct in terms of talking about the issue of any 

spills? Have they been de minimis? 

Mr. CRUICKSHANK. They have. As I noted in my oral statement, 

over the last 20 years there has been less than 1/1000 of 1 percent 

of the oil produced. 

Mr. COSTA. You were talking nationwide. 

Mr. CRUICKSHANK. I was talking nationwide. 

Mr. COSTA. Right. So in California, it is——

Mr. CRUICKSHANK. I don’t have the comparable number for California, but there has not been a major spill from OCS production 

since 1969. 

Mr. COSTA. My time has expired, but if I get another round I 

want to get—maybe some of my colleagues will cover it—but the 

issue of weather conditions comparable to, you know, the North 

Sea, as we look at challenges on U.S. coastal waters, and the issues 

on coexistence with fisheries and environmental issues. But I will 

now defer to the Ranking Member of the committee, the gentleman 

from New Mexico. 

Mr. PEARCE. I thank the Chairman, and would make the, just 

the opening statement that I am fascinated with the question on 

seismic, and would be more than willing to work in a bipartisan 

fashion to do whatever we can to update those studies. Because I 

think that access to reasonably recent and qualified data is extraordinarily important. 

And I know from my experience in the oil field that the seismic 

data has tremendously changed since the seventies. In the seventies, you were getting kind of a one-dimensional display of what 

might be down when you drill, and so you are just kind of drilling 

blind. Today it is 3-D, and you can almost place a pocket of oil so 

that sometimes you have to come around and come to that pocket. 

But you can just hit exactly what you are trying to do. And it has 

caused some of the greatest environmental improvement in the industry because of our tremendous knowledge. So we would work 

with you on that. 

The $50 to $85 million, Mr. Cruickshank, that you referred to, 

is that paid by the government, or is that paid by the companies? 

22

Mr. CRUICKSHANK. Well, that is what we think it would cost if 

we were asked to collect the data ourselves. 

Mr. PEARCE. If you were to collect it. 

Mr. CRUICKSHANK. Yes. 

Mr. PEARCE. Do you have any areas where you all collect data? 

Do you all typically do seismic, or do the oil companies do the seismic? 

Mr. CRUICKSHANK. We do not. The oil and natural gas companies 

do the seismic, and we acquire it. But obviously those companies 

aren’t acquiring seismic data in areas where they don’t have, where 

they don’t see a potential for leasing. 

Mr. PEARCE. And so in your estimation, that is a business-wise 

decision that you all would invest in the seismic in order to lease? 

Or what would it take? What has stopped, I guess the question is, 

what has stopped the oil companies from doing that? That there is 

no future to lease, that the moratorium exists? 

Mr. CRUICKSHANK. I believe that is the case. That if they don’t 

see a prospect for leasing in an area, they don’t view it as a wise 

investment of their money to go out and collect the data. 

Mr. PEARCE. No, I would understand that. But say, even in piecemeal, let us say that we decided, because Virginia has voted in 

their legislature, the local process that we referred to earlier said, 

you know, let us have that. And so if we declared the moratorium 

over for the Virginia coastline, then is it reasonable to assume that 

companies would come in and spend that money, and save the government the $50 to $85 million per leasing parcel? 

Mr. CRUICKSHANK. Yes, absolutely. 

Mr. PEARCE. That is a reasonable assumption. And there would 

be no difference in the data. In other words, you would use the 

same sources, seismic sources. 

Mr. CRUICKSHANK. It might even be the same companies, as we 

would contract that with folks if we were to——

Mr. PEARCE. So no difference on the data. Going into the safety, 

I have heard concerns from people in New Jersey that if we allowed production in Virginia, that we possibly risk the coastline of 

New Jersey. 

Can you tell me the greater risk from the tankers that go in and 

offload oil in the northern part of the U.S. along that coastline. Is 

there a great risk from that, or a greater from the production that 

occurs out in the gulf in an offshore region? 

Mr. CRUICKSHANK. We believe there is a greater risk from the 

tanker traffic. If leasing would occur offshore Virginia, currents 

there generally are southerly near shore, and offshore they tend to 

push farther out to sea. So we think the chances, if there were an 

incident offshore Virginia, anything getting up to New Jersey is 

pretty small. 

Beyond that, the National Academy of Sciences has looked at the 

sources of oil that gets into the ocean, and offshore production 

counts for about 2 percent of the oil that gets into the ocean in 

North America; marine transportation, about 3 percent. 

Mr. PEARCE. Where are the greatest percentages of oil that get 

into the ocean? 

Mr. CRUICKSHANK. The single largest source is natural seepage, 

and that is followed by municipal runoff. 

23

Mr. PEARCE. Do you know the size, the percent of the chance of 

natural seepage? In other words, 2 percent comes from production 

activities. 

Mr. CRUICKSHANK. For natural seepage, it is about 63 percent of 

all the oil going into the North American——

Mr. PEARCE. So we have a 63 percent chance that nature is going 

to spoil the beaches of New Jersey, and a 2 percent chance that 

man’s activities will. Is that correct? Is that a fair way to look at 

it? 

Mr. CRUICKSHANK. Well, these are numbers that are averaged 

over the nation. 

Mr. PEARCE. No, I understand. 

Mr. CRUICKSHANK. I don’t think there——

Mr. PEARCE. I am just trying to keep it in perspective and not 

to overplay it one way or another, just to understand what the 

facts are telling us. 

What about minerals leasing cooperation with defense agencies? 

Does offshore leasing present a problem for that? 

Mr. CRUICKSHANK. We have a longstanding memorandum of understanding with the Department of Defense, where we work cooperatively with them to plan activities in areas where there are Department of Defense activities. We have had a very successful relationship in the Gulf of Mexico that has allowed us to proceed with 

leasing in areas of importance through the Department of Defense. 

We are able to work out measures that allow both activities to 

occur jointly. 

We would expect, as does the Department of Defense, that if the 

moratorium were to be lifted in Virginia, that we would talk about 

similar accommodations in that area. But from our perspective, we 

would never allow any leasing activity to occur that would jeopardize national security. 

Mr. PEARCE. Mr. Chairman, I see my time has elapsed, but if you 

have a second round, I would ask then. Thank you. 

Mr. COSTA. Thank you. You actually had an opportunity to have 

a little more time. 

Our next member of the committee is the gentleman from Rhode 

Island, I should say, our colleague, Congressman Kennedy. 

Let me just note before he begins his questioning that obviously 

Congressman Moran has arrived. I have indicated for an orderly 

process that we will complete our questions of this witness with 

two rounds, and then following this witness we will insert Congressman Moran for his statement. 

So he has asked if he could have the courtesy of being here with 

us on the podium, and I said fine. 

So the gentleman from Rhode Island, Mr. Kennedy. 

Mr. KENNEDY. Thank you, Mr. Chairman. I want to follow up 

with the Ranking Member’s question with regard to working with 

the Department of Defense, because as I understand it, the Navy 

submitted comments to your agency regarding the five-year draft 

proposed program on April 10, 2006, saying that because they conduct significant activity in the Virginia Cape’s area operations, 

which overlaps the Virginia program area in the five-year plan, 

they oppose the oil and gas development activity in that region. 

24

And on November 27, 2006, they submitted comments for the 

proposed program saying that, ‘‘The special interest sale proposed 

for the mid-Atlantic region is not acceptable to the Department because of its incompatibility with the military training and testing 

conducted in this area.’’ As opposed to what you had just responded 

to Mr. Pearce in regards to. 

The Navy goes on to say that they are willing to discuss possible 

alternatives to provide opportunities for exploration of potential 

joint use of the mid-Atlantic area, but they say, ‘‘MMS acknowledged that the Navy opposes the mid-Atlantic sale, but makes no 

response.’’

So I am sure you are familiar with these objections. But why is 

it that they have given them no response, and gone ahead and 

opened this thing up without giving them that response? I mean, 

you do acknowledge in the Gulf of Mexico you draw a line for military missions, the line to accommodate Department of Defense, but 

you are not willing to do that in this case. Why is that? 

Mr. CRUICKSHANK. We did provide for the Department of 

Defense, we met with them on several occasions. As you noted, 

they have said they are willing to discuss alternatives that will 

provide for joint use of the mid-Atlantic area. And as they also note 

in the letter you were quoting from, the Department of Defense 

notes that they and we have worked closely together over the years 

to ensure a successful leasing program with manageable impacts 

on defense operations. 

We have a very strong, longstanding relationship with them in 

the Gulf of Mexico. We have set areas aside. In other areas we do 

leasing and activities where there are military operations, but we 

put special conditions on those leases as to what sorts of activities 

can occur, and when they can occur, and a sort of notification that 

has to be given to the Department of Defense to make sure that 

there is no unacceptable impact on defense operations. 

So if this area were to become available, one of the first things 

we would do is sit down with the Defense Department and work 

with them to see if there are reasonable accommodations that can 

be made. If not, that is certainly something that would weigh very 

heavily in any decisions as to whether or not to hold the lease sale. 

Mr. KENNEDY. Obviously, I think that should be detailed in the 

five-year plan. Those are big issues that are at stake here, and I 

would hope that that is or is not just left as kind of details in the 

weeds. These are enormous issues that I think need to be considered before we even think of moving forward. These are not issues 

that are subtext to our discussions after decisions are made here 

at our level. 

We need to have these questions brought up before us before we 

even consider these issues. They are not for bureaucrats to decide 

after we consider legislation like this. We need to be privy to these 

decisions well before, you know, you get to negotiate out, because 

we might, as a Congress, might not deem these appropriate compromises to national security. 

I mean, we are considering a lot of moving parts here with respect to training grounds with BRAC and the like. I know that because we are in the midst of sharing a lot of these testing grounds 

between my state of Rhode Island in undersea warfare, and this 

25

area that is in the potential testing zone off Virginia. There are 

enormous impacts here, and we can’t have this kind of decision 

being made in a vacuum here. And I just really can’t stress strongly enough that these decisions can’t be made ex post facto, whenever this bill that we are deciding on here is considered. 

So I would just bring that to the attention of the committee and 

say that I have great concerns about that. And then in another line 

of questioning, we will come back to the issues of oil spills and my 

concerns about those. 

Mr. COSTA. You may want to highlight them. I am trying to, because of the timing situation, keep this to one round. 

Mr. KENNEDY. OK. Well, I will submit those for the record, then. 

Mr. COSTA. All right. I know the gentleman from Rhode Island, 

as I do, shares a fondness for the sea and for sailing, and speaks 

with great conviction. So we will be looking forward to submitting 

those questions. I have some additional questions, as well, that I 

will submit. 

The gentleman from Texas, Mr. Gohmert, I believe is next. 

Mr. GOHMERT. Thank you, Mr. Chairman. And we sure do appreciate your time and your testimony and your expertise. 

I am curious. I have understood from Don Young that the closest 

groups to ANWR, local groups, do not have objection; that the 

groups that actually object to production, drilling production in 

ANWR, are those that are farther away. Do you know? 

Mr. CRUICKSHANK. I don’t know the answer to that off the top 

of my head. Minerals Management Service deals with the offshore 

resources, and ANWR is handled by another part of the Department. 

Mr. GOHMERT. OK. When you had testified about one third of our 

energy sources come from within your-all’s jurisdiction, I didn’t 

know if you were testifying just specifically Minerals Management 

Service, or the entire Department of Interior. 

Mr. CRUICKSHANK. The one third refers to the entire Department 

of Interior: on-shore, offshore, hydro-electric, all——

Mr. GOHMERT. But that is the extent of your expertise, is one 

third. And you can’t go more specific beyond that. 

Mr. CRUICKSHANK. I know bits and pieces, but I can’t answer the 

specific question you asked about ANWR. But we can get an answer for you. 

Mr. GOHMERT. OK. ANWR is not one of those bits or pieces, then. 

Mr. CRUICKSHANK. Not in terms of the location of communities, 

no. 

Mr. GOHMERT. All right. Well, to follow up on my colleague from 

Rhode Island’s questioning, obviously we don’t want to jeopardize 

national security, and obviously the Navy has some concerns, as 

well they should, if they have obstacles out in the sea that they 

would have to avoid that might pose problems. 

And I know that the Navy has submarines that are nuclear-powered, and perhaps aircraft carriers. I am not on Armed Forces, but 

I was under the impression that most of our ships use carbonbased fuel. 

Do you know what—I don’t know if this is one of your bits and 

pieces or not. But do you know what percentage of America’s carbon-based energy comes from foreign countries? 

26

Mr. CRUICKSHANK. Not carbon-based overall. About 65 percent of 

our oil comes from foreign countries, and about 15 percent of our 

natural gas. 

Mr. GOHMERT. Because I am curious. I am very concerned about 

problems for the Navy in training. I am also concerned about if we 

get into a war, is the Navy better off dodging a platform and not 

getting oil from the enemy we are fighting? Or are we better off 

getting our own oil, and not having to rely on the enemy to supply 

our Navy with fuel, so that our ships can go fight them? Just, the 

question arises. 

You had mentioned that of all the oil contaminating the coast, 

as I understand, 63 percent is from natural seepage, is that 

correct? 

Mr. CRUICKSHANK. That is correct. 

Mr. GOHMERT. And I need you to help me understand. When you 

say natural seepage, is that naturally occurring seepage? Or is that 

natural seepage from around production areas? Could you be more 

specific on that? 

Mr. CRUICKSHANK. Well, oil occurs, as you know, in sediments, 

many of which are under the sea. And its natural tendency is to 

rise toward the surface. And where there is some sort of cap rock 

or structure that blocks it, that is where you get the big pools of 

oil that you drill for and try and produce. 

Where there is no cap rock or structure, it just keeps rising up 

and bubbles to the surface, and seeps out. 

Mr. GOHMERT. Without any man intervening or causing that at 

all, correct? 

Mr. CRUICKSHANK. That is correct. 

Mr. GOHMERT. All right. Well, and as I understand, you are currently working with the military off the coast of my state, Texas, 

correct? 

Mr. CRUICKSHANK. We are. There are military operation areas off 

the coast of Texas. And prior to every lease sale we talk with them, 

and we design special stipulations on the leases to meet their concerns. 

Mr. GOHMERT. Going back just for one question, to the seepage. 

It is my understanding that production by the United States off our 

coast actually relieves some of the natural seepage, and allows us 

to take advantage of it and provide that to people like the Navy, 

so they don’t have to rely on 65 percent of their oil products coming 

from our enemies. Is that your understanding? 

Mr. CRUICKSHANK. That is correct. In areas where we produce, 

we are pulling the oil out of reservoirs and producing it, so it is 

not escaping and seeping to the surface in those cases. 

Mr. GOHMERT. I do have to express my appreciation for the 

Navy’s optimism that in a time of war, our enemies will provide us 

with 65 percent to keep our Navy afloat. But I appreciate that my 

time has expired. 

Mr. COSTA. I thank the gentleman from Texas. Our next witness 

in the order alternating time would be myself. But for the purpose 

of trying to allow both our colleague to have his testimony, I indicated that I was going to forgo that. 

I do want to suggest to Mr. Cruickshank that I will send you 

questions as it relates to the alternative leasing schemes that have 

27

been discussed in Louisiana and other places. Of course, we have 

our colleague here from Louisiana who may ask that question. 

I do want to talk to you about changings and planning area 

boundaries, and will submit that question, as well as administrative area boundaries, definition of large spills, the North Aleutian 

Basin proposal mitigation measures, and some of the issues that 

you folks have raised with regard to buffer zones and the inner engagement with National Marine Fishery Services. That will have to 

be received in written statements. 

The gentleman from Louisiana is here, and has not had an opportunity to have his five minutes. Mr. Jindal, it is good to have 

you here. 

Mr. JINDAL. Thank you, Mr. Chairman, for conducting this hearing. I want to thank our witness, as well. 

I have really got just two categories of questions. I will predicate 

it by reminding us, last year I introduced the Deep Ocean Energy 

Resources Act of 2006, a version of which—that bill actually passed 

the House—a version of which was enacted in the law. That bill 

recognized the important need to expand domestic offshore oil and 

natural gas production. It gave coastal states the power to opt out 

of restrictions on drilling if they wanted. And as a result, it was 

a strong step toward more affordable and stable energy supplies. 

It also, importantly for Louisiana, required revenue from offshore 

leases to be shared with the coastal states, so that we would have 

funding for vital needs, such as restoring our coasts, building protection from hurricanes, and other critical infrastructure needs. 

The compromise version of that bill ended a 57-year wait for my 

state to finally receive a share of revenues from the drilling off of 

our coast. Therefore, this hearing today is of particular interest to 

those of us from Louisiana. 

To the people of my state, the next five-year leasing program 

means more affordable energy, means more high-paying jobs, 

means significant revenues. And for the first time, it means we will 

have money from drilling in the Federal waters off our coast, which 

is critical to our future. 

My two sets of questions. First, the Gulf of Mexico Energy Security Act mandated that the states of Louisiana, Texas, Alabama, 

and Mississippi would share 37.5 percent of the revenue from all 

lease sales in the Eastern Gulf of Mexico area and the 181 South 

area regions, a combined 6.5 million acres. 

My first group of questions are, can you tell me when the lease 

sales for these particular areas are proposed? And an estimate of 

when the states will be able to receive their share of these revenues? 

Mr. CRUICKSHANK. Since these are areas that have not been 

available for quite some time, we are in the process of doing supplemental environmental impact statements and the other work 

necessary to hold the lease sales. We expect that the area in the 

Eastern Gulf of Mexico will be offered in March of 2008, and the 

181 South area will be offered in March of 2009. 

Mr. JINDAL. And do you have an estimate of when you expect 

production based on you-all’s previous experiences? 

Mr. CRUICKSHANK. Based on previous experience, depending on 

the nature of what they find in the Eastern Gulf, we could see proVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00031 Fmt 6633 Sfmt 6602 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
28

duction within three to five years. In the 181 South I expect it will 

take a little bit longer because of the greater distance from existing 

infrastructure. 

Mr. JINDAL. Now, the dates you just shared with the committee, 

are those the original dates? Or do those reflect a delay from youall’s original timelines? 

Mr. CRUICKSHANK. Those are our original timelines. But we do 

recognize, for the area in the Eastern Gulf, the Act asked us to 

hold the sale by December of 2007, but we simply didn’t have sufficient time to complete the necessary steps for NEPA and other 

compliance by that time. So we pushed it back to March. 

Mr. JINDAL. That brings me to my second question. The states 

such as Louisiana are counting on this revenue sharing for restoration, hurricane protection, and flood control projects. Therefore, it 

is critical to us that the sales proceed on a timely fashion, and also 

it is critical that there is accuracy when it comes to the amount of 

money collected from the companies and distributed to the states. 

Earlier this year there were questions as to whether your agency 

had the procedures in place and the staff required to do this both 

accurately and in a timely fashion. Can you give us assurances 

today that you have the resources you need to do this in a timely 

fashion, and in an accurate fashion? 

Mr. CRUICKSHANK. We believe we do. We are always open to suggestions from folks on how to improve our processes, but we think 

our processes are good and will continue to improve them to provide you that assurance. 

Mr. JINDAL. I will conclude, for the sake of time, with just a couple final thoughts. 

One, certainly we are concerned. We would have hoped that 

there wouldn’t have been a delay, but obviously this is very important to our state, I will certainly echo some of the comments made 

from my colleagues that the offshore Louisiana, Texas, and other 

coastal states have been happy to host this production to produce 

energy for the rest of the country. We simply are just looking for 

an opportunity to repair some of the damage from previous activities, especially when it comes to protecting our coasts. 

And I think my colleague is doing a good job of highlighting the 

need for us to have a domestic reliable source of energy. 

I thank the witness, and I thank the Chairman, as well. 

Mr. COSTA. I thank the gentleman from Louisiana. And because 

of today’s schedule, I believe it is important that we allow our colleagues an opportunity to testify. We will honor all the members 

of the Subcommittee’s desire to have the responses to written questions, both Congressman Kennedy and I and others have indicated. 

So we would hope that you would respond to our written questions 

in a timely fashion. 

Mr. CRUICKSHANK. I would be happy to. 

Mr. COSTA. And, Mr. Cruickshank, I suspect we will be having 

further interaction with you and the Minerals Management 

Service. And we hope that we can be more constructive in some of 

the criticisms that I echoed in figuring out how we might solve 

some of these issues, to get a more accurate view of the challenges 

you face, and our nation has faced, as we deal with this very important issue. 

29

Mr. CRUICKSHANK. Thank you, Mr. Chairman. I look forward to 

working with you. 

Mr. COSTA. And congratulations on your new appointment. 

Mr. CRUICKSHANK. Thank you. 

Mr. COSTA. All right. We are going to deviate a little bit from our 

agenda. Congressman Moran was to be scheduled with our earlier 

two Members, and unfortunately had a commitment that delayed 

him. So we are looking forward to hearing his comments and 

thoughts as it relates to this important issue. And we thank you 

for your patience. 

He represents, I think as many of us know, an important part 

of northern Virginia. Actually, he represents many Members of 

Congress and staffpeople who either live full time or list part time 

in his district. 

And it is good to have you here, Congressman Moran. 

STATEMENT OF JIM MORAN, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF VIRGINIA 

Mr. MORAN. Thank you very much, Mr. Chairman. I do appreciate the opportunity to testify today. And of course, I appreciate 

the overall objective of reducing our dependency on foreign, unstable sources of energy. I think we all support that objective. 

But I do not think that we will get there by lifting the moratorium on drilling off the Atlantic and Pacific coasts. Lifting the moratorium, however, will invite great harm to established fishing and 

tourism industries, as well as the environment. And off the coast 

of Virginia, as has already been mentioned, it will interfere with 

the U.S. Navy’s Virginia Cape operation area. 

The Chesapeake Bay and Virginia’s coastal communities generate billions of dollars in economic activity. Just one city, Virginia 

Beach, whose Mayor strongly opposes lifting the moratorium, hosts 

more than 3 million visitors each year, and generates more than 

$1.4 billion in economic activity. Fishermen haul more than 824 

million in saltwater catches annually. And in fact, most of the income from communities along the Chesapeake Bay and eastern 

shore are tied to their coast. 

Bristol Bay in Alaska is the ecological wonder that sustains a $2 

billion commercial fishing industry, and is home to the world’s largest wild sockeye salmon run, as well as a vital fishery for halibut, 

red king crab, and pollock. The Chukchi and Beaufort Seas on the 

North Slope are known as America’s polar bear seas, and they provide essential habitat for a fifth to a sixth of the world’s remaining 

wild polar bears. These communities and their economic livelihood 

are also at risk from oil and gas drilling. 

The suggestion is that the drilling off Virginia’s coast be for gas 

only. But the drilling procedure is the same, and involves massive 

amounts of waste mud that contains toxic metals, such as mercury, 

lead, and cadmium. Waste mud is thought to be the leading source 

of mercury poisoning in the Gulf Coast. Drilling operations also discharge hundreds of thousands of gallons of what is called produced 

water that contain a variety of toxic pollutants, including benzine, 

arsenic, lead, naphthalene, zinc, and toluene. They can also contain 

varying amounts of radioactive material. 

30

Just a few more environmental statistics, since my staff has 

come up with so many of them I hate not to use them. There are 

tons of air pollutants that are generated by these operations, as 

well. A typical exploration well generates some 50 tons of nitrogen 

oxide, 13 tons of carbon monoxide, six tons of sulphur dioxide, and 

five tons of carbon monoxide. In addition, drilling can trigger the 

uncontrolled release of methane hydrates, which is a greenhouse 

gas that is 20 times more potent than carbon dioxide. 

I have several pages of statistics. I am not going to report any 

more of them, or take any more time to share them with you, and 

I suspect the panel is aware of it. But there is good reason why 

people are very much concerned about opening new oil and gas 

areas. 

There were 73 incidents in the last 20 years that resulted in 

more than 3 million gallons of oil spilled from Outer Continental 

Shelf oil and gas operations. 

The main thing I want to emphasize is that we don’t think that 

more offshore drilling will solve our energy problems. In other 

words, it won’t accomplish the objective that we share. 

It has been estimated by the experts that the amount of natural 

gas and oil recoverable from the Outer Continental Shelf will not 

reduce our prices materially. For one thing, it takes too long to develop a natural gas field to affect prices in the short term, because 

it takes one to three years to develop a field. But there isn’t enough 

oil and gas in the areas that we are talking about to appreciably 

influence production and consumption. 

The Department of Energy said that the price difference if we 

were to drill in all of the areas under the moratorium would lower 

natural gas prices by about four cents per thousand cubic feet by 

the year 2020. A study found that exercising existing leases offshore, where drilling is already allowed, completing a gas pipeline 

from the North Slope in Alaska and siting more liquified natural 

gas terminals will do much more to increase supply and lower 

prices than anything that is recoverable from the currently restricted areas. 

The vast majority, 80 percent of the nation’s undiscovered but 

technically recoverable Outer Continental Shelf oil and natural gas 

is located in areas that are already open to drilling. According to 

the Interior Department, there are 479 trillion cubic feet of reserves that are already available, and we are only talking about 86 

trillion that are considered within this moratoria area. 

I need to conclude this. But the point is that we are talking 

about 19 billion barrels of oil, compared to 101 billion barrels of oil 

already available. And, as I say, it is 86 versus 479 trillion cubic 

feet, in terms of what we would be making available versus what 

is already available, if we choose to drill for it. 

Let me conclude with the other thing that is particularly specific 

to the Virginia beach, and I think rather compelling. 

Mr. COSTA. Please. 

Mr. MORAN. The fact that the Navy has said unequivocally that 

they cannot support the proposed lease sale areas within the midAtlantic planning area off the coast of Virginia. There are very sensitive operations, very essential operations that take place here. 

And so they did write that letter that I think made it very clear 

31

they would oppose this, and that is one more reason I would oppose 

it as well. 

Thank you. 

[The prepared statement of Mr. Moran follows:]

Statement of The Honorable James P. Moran, a Representative in Congress 

from the State of Virginia 

Good morning and thank you for the opportunity to testify at today’s hearing on 

the Minerals Management Service’s Five Year Program for Oil and Gas Leasing on 

the Outer Continental Shelf. 

I appreciate and support the overall objective of reducing our dependency on foreign unstable sources of energy. We will not get there by lifting the moratorium on 

drilling off the Atlantic and Pacific coasts. 

Lifting the moratorium, however, invite great harm to established fishing and 

tourist industries and the environment. And, off the coast of Virginia, it will interfere with the U.S. Navy’s Virginia Capes Operations Area. 

The Chesapeake Bay and Virginia’s coastal communities generate billions of dollars in economic activity. Just one city, Virginia Beach, hosts more than 3 million 

visitors each year and generates more than $1.4 billion in economic activity. Fishermen haul more than $824 million in saltwater catches annually. 

And, upwards of half of the income of communities along the Chesapeake Bay and 

Eastern Shore are tied to their coasts. 

Bristol Bay is the ecological wonder that sustains a $2 billion commercial fishing 

industry and is home to the world’s largest wild sockeye salmon run as well as a 

vital fishery for halibut, red king crab, and Pollock. 

The Chukchi and Beaufort Seas are known as America’s ‘‘Polar Bear Seas,’’ and 

provide essential habitat for one-fifth to one-sixth of the world’s remaining wild 

polar bears. These communities and their economic livelihood are at risk from oil 

and gas drilling. 

Environmental Harm 

It doesn’t matter if its oil or gas, the drilling procedure is the same and involves 

massive amounts of waste mud that contains toxic metals, such as mercury, lead 

and cadmium. Waste mud is thought to be the leading source of mercury poisoning 

in the Gulf coast. 

Drilling operations also discharge hundreds of thousands of gallons of ‘‘produced 

water’’ that contain a variety of toxic pollutants including benzene, arsenic, lead 

naphthalene, zinc and toluene. They can also contain varying amounts of radioactive 

material. 

Tons of air pollutants are also generated by these operations. A typical exploration well generates some 50 tons of nitrogen oxides, 13 tons of carbon monoxide, 

6 tons of sulfur dioxide and 5 tons of carbon monoxide. In addition, drilling can trigger the uncontrolled release of methane hydrates, a greenhouse gas that is 20 times 

more potent than carbon dioxide. 

More harm is caused by the infrastructure needed to support a drilling operation. 

Miles of pipeline and onshore processing and refinery plants are responsible for destroying hundreds of miles of wetlands and sensitive coastal habitat along the Gulf 

coast. And, I have not even mentioned the potential harm caused by oil spills. 

According to the Interior Department between 1980 and 1999 there were 73 incidents that resulted in more than 3 million gallons of oil spilled from OCS oil and 

gas operations. Minor spills occur all the time, a major spill would be a catastrophe 

that would permanently injure productive fisheries and wreak havoc on the tourist 

industry. 

More Offshore Drilling Won’t Solve our Energy Problems 

The natural gas and oil estimated to be recoverable from the Outer Continental 

Shelf will not solve our high natural oil and gas prices. It simply takes too long to 

develop a natural gas field to affect prices in the short term (1-3 years). 

Natural gas from areas currently off limits to drilling will not reduce prices in 

the long term either, since there is not enough gas there compared to either annual 

U.S. production or consumption. 

A 2001 Energy Information Agency study: U.S. Natural Gas Markets: Mid-Term 

Prospects for Natural Gas Supply (SR/OIAF/2001-06) compared the price of natural 

gas with the OCS moratoria areas kept out of production and the price of natural 

gas if all the moratoria areas were opened for drilling in the 2007-2012 MMS 5 Year 

Plan. In this study DOE’s National Energy Modeling System (NEMS) predicted that 

32

the price difference for drilling in all moratoria areas would lower natural gas prices 

by about 4 cents per thousand cubic feet in 2020. 

The study found that exercising existing leases offshore where drilling is allowed, 

completing a gas pipeline from the North Slope in Alaska and siting more Liquefied 

Natural Gas (LNG) terminals will do more to increase supply and lower prices than 

anything recovered from currently restricted areas. 

The vast majority (80 percent) of the nation’s undiscovered but technically recoverable OCS oil and natural gas is located in areas that are already open to drilling. 

According to the Interior Department’s 2006 Report to Congress: Comprehensive Inventory of U.S. OCS Oil and Natural Gas Resources, there are an estimated 86 trillion cubic feet (TCF) of undiscovered technically recoverable natural gas resources 

in all OCS areas withdrawn from leasing compared to 479 TCF of reserves, reserve 

appreciation and undiscovered technically recoverable resources within the total 

OCS belonging to the U.S. 

For oil, there are an estimated 19 billion barrels of undiscovered technically recoverable oil in all OCS areas withdrawn from leasing compared to 101 billion barrels 

of oil reserves, reserve appreciation and undiscovered technically recoverable resources within the total OCS belonging to the U.S. In other words, the potential gas 

and oil now off limits constitutes about 20 percent of all recoverable oil and gas 

thought to exist in the OCS. 

The question has to be asked, why are we opening up new areas when trillions 

of cubic feet of natural gas and billions of barrels of oil can be found in proven reserves that are available but have not yet been brought into production? 

There are cheaper, cleaner alternatives 

Over the past 33 years there have been at least five large energy price shocks. 

Each shock has triggered a policy debate on measures to mitigate the economic effects of future shocks and reduce our dependency on foreign sources. 

Unfortunately, time and other priorities have eroded past commitments and resolves. In terms of investment, this nation has gone backwards, investing only 20 

percent of what we did in total energy and conservation research during the early 

1980s. Boosting domestic production of fossil fuels is not the way to go. 

We are 5 percent of the world’s population and consume close to 25 percent of the 

world’s energy. We are also long past peak production of our fossil fuel resources. 

The only realistic way to close the gap between domestic production and consumption is through the aggressive pursuit of conservation, alternative technologies and 

cleaner renewable fuels. 

Improving energy efficiency is the key to minimizing the impact of energy shocks 

on the overall economy. 

The federal government can play a critical role by setting standards that reduce 

consumption and supporting research that yields greater energy efficiencies and 

cleaner alternative sources of energy. 

Unfortunately, opening up our last reserves and revisiting past energy production 

policies will fail to improve our situation and are self-defeating over the long term. 

National Security Concerns 

Finally, let me stress a concern that the U.S. Navy has raised with the Interior 

Department’s draft Oil and Gas leasing program off the coast of Virginia. The Navy 

has, ‘‘consideration concern, however, with the proposed lease sale areas within the 

Mid-Atlantic Planning Area of the cost of Virginia.’’

To quote further, ‘‘the proposed area lies within the Virginia Capes (VACAPES) 

Operation Areas where the Navy’s training and test and evaluation community conducts significant activity.’’

Bottom line, this proposal invites significant economic and environmental injury 

to our coastal regions, and in Virginia’s case compromises Naval operations but 

yields less potential natural gas than is now available but not yet in production. 

I urge my colleagues to support legislation to maintain the moratorium and continue to protect our coastal waters. 

Thank you. 

Mr. COSTA. Well, thank you very much, the gentleman from 

northern Virginia. And we appreciate your patience. And we will 

move on now with our final panel of witnesses, and see you on the 

Floor. 

Mr. MORAN. Good. Thank you, Mr. Chairman. 

33

Mr. COSTA. Our next panel is one current and one former legislator, also from Virginia. This must be a Virginia morning. The 

Honorable Frank Wagner, a Virginia State Senator, representing I 

guess, among other areas, Virginia Beach. The Honorable Albert 

Pollard, former Member of the Virginia House of Delegates. Having 

been a former state legislator, I am always pleased to see members 

from state legislatures come to Washington, and to testify. 

In addition to that, we have a Mr. Bob Juettner, who is a Borough Administrator for the Aleutians East Borough of Alaska. And 

Mr. Whit Sheard, the Alaskan Program Director for the Pacific Environment. 

So do we have all of our witnesses here? Good. Why don’t we 

begin with State Senator Frank Wagner, representing, I guess in 

parts, Virginia Beach. And I look forward to your testimony. 

As I have suggested to the other witnesses, we like to keep within the five-minute rule. That is why those lights are there in front 

of you. Green begins, and then when the yellow light comes on, you 

have about a minute to wind up. 

So we look forward to your testimony, Mr. Frank Wagner. 

STATEMENT OF THE HON. FRANK WAGNER,

STATE SENATOR, STATE OF VIRGINIA 

Mr. WAGNER. Thank you, Mr. Chairman, and Congressman 

Pearce, and members of the committee. I appreciate this opportunity to testify in front of you today. 

First of all, I want to thank or congratulate the U.S. Department 

of Interior MMS for the inclusion of Virginia into the initial fiveyear plan; and after two years of fairly exhaustive public hearings 

and comments from citizens of Virginia, as well as all over the nation, the overwhelming positive response that they have received in 

support of maintaining Virginia into the five-year plan, and ultimately the decision that is before you today, that keeps Virginia 

within the current five-year plan under the MMS program. 

We in Virginia truly appreciate that as a result of the actions of 

the General Assembly over 2005/2006, and indeed in the Senate of 

Virginia into 2007, the indication that we would like the opportunity to find out what is off the coast of Virginia, and perhaps enhance Virginia’s position in there. 

And I can tell you, Mr. Chairman, this is the result of an exhaustive study of a program that I chaired: a committee that studied 

the needs of manufacturers in Virginia was the ultimate genesis of 

this particular program. And we had lost 70,000 jobs in Virginia, 

manufacturing jobs, over the last 10 years or so, and became very, 

very concerned, because we think that is an important and instrumental part of Virginia’s overall economy. 

And so we started to look at things we can do in Virginia. And 

we very much pride the fact in Virginia that Forbes Magazine has 

re-ranked us again the number-one state in the Nation to do business in. We recently received the number-one ranking to locate a 

business in; and from another organization, the number-one state 

in the Nation to raise a family in. And so we think we are doing 

some things right in Virginia. But we are concerned. We recognize 

there are 49 other states that would love to be where Virginia is 

ranked by these magazines, and we understand that if we are 

34

going to maintain its competitive posture that we think it is a great 

state, we are going to need to continue to do everything that we 

can within the confines of Virginia to do that. 

Certainly one of the areas that we looked at in the genesis of the 

original bill that asked that we lift the moratorium or let Virginia 

go offshore was the needs of manufacturers. Natural gas, supply of 

natural gas, is absolutely instrumental to many of the manufacturing businesses in Virginia today. We became very concerned 

about the skyrocketing cost. We saw basically a constant supply. As 

other sources were discovered, new sources were diminishing. 

But we saw a huge increase in demand, primarily from the electric generation capability that has resulted in driving the cost up 

of natural gas, not just in Virginia, but indeed all over the nation, 

and its necessary fallout. 

One of the largest users of natural gas, Mr. Chairman, is the 

Honeywell plant down in Hopewell, Virginia. They use, I believe 

they are one of the largest users east of the Mississippi, 50 million 

cubic feet a day. Their primary product out of that plant is fertilizer, so we came to understand the tie-in between natural gas 

and agricultural commodities. And we are very, very much concerned with the skyrocketing costs there. 

So we went ahead and proceeded, and went forward with this 

bill. It ultimately showed up on the Governor’s desk. He took that 

opportunity to veto it, because he additionally wanted to study that 

issue. And that study was released early in 2006. 

As a result of that, we in Virginia went back and said really, the 

offshore component is a very, very important piece of the puzzle, 

but not the total solution to the energy problems that we look forward to in Virginia. And so we moved forward with a comprehensive energy plan during the 2006 session of the General Assembly 

that was ultimately enacted into legislation. That encompasses a 

broad variety of things. But it generates on the premise that, in the 

best interest of Virginia, that Virginians produce energy for 

Virginian industry and Virginian homeowners to the maximum extent possible. 

We believe that is probably a good policy for this country to follow, and the whole premise of the plan was built on that. And it 

encompassed both conservation, as well as supply. 

But as we went forward and looked at it, Hurricane Katrina happened, and all of a sudden we found ourselves in a position where 

natural gas was just not available at any price in the Commonwealth, or certainly at the prices it was available made it such a 

cost that the various manufacturing facilities either had to shut 

down or severely curtain their operations until we got through this. 

And so we came to understand the lack of redundancy in our natural gas supply system in Virginia, and we also felt that that offshore component would provide a key additional source of natural 

gas that is so vital to our economy. And actually, not coming from 

the Gulf of Mexico, but again, generating off the shores of Virginia. 

We felt that was very, very important to move forward with. 

I also want to echo some of the comments you heard from Congresswoman Drake. As we move forward, as you move forward, I 

would ask you to look at one component of that, which is the concave drawing of MMS that really severely has restricted those 

35

lands available to Virginia. And the second part of that is to genuinely look forward to the revenue-sharing aspect of many of the 

bills that were passed here recently. We think that is an important 

component as you move forward to consider additional lands for 

Outer Continental Shelf leasing, that you move forward also with 

this plan. 

And with that, Mr. Chairman, I realize I probably went off 

script. Those comments are in the record, but I would be delighted 

to answer any questions you may have. 

[The prepared statement of Mr. Wagner follows:]

Statement of The Honorable Frank W. Wagner,

Senator, Senate of Virginia 

Thank you, Chairman Costa, Congressman Pearce, for inviting me to testify before you today regarding the Mineral Management Service’s Five Year Program for 

Oil and Gas Leasing for the Years 2007-2012, specifically the decision to include 

Virginia as a possible site for offshore exploration and recovery of natural resources. 

Since Virginia remains a possible offshore site in the program, two key points of interest to the Commonwealth are a correction to the mapping of Virginia’s offshore 

boundaries and the development of a revenue-sharing plan as the program is implemented. 

In my vision, the recovery of offshore natural resources is just one component of 

a broad-based energy plan that emphasizes conservation measures as we increase 

energy supplies to meet demand. The best energy policy for the nation is, to the 

maximum extent possible, Americans producing energy from American resources for 

use by American industries and in American homes. While I had hoped Congress 

would put forth this policy that has not yet happened. Thus, we in Virginia took 

it upon ourselves, through the newly created Virginia Energy Plan, to ensure that 

Virginians will produce our energy from Virginia resources for use by Virginia’s industries and citizens. Virginia’s approach is two-fold. We will take the lead in conservation efforts and in developing clean, cutting-edge energy sources for Virginia’s 

future energy needs. 

To that end, Virginia has adopted Renewable Portfolio Standards and we will continue to move aggressively in our conservation efforts, which include constructing 

green buildings and mandating that a percentage of energy used by state government come from renewable resources. Unfortunately, many of the very same environmental groups that demand the development of non-fossil fuel energy sources 

use every opportunity to block renewable energy projects in Virginia. 

In my position as an elected official in Virginia, I pledge to do all in my power 

to position the state as the nation’s leader in energy development, given the access 

and supply of natural resources available in the Commonwealth. Our offshore resources are a key component in Virginia’s energy future. A reliable and affordable 

source of clean-burning, environmentally friendly natural gas will assist in the near 

term as we develop alternative energy sources for future use. 

Hurricane Katrina illustrated—in stark relief—the extreme vulnerability of Virginia’s energy supply, because we have only one natural gas pipeline supplying the 

entire economic structure in the Commonwealth. We as policy makers now know 

that the supply of natural gas, which is absolutely essential to the economy, is so 

fragile that it can be totally compromised by an act of nature or perhaps by an act 

of terrorism. To leave our citizens in such an exposed posture is inexcusable. As long 

as I am fortunate enough to serve the Commonwealth, I will work to ensure that 

our citizens are not at risk of losing their jobs or the well-being of their families 

because we are unable to guarantee an available energy supply. 

Mr. Chairman, as you may know, the largest single consumer of natural gas east 

of the Mississippi River is located in Hopewell, Virginia. Honeywell produces the 

necessary ingredients for fertilizer and many plastics—the basics for agriculture and 

manufacturing. I have spent the last two years touring manufacturing plants in Virginia. We have hard-working, union employees who are producing paper, wood products, trucks, pharmaceuticals, fertilizer, and plastics—products essential to a vibrant economy in Virginia. One common link in all of these plants is the need for 

reliable and affordable natural gas, which powers industry but also serves as a key 

component in many of the manufacturing processes. 

Mr. Chairman, I have fought, and will continue to fight, to put infrastructure in 

place for Virginia to tie in to the liquid natural gas terminal in Cove Point Maryland. I have fought, and will continue to fight, to add an additional LNG terminal 

36

in Virginia. I have fought, and will continue to fight, to open up the waters off Virginia’s coast for exploration and recovery of natural gas. All of these efforts are to 

ensure reliable, affordable energy resources, which in turn support business and industry in Virginia so that any Virginian who wants a job will be able to work and 

contribute to our nation’s economy. 

I applaud the Department of the Interior’s Minerals Management Service for listening to Virginia over the last three years, during which the Virginia General Assembly, in a bipartisan effort, overwhelmingly supported legislation to open our 

coast. Keeping Virginia in the five year program is consistent with the desire of the 

Virginia General Assembly and over 70% of the people in Tidewater, Virginia, who 

have voiced firm support for offshore exploration and drilling off Virginia’s coast in 

polls conducted by several elected officials. 75% of Americans, in polling done by 

MMS during the development of the five-year program, also supported offshore efforts. 

Mr. Chairman, I hope Congress will respect the will of the General Assembly and 

the people of Virginia and allow Virginia to continue in the Department of the Interior’s Minerals Management Service’s 2007-2012 program. 

In closing, Mr. Chairman, I believe of all the problems facing our nation, energy 

represents the biggest challenges, potential crises and threats to our economy, foreign policy and national security. But, Mr. Chairman, energy also represents the 

greatest opportunities to put Americans to work and reinvigorate the economy. 

Unlocking untapped resources, expanding proven technology and empowering the 

brain trust in our research facilities will move us to the next generation of energy 

resources. There must be a paradigm shift in the way our nation operates. Congress 

can, and must, seize this opportunity to move the nation forward to true energy 

independence. 

Mr. Chairman, Mr. Pearce and members of the subcommittee, thank you for allowing me to speak today on behalf of the citizens of the Commonwealth of Virginia. 

Response to questions from Chairman Costa submitted for the record by 

The Honorable Frank W. Wagner, Senator, 7th District, Senate of Virginia 

Why does Virginia object to the administrative boundaries drawn in the 

ocean by MMS? 

As related to me, the Department of Interior MMS used a computer program to 

define the states’ boundaries beyond the existing three-mile limit currently established by law. This computer program looks at the curvature of the coastlines. When 

data on the coastline curvature is plugged into the program, those states that have 

coastlines pushing out into the ocean (convex mold) continue with boundaries at angles sometimes 20-30 degrees north and south of a true east-west boundary. Conversely, those states with a depression-type coastline (concave mold) have diminished angles. Virginia is one of the states with a concave coastline. Consequently, 

Virginia’s area of potential resources does not even come close to the outer limits 

of the continental shelf. (See attached diagrams). 

Interestingly, these resources include not just potential revenue sharing for any 

possible oil/natural gas deposits, but offshore renewables, aquaculture, minerals and 

other natural resources. 

The existing three-mile Virginian ocean waters extends directly due east of our 

coast on both our northern and southern borders. These waters and their ocean bottoms are part of Virginia. Beyond three miles, both Maryland and North Carolina 

have those rights extended by the federal government to start at our northern and 

southern borders all the way to the outer continental shelf. We have effectively lost 

thousands of square miles of resource rights in waters directly off Virginia’s coast 

(as close as three miles) to our neighboring states. 

This is clearly objectionable to Virginia. 

Specifically, how would Virginia be affected by these boundaries? 

1. Virginia’s universities have been developing plans to produce a wind farm off 

the coast of Virginia (in a Class 6 Wind Zone) that could potentially produce 

20% of all power used in Virginia. Under the existing administrative boundaries, much of this wind farm would be in North Carolina waters. New regulations (including revenue sharing) are currently being drafted at MMS for royalties from these properties and North Carolina would be a major beneficiary of 

Virginia’s efforts. 

2. If existing moratoria are lifted for development of offshore under seabed fossil 

resources (i.e. oil and natural gas) and if revenue sharing with states was part 

of the program (as is the case in the most recent Congressional action), then 

37

Virginia stands to lose tens of millions of dollars in potential revenue, even 

though onshore receiving and processing plants would, in all likelihood, be located in Virginia. 

3. Huge strides are being made in harnessing potential energy from offshore 

waves and currents. Once again, Virginians would find themselves in North 

Carolina or Maryland waters, even though they are directly off Virginia’s coast. 

4. These boundaries also affect all other natural resources including aquaculture, 

sand, methane hydrates, fish and crustaceans. To exclude Virginia’s input into 

activities as close as three miles of our coast is reprehensible. 

Does Virginia have a position on how these lines should be drawn? 

Most definitely. I can only speak as a senator from Virginia Beach as to Virginia’s 

position, however I have asked both Governor Kaine and Attorney General McDonnell to provide you with the official Virginia position. 

I believe these lines should extend due east, directly to the edge of the Continental Shelf. Virginia does not seek control over waters directly off the coast of 

Maryland or North Carolina, nor do we want these states to have control over the 

waters directly off our coast. In fact, the U.S. House of Representatives passed legislation last year that, among other issues, corrected these boundaries in the manner 

described above. Unfortunately, the Senate did not act on this legislation. 

There is ample precedent for Virginia’s position. The existing coastal waters (out 

to three nautical miles) extend directly east of Virginia’s borders with our neighboring states. The Founding Fathers drew direct east-west borders between Virginia 

and North Carolina and the Virginia-Maryland Eastern Shore. Extending these 

lines out to the edge of the continental shelf is the only fair and logical method to 

follow. 

The Department of the Interior has stated that the department is bound by their 

administrative procedures and Congress must direct any change to these 

boundaries. 

It is my sincere hope that, regardless of how you act on other issues relating to 

the outer continental shelf, Congress acts decisively to correct the current administrative boundaries. 

Chairman Costa, thank you for allowing me to provide additional information to 

the subcommittee. 


36476.009.eps
38

Mr. COSTA. Thank you very much, State Senator Frank Wagner. 

And when we get to the question round, I will have an opportunity 

to ask those questions. And we certainly will take your written 

statement and submit it for the record. 

The next witness is a former member of the Virginia House of 

Delegates, Mr. Albert Pollard. 

STATEMENT OF THE HON. ALBERT POLLARD, FORMER 

MEMBER, VIRGINIA HOUSE OF DELEGATES, MOLLUSK, 

VIRGINIA 

Mr. POLLARD. Thank you so much, Mr. Chairman. It is good to 

be here. 


36476.010.eps
39

Mr. Chairman and honorable members of the committee, I appreciate the opportunity to speak on this important subject, to the removal of the ban on leases for oil and gas drilling off the Virginia 

coast. 

As was said, my name is Albert Pollard. For six years I was a 

Virginia legislator from the Chesapeake Bay area. The voters treated me very well. I went out on my own accord. 

I am also a former Chairman of the Board——

Mr. COSTA. That is preferable. 

Mr. POLLARD. Yes, sir, always is. Never get carried out feet first. 

Chairman of the Board of a small industrial company with a 

heavy reliance on gas-fired industrial ovens. As a Virginian, I am 

going to refrain, keep my remarks to the Virginia portion of the 

plan. 

As a reasonable person, I can’t sit here and tell you that opening 

up the Virginia coast for exploratory drilling immediately leads to 

an Exxon-Valdez-type disaster. However, it is clear to me that this 

proposal is misguided. 

This is because opening up the OCS to exploratory drilling will 

do almost nothing to resolve the energy crisis in this country, but 

could create significant environmental crises along the Virginia 

coast. 

According to the EIS, it will likely take two five-year leases before any leaseholder has a prospect of extraction. By that time, 

after the year 2020, the DOE predicts that the price of natural gas 

will level off anyway. Indeed, the DOE recently predicted that the 

price of natural gas will be $3.26 per thousand cubic feet in 2020 

with the moratorium, and just four cents less with the moratoria 

areas opened. To the extent this is price related, it could easily be 

drowned out by activity in the Middle East, or even a good hurricane. 

Now, I have been in the manufacturing sector, and I realize we 

must find new solutions to rising energy costs before 2020, when 

new energy might, just might, come on line. I was in the glass imprinting business, where we used gas-fired ovens. But pretty soon, 

in that whole industry segment, we might not even have those, because of inks which are going to be cured by ultraviolet lights. 

Another industry which has just been getting hammered with 

high gas prices recently is the wood-drying, wood products industry, which is—and there is a locally owned wood products company 

which is having great pressure from rising energy costs. So they 

just brought on line two state-of-the-art wood-chip-fired kilns which 

are now saving 1.2 million gallons of propane and 22,000 gallons 

of diesel fuel a year. 

And most impressively, they didn’t wait for any governmental action solutions; they brought these on line in a little over a year, 

and now have a new renewable fuel, which is cutting edge, carbonneutral, and environmentally friendly. In business, a dollar saved 

is a dollar earned; and the same is true with conservation. Energy 

saved is as good as, better really, than energy tapped. 

So compare these very safe alternatives, which have certainty, to 

the opening of drilling off the Virginia coast, which contains much 

uncertainty. 

40

Now, there is a general perception that the energy policy passed 

by the Virginia General Assembly encourages offshore exploration 

of gas. In fact, in Virginia’s energy policy, there is actually ambiguity. Indeed, Section 67.102 of the Virginia Code specifically 

states that the policy shall ‘‘ensure that energy generation and delivery systems be located so as to minimize impacts on pristine natural areas.’’

Now, it is also true that Virginia’s energy plan, also adopted in 

2006, does call for limited exploratory natural gas drilling; but the 

plan is incompatible with the stated goals of the policy of protecting pristine areas. And the Virginia coast is a pristine area. It 

is remarkably pristine. Outside of Senator Wagner’s wonderful 

area of Virginia Beach, with its billions of tourism dollars, the 

Virginia coast, particularly the eastern shore, represents the largest, most intact coastal wilderness on the U.S. East Coast. 

My wife’s people are from over there, and there are over 75 miles 

of undeveloped coastline. And every one of the Barrier Islands is 

under conservation ownership, with over 60,000 acres in conservation ownership. 

The area supports the largest hard-clam aquaculture industry on 

the Atlantic coast, and, as was aforementioned by Congressman 

Moran, Virginia’s tourism industry is huge. 

Having drilling, exploratory or otherwise, within one day’s tide 

flow, the area is clearly in contrast with the Virginia energy policy—not the plan, but the policy—which was adopted at the same 

time. Spills, substantial mud plumes, underwater seismic activity, 

and drilling all contribute to the uncertainty of the area, and have 

been well documented in the past. 

Indeed, the EIS, associated with the five-year plan, assumes an 

eventual 1500-barrel—that is 75,000 gallons—spill from tanker or 

barge activity. 

So in conclusion, it is my view that the section of the Minerals 

Management Service’s five-year plan that would open up coastal 

Virginia exploration, coastal exploration, is misguided, and I hope 

that the Subcommittee agrees. 

Thank you so much, Mr. Chairman. 

[The prepared statement of Mr. Pollard follows:]

Statement of The Honorable Albert C. Pollard, Jr.,

Former Member, Virginia House of Delegates, Mollusk, Virginia 

Mr. Chairman and Honorable Members of the Committee: 

Thank you for the opportunity to speak on the important subject of the removal 

of the ban on leases for oil and gas drilling on the Outer Continental Shelf (OCS) 

off of the Virginia Coast. 

My name is Albert Pollard and I am speaking to you with several different hats. 

I have been a former Virginia legislator, and was also, until recently, Chairman of 

the Board of a small glass imprinting business with heavy reliance on gas fired industrial ovens. 

As a formerly elected official, I subscribed to the common law theory of ‘‘The Public Trust Doctrine’’. The Public Trust Doctrine holds forth the idea that Natural Resources of this country are held in trust by the government for the use, maintenance 

and enjoyment of all the public. In this theory, you, the elected officials are 

trustees—just as one is a trustee in a fiduciary sense—of the Natural Resources. 

As trustees, your job is to balance the competing interests and to do what is right 

for those natural resources. 

Now, I am a reasonable person and I realize that these are complex issues. As 

a reasonable person, I can’t sit here and tell you that opening of the OCS for explorVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00044 Fmt 6633 Sfmt 6621 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
41

atory drilling leads to an immediate danger to the Virginia coast, and that an Exxon 

Valdez type scenario is as sure as the fact that the sun will rise in the morning. 

However, after having made an extensive study of the evidence, it is clear to me 

that this proposal to open up Virginia’s coast to oil and gas exploration is misguided. 

In short, opening up the OCS off the Virginia coast for exploratory drilling will do 

almost nothing to resolve the energy crisis in this country but could create a significant environmental crisis along the Virginia coast. 

And, let’s face, this proposal is not only about exploratory drilling for gas as Virginia Governor Kaine recently wrote in a February 2007 letter to MMS. Lifting this 

moratorium is about production scale drilling for oil and gas off the Virginia Coast. 

The reality is that there is no practical difference between oil and gas exploration, 

nor is there any significant likelihood that if oil is found, it will not be exploited. 

The reality also is that this proposal won’t do anything at all to solve our nearterm energy crisis because, based on the Environmental Impact Statement it is likely that, two five year leases will be required just for exploration before the leaseholder has any prospect of extraction. Thus, more than likely, Virginians are looking 

beyond the year 2020 before any possible benefit from this action could take place 

in terms of more product flow. 

In other words, price relief from this drilling, if any, would come at a time when 

natural gas prices are expected to level off anyway. As was stated recently by the 

USG Energy Information Administration 

‘‘Total U.S. natural gas consumption is forecasted to increase from 22.2 trillion 

cubic feet in 2005 to 26.1 trillion cubic feet in 2030. Most of the increase is seen 

before 2020, when total U.S. natural gas consumption reaches 26.3 trillion cubic 

feet.’’

With all of its supply and demand information, DOE’s National Energy Model 

Modeling System (NEMS) predicted that the price of natural gas would be $3.26 per 

thousand cubic feet in 2020 without the gas under moratorium and $3.22 per thousand, or four (4) cents less with access to the additional gas in moratoria areas. This 

is a predicted price drop of a 1.2 percent. 

This is hardly major or even significant price relief. 

To the extent this is price relief, it would certainly be drowned out by the marketplace, normal fluctuations, or catastrophic events such as Hurricane Katrina or a 

sustained violence in the Middle East. These events clearly have more effect on 

prices than an addition of 5 trillion cubic feet of technically recoverable resources. 

As the former chairman of a small manufacturing company, I can say that industry in this country must retool and find new solutions to rising energy costs before 

the year 2020 when new energy might—just might—come on line from this 

proposal. 

Indeed, in my previous industry sector, the glass imprinting business, there might 

not even be any gas fired ovens soon—this is an idea unthinkable not too many 

years ago. Our industry has traditionally fired on wax based inks at around 1100 

degrees to create a high quality product which is durable and permanent. In our 

business model after Costs of Goods Sold and labor, gas was the third highest expense. 

However, there is promising new technology which could save significant money. 

This technology is ink which is cured by exposure to ultra-violet light. Thus, one 

whole industry segment may soon remove gas from the expense side of its ledger. 

Another local company which isn’t waiting around for government solutions is Potomac Supply, a local, privately owned wood products business located in my old legislative district. As all folks in the wood drying business, Potomac Supply was having great pressure from rising energy costs. 

This family owned company was a large user of liquid petroleum gas in its wood 

drying kilns. Potomac Supply’s solution? This company just brought online two state 

of the art wood chip fired kilns which are now saving 1.2 million gallons of propane 

and over $1,000,000 per year. 

To me, however, the most significant part of the whole Potomac Supply experience 

is that whole idea was only conceived of at a conference in Stockholm Sweden some 

16 months ago. In a mere 16 months, this company has implemented a new, renewable, fuel which is cutting edge, environmentally friendly and reliable. 

But, it is important to remember that new fuels aren’t the only way to lower our 

dependence on non-renewable resources. 

In business, a dollar saved is a dollar earned. The same is true with conservation. 

Energy saved is as good as—better really—than energy tapped. 

It is estimated that an annual inspection of a home natural gas heating system—

which costs $50-100—can help reduce natural gas use in that system by up to five 

percent. 

42

Another example of saving consumption? According to recent Congressional testimony from the Sierra Club, ‘‘By 2017, the renewable energy standards already enacted by states such as New Mexico, California and Texas will produce as much renewable energy as would be produced by gas fired power plants using 0.6 trillion 

cubic feet of gas per year.’’

Compare these very safe alternatives which have certainty to the opening of drilling off the Virginia coast which contains much uncertainty and doesn’t meet current 

Virginia law. 

Doesn’t Meet Law 

The Proposed Final Program Outer Continental Shelf Oil and Gas Leasing Program, released in April 2007 by the Department of Mineral Management Service 

makes a grievous error, which seems technical in nature, but is in fact very important 

On page 6 of the PFP, there is the mistaken notion that the Commonwealth ‘‘as 

called for in Virginia’s legislated energy policy’’ requests a 50 mile buffer off the Virginia coasts. This is consistent with a general perception that the Energy Policy 

passed by the General Assembly of the Commonwealth of Virginia, of which I am 

a former member, encourages offshore exploration of oil and gas. 

In fact, no such request takes place in Virginia’s energy policy and any drilling 

off the Virginia coast is contrary to Virginia’s Energy Policy as passed by the General Assembly. This policy is enumerated in 12 points in Sub-section A of § 67-102 

of the Code of Virginia. 

The only mention of drilling is in point number 12 of the aforementioned section: 

12. [the policy shall] Ensure that energy generation and delivery systems that may 

be approved for development in the Commonwealth, including liquefied natural gas 

and related delivery and storage systems, should be located so as to minimize impacts to pristine natural areas and other significant onshore natural resources, and 

as near to compatible development as possible. 

In fact, subsection C of Section 67-102 states that ‘‘All agencies and political subdivisions of the Commonwealth, in taking discretionary action with regard to energy 

issues, shall recognize the elements of the Commonwealth Energy Policy and where 

appropriate, shall act in a manner consistent therewith.’’

Clearly, inclusion of proposed lease sales off coastal Virginia cannot be justified 

on the basis of Virginia law. 

While it is true that Virginia’s Energy Plan, adopted in 2006, does call for limited 

exploratory, natural gas drilling, this Plan is wholly incompatible with the stated 

goals in the Policy which precedes it in the Virginia Code and should not be used 

as the justification for the Mineral Management Service’s proposal. 

Uncertainty in a pristine area. 

The Virginia coast—particularly the islands off of Virginia’s Eastern Shore—is a 

pristine area in which millions of private and governmental dollars have been spent 

as to preserve an area ecologically significant enough to be a part of the United Nations Bioreserve program. 

Let’s look at the facts: 

• Virginia’s coast represents the largest, most intact coastal wilderness on the 

East Coast of the United States, with over 75 miles of undeveloped coastline 

and thousands of acres of undeveloped barriers islands and tidal marshes. 

• All of the coast’s barrier islands are under conservation ownership and management and, they total well over 60,000 acres. 

• The ecological significance of Virginia’s coastline has brought a number of superior designations to this part of the eastern seaboard. Namely, Virginia’s protected coastline is a: 

1. United Nations International Man and the Biosphere Reserve. 

2. U.S. Department of the Interior National Natural Landmark. 

3. National Science Foundation Long Term Ecological Research Site. 

4. Western Hemisphere International Shorebird Reserve Network Site. 

• Biologically, Virginia’s coast is best known for its great abundance and diversity 

of bird species, including several listed species and many species of concern or 

special interest. The federally endangered piping plover nests on the barrier islands. 

• Barrier islands, along with the coastal estuarine lagoon system, provide globally 

important stopover habitat for up to 24 species of migratory shorebirds during 

the spring, fall, and winter 

• The coastal salt marshes and barrier islands provide nesting habitat for 90 percent of Virginia’s colonial waterbirds, including skimmers, terns, and egrets. 

43

• The barrier island and coastal lagoon tidal wetlands provide important and varied habitat for resident and migratory waterfowl, including key populations of 

American black duck, greater snow geese, and Atlantic brant. 

• Nearshore and intertidal waters also provide important habitat for several species of threatened and endangered sea turtles. 

• Last, but not least, this area supports the largest hard clam aquaculture industry on the Atlantic coast. 

As previously mentioned Virginia’s energy policy specifically states that energy 

generation and delivery systems be ‘‘located so as to minimize impacts to pristine 

natural areas and other significant onshore natural resources’’. 

Having drilling—exploratory or otherwise—within one good tide flow of this area 

is clearly in contrast with Virginia law as stated forth in Virginia’s Energy Policy. 

Spills, substantial mud plumes, underwater seismic activity and drilling all contribute to the uncertainty of the future of the area and have all been well documented in the past. 

Let me reassert the fact that there is no known instance in which one can look 

for natural gas and not look for oil. It is also impractical to think that if oil is found, 

it will not be exploited. The proposal that is before you, therefore, is about oil extraction, not just natural gas exploration. Oil extraction and transport leads to frequent small spills, and an occasional large one. 

Indeed, the Environmental Impact Statement associated with the 5-year plan assumes an eventual 1,500 barrel spill from a tanker or barge. Depending on where 

the spill took place, it could have an enormous impact on Virginia’s pristine natural 

coast. Even at the distance of 50 miles, which provides some degree of protection, 

oceanographers say that a persistent east or southeasterly wind could drive the spill 

from 50 miles offshore within 4 days for a wind of 20 mph and within 8 days for 

a wind of 10 mph. Such winds are not unusual, especially in the early fall. 

Moreover, if oil spill degradation products sink, they then may be carried shoreward by the onshore flow along the bottom. If these degradation products reach the 

vicinity of Chesapeake Bay entrance, they will be drawn into the Bay with the 

lower-layer inflow. The area of influence of this inflow can reach 20 miles offshore 

of the Bay entrance. That means that a tanker or other spill within 20 miles could 

be drawn into the Bay, and enter the slow circulation pattern of Bay waters, with 

damage occurring along the Bay’s beaches in addition to the coastal beaches. 

The potential damage to the pristine areas of the Virginia shore, the world-famous 

Virginia Beach, and the shores of the Chesapeake Bay is just too great a risk for 

the small amount of benefit that the proposal would bring. 

So in conclusion, let me say that: based on the Virginia Energy Policy as passed 

by the General Assembly; based on the minimal impact that gas and oil exploration 

would have on energy supply or energy prices; based on the lack of need for this 

action, and; based on the unacceptable risk to Virginia in case of a spill, it is my 

view that section of the Mineral Management Service’s 5-year plan that would open 

up to Coastal Virginia to exploration is misguided. 

I urge Congress to continue the moratorium and ensure that the Virginia aspects 

of this plan are not enacted. 

Thank you. 

Mr. COSTA. Well, thank you, Mr. Pollard. As we do our due diligence, we will certainly take your testimony into account. And we 

appreciate your making the time and the effort to be here this 

morning. 

Our next witness is Mr. Bob, is it Juettner? Am I pronouncing 

that correctly? 

Mr. JUETTNER. Juettner, please. 

Mr. COSTA. Juettner, OK. I am sorry. Mr. Bob Juettner from 

Alaska. He is Administrator of the Aleutians East Borough, and 

that is a wonderful part of America. And we are pleased that you 

took all the time to come all that way, both you, as well as our next 

witness. 

You need to speak directly into the mic there, otherwise it is 

hard for us to hear. And you know the five-minute rule. 

44

STATEMENT OF BOB JUETTNER, ADMINISTRATOR,

ALEUTIANS EAST BOROUGH, ANCHORAGE, ALASKA 

Mr. JUETTNER. Thank you. Chairman Costa, Ranking Member 

Pearce, members of the Subcommittee. 

The Aleutians East Borough is a regional government of approximately 15,000 square miles at the end of the Alaska Peninsula, 

and encompassing the islands of the Eastern Aleutians. It is approximately half mountain, half ocean. 

People who live there lived through subsistence and commercial 

fishing. You access this area of Alaska only by aircraft or by vessel. 

In 2000, the census recorded an unemployment rate of 33 percent 

in our borough, and a poverty rate much higher than that of the 

national average. We have very few economic opportunities. Those 

that exist, exist either directly or indirectly around fishing. 

Over the last 30 years, the Borough communities of Unga, 

Belikofsky, Squaw Harbor, and Sanak have disappeared. A community abandoned is not a theoretical construct for us, it is very real. 

Especially in light of the fact that we have fewer people living in 

the Aleutians East Borough in 2006 than we had in 1988. 

The five-year OCS plan currently proposed would permit oil and 

gas drilling in the North Aleutian Basin, pending the completion 

of an environmental impact statement. 

The borough supports the lease sale, but only in the context of 

a very rigorous EIS that builds in strong protective measures that 

safeguard our fisheries and subsistence lifestyle. The borough will 

be active in ensuring that proper mitigation measures and environmental protections are built into the final plan for the North Aleutian sale. 

I think it is important for people to realize that it is not only the 

Aleutians East Borough, but it is also the Lake and Peninsula Borough and the Bristol Bay Borough that are involved in this process. 

Congress did impose a moratorium in the past in response to the 

Exxon-Valdez oil spill. When that expired three years ago, we were 

supportive of the decision. Why? It is simple. Our communities are 

disappearing. There isn’t much economic activity. 

Second, and you have heard a lot of testimony on this, the industry is considerably different today than it was in 1989, when the 

Exxon-Valdez went on the rocks. 

And last, I would like to point out that what we are looking for, 

or what we expect to find, is mostly natural gas, as opposed to oil. 

The Aleutians East opposes legislation introduced by Representatives Inslee and Gilchrest to reinstate the moratorium. 

We have statements and comments in the media that the bill is 

supported by Bristol Bay, as if the region is one singular body that 

speaks with one voice. That is not the case. 

In fact, the Bristol Bay Borough and the Lake and Peninsula 

Borough, the other two regional governments that exist on the 

Alaska Peninsula, have passed resolutions supporting the inclusion 

of the North Aleutian Basin in the five-year plan, with proper mitigation. 

The Bristol Bay Native Corporation and the Aleut Corporation, 

corporations formed under the Alaskan Native Claims Settlement 

Act, that represent all the Alaskan natives in the entire region, are 

also supportive of this proposed sale with mitigation. 

45

The borough, along with the other entities mentioned and many 

that are not mentioned, support the proposed five-year program, 

and are supportive of strong oversight by Congress to ensure the 

Interior Department complies with all aspects of NEPA. 

In my written testimony I have attached about two pages of what 

we feel are the threshold issues that need to be addressed by Minerals Management Service and other Federal agencies that would 

take this past our contingent approval to final approval. 

A rigorous EIS is a far better approach than to reinstate the 

moratorium legislatively. 

Thank you for your time. 

[The prepared statement of Mr. Juettner follows:]

Statement of Bob Juettner, Borough Administrator,

Aleutians East Borough, Alaska 

Chairman Costa, Ranking Member Pearce, Members of the Subcommittee, thank 

you for inviting me to testify to present the perspective of the Aleutians East Borough on the Department of Interior’s 5 year plan for oil and gas lease sales on the 

Outer Continental Shelf. 

Before I present our perspective on the OCS issue, let me give you some background on the Borough and its resident communities. We are in an a remote area, 

even by Alaska standards, so it’s important for you to understand some of the challenges that we face on a regular basis that do not present themselves to most other 

communities in the U.S. 

The Aleutians East Borough stretches over 300 miles along the eastern side of the 

Aleutian Islands and consists of the communities of Sand Point, Nelson Lagoon, 

King Cove, False Pass, Cold Bay, and Akutan, with a total number of residents just 

over 2,600. (However, the permanent population is only 1,224 according to the 2006 

figures released by the State of Alaska’s Demographer.)These communities are dependent on subsistence and commercial fishing, can only be accessed by plane or 

boat, and are situated among the most remote and rugged terrain in the United 

States. We deal with extreme weather events on a regular basis. A 100 mile per 

hour hurricane on the East Coast makes national news for a week. A similar-sized 

typhoon hits our coast and no one is aware of it but us and the National Weather 

Service. Yet we must address the same problems after such a storm—flooding, 

cleanup, repair—without access to an efficient transportation infrastructure that 

makes dealing with a storm’s aftermath more manageable. 

A recent study by the State of Alaska’s Department of Labor and Workforce Development labeled the Borough’s residents among the most diverse in the state, consisting of a mix of Native Aleuts, Asian & Pacific Islander—primarily Filipinos who 

work in seafood processing plants—and Caucasians. The 2000 Census recorded unemployment rate of 33 percent in the region, with a poverty rate higher than the 

national average. The economic opportunities for our people are extremely limited 

and are almost entirely dependent on commercial fishing, with salmon and cod as 

the most important fisheries. We don’t have any tourism to speak of and there is 

no mining, timber or sport fishing industry. 

Our fisheries may be healthy from a sustainability standpoint, but economically 

is a different question. In the late 1980s and early 90s, ex-vessel prices for sockeye 

salmon, our most valuable salmon species, were well over $2.00 a pound. They now 

hover at around 60 cents a pound as result of increased competition from subsidized 

farmed fish from overseas. Fuel prices in our area at the same time have gone up 

by nearly a factor of 5 in that same period. The rationalization of the crab and Pollock fisheries have also hurt the economies of some of our communities. Our fishermen are hanging on but barely. 

As a result, we are losing many of our long-term residents that end up being replaced by transient fish processing workers. The population of school age children 

has plummeted. In Akutan, False Pass, and Cold Bay, the average school size—10 

children—is less than half that of the average class size nationally. No Child Left 

Behind? We are facing No Child Left At All if the schools shrink any further. Over 

the last 30 years, the Borough communities of Unga, Belikofsky, Squaw Harbor and 

Sanak, have become ghost towns. Community abandonment is a very real to us. 

These changing economic circumstances have forced the Borough to examine other 

economic opportunities and to be as creative as possible in seeking them out. For 

example, we have developed a cooperative to market fresh wild Alaskan salmon in 

46

1The proposed mitigation measures are in addition to the lease stipulations listed in the OCS 

DEIS for the Alaska Region, and to replace the Fisheries Protection stipulation which AEB has 

determined to be inadequate. 

addition to increasing funds for education and launching a vigorous capital improvement program. So that brings us to the 5 year OCS lease plan. 

The plan currently proposed by the Department of Interior would permit oil and 

gas drilling in the North Aleutian Basin, pending completion of an Environmental 

Impact Statement. The Borough supports the lease sale but only in the context of 

a rigorous EIS that builds in strong protective measures that safeguard our fisheries and subsistence lifestyle. We will be active in ensuring that proper mitigation 

measures and environmental protections are built into the final plan for the North 

Aleutian sale. (See the attached mitigation measures required to remove the Borough’s conditional support.) Concurrently, we will be pressing prospective bidders on 

the leases to guarantee the hiring of local residents and businesses. 

Previously, Congress had imposed a legislative moratorium, which we supported 

when it first went into place, on OCS sales in the North Aleutian basin in response 

to the Exxon Valdez oil spill. That moratorium expired a few years ago and we were 

supportive of that decision. 

Why the change of heart? There are two answers, the first I’ve already given in 

terms of the bleak economic future now faced by the Borough. Secondly, almost 20 

years have passed since the Exxon Valdez. The industry has revised its practices 

substantially since then. New technologies have been developed to prevent blowouts 

and to better direct drilling activities. The entire risk of spills or accidents has not 

gone away, but it is certainly less than at the time of the 1989 spill. Lastly, I want 

to point out, most of the proposed development will be for natural gas, not oil. Natural gas development brings with it its own set of risks but in many cases they differ than those associated with oil drilling and transport. Therefore, the Exxon 

Valdez comparison isn’t exactly apt. 

We oppose legislation introduced by Rep. Inslee to reinstate the moratorium. Proponents of the legislation have mislabeled it as ‘‘stopping drilling in Bristol Bay.’’ 

Bristol Bay is some 200 miles away. We are the closest communities and would be 

most affected by any accident. Also, I hear statements and comments in the media 

from the bill’s supporters that the bill is supported by ‘‘Bristol Bay’’ as if the region 

is one singular body that speaks with one voice. That is not the case. In fact, the 

Bristol Bay Borough and Lake and Peninsula Borough, the two area governments, 

have passed resolutions supporting inclusion of the North Aleutian Basin into the 

5 year OCS Plan with proper mitigation. The Bristol Bay Native Corporation, representing many area Alaska natives, is also in favor as is the Aleut Corporation. 

The Borough, along with the other entities that support the proposed Five Year 

program, are supportive of strong oversight by Congress to ensure that the Interior 

Department complies with NEPA. That oversight is also necessary to ensure that 

the Department uses the latest and most accurate data. For example, the recent 

Beaufort Sea EIS published in 2003, underestimated greatly the value of oil and gas 

prices. This resulted in flawed development scenarios that do not represent the current level of exploration being undertaken in the Beaufort Sea. 

I’ve enclosed additional written comments on the specific NEPA issues the Borough supports being considered as part of the EIS. Report language added in the 

FY 2008 House Interior Appropriations puts the Department on notice that it needs 

to prepare a through EIS before development can go forward. That’s a far better 

approach than to reinstate the moratorium legislatively. That would be a death blow 

to our economic future. 

Thank you again for inviting me to testify today and I look forward to any questions you might have. 

Proposed Mitigation Measures for OCS Leasing In the North Aleutian 

Basin1 Fisheries Protection 

Lease related use will be restricted to prevent conflicts with local commercial, subsistence, and sport harvest activities. All OCS operations, both onshore and offshore, 

must be designed, sited and operated to ensure that: (a) adverse changes to the distribution or abundance of fish resources do not occur; (b) fish or shellfish catches 

are not adversely impacted by OCS activities; (c) all exploration, construction and 

operation activities will be coordinated with the fishing community to maximize 

communication, ensure public participation, and avoid conflicts; (d) ballast water 

treatment is required to remove or eliminate non indigenous species; (e) fishermen 

are not displaced or precluded from access to fishing areas, unless they are adeVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00050 Fmt 6633 Sfmt 6621 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
47

quately compensated for the displacement; (f) fishermen are not precluded from 

participating in designated fishing seasons, unless they are adequately compensated 

for the lost season(s); and (g) fishermen will be compensated for damage to fishing 

equipment, vessels, gear and decreased harvest value from OCS operations in a 

timely manner. NOAA Fisheries must complete a baseline fisheries assessment 

prior to commencement of OCS exploration. NOAA Fisheries must review and approve all exploration and development activities under the leases issued in collaboration with local, state and federal agencies, and implement federal monitoring programs to ensure these fish resource standards are met. 

Transportation, Utility Corridors and Infrastructure Siting 

Transportation routes, utility corridors and infrastructure must be carefully sited 

and constructed to allow for the free passage and movement of fish and wildlife, to 

avoid construction during critical migration periods for fish and wildlife. Pipelines 

should be buried wherever possible. The siting of facilities, other than docks, roads, 

utility or pipeline corridors, or terminal facilities, will be prohibited within one-half 

mile of the coast, barrier islands, reefs and lagoons, fish bearing waterbodies and 

1500 feet from all surface water drinking sources. 

Coastal Habitat Protection 

Offshore operations must use the best available oil spill prevention and response 

technologies to prevent oil spills from adversely impacting coastal habitat, and to 

rapidly respond to oil spills. Geographic response strategies must be used to protect 

environmentally and culturally sensitive sites. 

Local Hire and Training 

OCS Operators will be required to submit a local hire and training program prior 

to any exploration, production or permitting activity, which provides a description 

of the operator’s plans for partnering with local communities to recruit and hire 

local residents, local contractors, and local businesses and a training program to 

prepare local residents to be qualified for oil and gas jobs for exploration and development activities within their region. 

Air Pollution 

Best available emission control technology will be required for all industrial 

sources of air pollution, including criteria air pollutants and hazardous air pollutants. 

Water Pollution 

A zero water pollution discharge will be required for all industrial operations. 

Marine Mammals and Essential Habitat 

All onshore and offshore facilities and OCS-support vessel and air craft routes 

must be carefully sited to avoid marine mammal and essential habitat impacts. 

Social Systems 

All onshore and offshore facilities must be carefully sited, designed and operated 

to avoid adverse social system disruptions and impacts. OCS Operators must: 

(a) Minimize impacts on residential areas, privately-owned surface lands and native 

allotments; (b) Provide utilities, support services and expand other community infrastructure, and services as needed to support their OCS development and associated local population increases; and (c) Communicate with local residents, interested local community groups, and especially fishing organizations. 

Good Neighbor Policy 

All OCS Operators, operating off the Aleutian East Borough coastline, should be 

required to adopt a Good Neighbor Policy that is appropriate for this region. AEB’s 

Good Neighbor Policy requires OCS Operators to work with the AEB to provide cost 

effective fuel, power, transportation, medical services, emergency and other services 

to the local communities. AEB’s Good Neighbor Policy also required OCS Operators 

to provide a compensation system to minimize disruptions to subsistence activities 

and provides resources to relocate subsistence hunters and fishermen to alternate 

areas or provide temporary supplies if a spill affects the taking of subsistence resources. 

Cultural and Historic Site Protection 

OCS Operators must protect all existing cultural and historic sites and notify the 

local government as soon as possible about the discovery of prehistoric, historic and 

archaeological sites. The notification must describe what was discovered and how 

48

the area will be preserved. A final project report shall be submitted to the local government. 

Seismic Design 

All onshore and offshore facilities must be designed to the Seismic Zone IV, Uniform Building Code design standard for the Aleutian Chain. 

Mr. COSTA. Thank you for your testimony. And obviously complying within the five-minute rule. We usually give gold stars for 

that. 

We do appreciate your comments, and we look forward to the 

questioning portion. 

The last witness, but certainly an important part of the panel, 

is a gentleman, Mr. Whit Sheard, is that correct? Sheard, OK. I am 

always trying to make sure that I pronounce people’s names properly. You are the Program Director for the Pacific Environment in 

Alaska, is that correct? 

Mr. SHEARD. Yes, sir. 

Mr. COSTA. Good. And it is good to have you here. And again, 

thanking both of the, as I said, the last two witnesses to travel the 

great distance that you did. And we are all obviously very pleased 

that you are here. So please begin on your opening statement. 

STATEMENT OF WHIT SHEARD, PROGRAM DIRECTOR,

PACIFIC ENVIRONMENT, ANCHORAGE, ALASKA 

Mr. SHEARD. Thank you, sir. Mr. Chairman, honorable members 

of the committee, my name is Whit Sheard, and I am the Alaska 

Program Director for Pacific Environment, which is a non-governmental organization dedicated to the protection of the living environment of the Pacific Rim. 

I am presenting these comments on behalf of myself and the 

Alaska Wilderness League. But I will note that we heavily consulted with other conservation organizations, native communities 

we work with, a fishing organization, and others who I believe have 

submitted comments for the committee. 

The majority of my comments will focus on the environmental 

impacts of the proposed leasing in the waters off of Alaska, but I 

will also touch on the deficiencies in public process and scientific 

review that occurred during the preparation of this five-year plan. 

We believe that this five-year plan is an overly aggressive expansion of oil and gas activity in America’s Arctic waters. In the past 

years, the Minerals Management Service has focused its offshore 

oil and gas offerings in northern Alaska on just over 9 million acres 

in the Beaufort Sea, which I am sure some of you are aware is 

close to some of the on-shore facilities and structures, such as the 

Trans-Alaska Pipeline. 

This year the new proposed plan involves Minerals Management 

Service reprising its failed and costly 1980s attempts to permit oil 

development in the fisheries-rich Bristol Bay region, and expanding 

Beaufort Sea offerings to over 33 million acres, and opening 39 million acres in the remote Chukchi Sea. 

This aggressive expansion in the North Pacific and Arctic Ocean 

comes at a time when the Nation is facing important policy decisions concerning our over-reliance on fossil fuels, how to deal with 

the impacts of climate change on our northern lands, oceans, and 

49

communities, and how to best coordinate our uses of our various 

ocean resources. 

This plan, which will become official national policy, sets us on 

a course to continue our addiction to fossil fuels, accelerate the 

process of climate change, exacerbate current environmental impacts on our northern regions, and unilaterally zone the Arctic 

Ocean as an oil- and gas-drilling sacrifice area. 

I would like to note first that the Bering Sea region and the Arctic Ocean regions of the Chukchi and Beaufort are very different 

regions, and the facts specific to them are very different. And I try 

to touch on both of them briefly. 

The first, of course, is the Bering Sea, the North Aleutian Basin, 

which is the nation’s largest fishing grounds; very important habitat for some of the most heavily fished commercial species in an 

area that was covered by long bipartisan moratoria on oil and gas 

drilling. We believe this should continue. 

Of concern especially is the critical habitat of the eastern stock 

of the North Pacific right whale, which is the most endangered 

whale population on the planet, numbering less than 100 individuals. In similar situations with proposed oil drilling in the habitat 

of endangered whales, we have had scientific panels convene, who 

have told us that the loss of one breeding female would lead to the 

extinction of those populations. 

As such, and considering the reluctance of the Federal government in recent years to designate critical habitat, we believe that 

this recent designation of critical habitat and the biological information we have on these species compels us to leave this area out 

of the five-year plan. 

In terms of the Chukchi and Beaufort Seas, as you are well 

aware, these areas are incredibly important to the Arctic communities along that coast, whose cultures have existed there for somewhere between 2,000 to 20,000 years. I had the good fortune of visiting the Hill a few weeks ago with several whaling captains from 

Point Hope, Alaska, who stand in heavy opposition to this plan, because they believe it is a direct threat to their longstanding culture. 

As such, I would also like to note for the record that the Environmental Protection Agency has pointed out the severe deficiencies in 

this plan in terms of process and in terms of respect for these native communities and their subsistence resources, as well as their 

cultural traditions. 

Furthermore, the Department of Commerce, National Marine 

Fisheries Service, Alaska Region, has recommended the deletion of 

the Bering Sea and Chukchi portions of the plan. I understand the 

need for energy development; we just believe it should be responsible. And if the Department of Commerce is recommending the deletion of these areas, I think we should listen. 

Finally, we have current development on Alaska’s north slope, 

and I think we have a map. We have about 9 million acres that 

are already leased to the oil and gas industry. We have seen recent 

spills from the Prudhoe facility of 200,000 gallons, and we have 

also seen a spill from the one offshore production—or not a spill. 

We have seen holes in pipelines of the offshore production facility, 

the Northstar facility, that has been there. And BP scientists have 

50

also told us that they have discovered a statistically significant deviation in the bowhead whale population that is migrating by this 

area. 

Considering the concern these communities of the North have 

raised about this plan, about these subsistence resources, I think 

it is important that we take a much harder look at this plan. And 

I will conclude there. 

Thank you. 

[The prepared statement of Mr. Sheard follows:]

Statement of Whit Sheard, Alaska Program Director,

Pacific Environment 

Chairman Costa, Ranking Minority Member Pearce, and members of the Subcommittee, good morning, my name is Whit Sheard and I am the Alaska Program 

Director for Pacific Environment. These comments are delivered on behalf of Pacific 

Environment and the Alaska Wilderness League. 

I am very appreciative of the opportunity to testify this morning regarding the 

Minerals Management Service’s Proposed Five Year Program for Oil and Gas Leasing on the Outer Continental Shelf. The majority of my comments will focus on the 

environmental impacts of proposed leasing in the waters off Alaska, but I will also 

touch on the deficiencies in public process and scientific review that occurred during 

the preparation of this Five Year Plan. 

Background 

The Minerals Management Service’s new Five Year Plan, which becomes official 

July 1, 2007, is an overly aggressive expansion of oil and gas activities in America’s 

Arctic waters. In past years MMS focused its oil and gas offerings in northern Alaska on just over 9 million acres in the Beaufort Sea. This year, with the new proposed Five Year Plan, MMS is reprising its failed and costly 1980s attempt to permit oil development in the fisheries-rich Bristol Bay region by offering 5.4 million 

acres of the North Aleutian Basin, is expanding its Beaufort Sea offerings to over 

33 million acres, and is opening 39 million acres in the remote Chukchi Sea. 

This aggressive expansion in the North Pacific and Arctic oceans comes at a time 

when the Nation is facing important policy decisions concerning our over-reliance 

on fossil fuels, how to deal with the impacts of climate change on our northern 

lands, oceans, and communities, and how to best coordinate our uses of our various 

ocean resources. This Five Year Plan, which becomes official policy in three days, 

sets us on a course to continue our addiction to fossil fuels, accelerate the process 

of climate change, exacerbate current environmental impacts on our northern regions, and unilaterally zone the Arctic Ocean as an oil and gas drilling sacrifice 

area. 

Specific concerns over the impacts of this plan include direct threats to the nation’s richest fishing grounds, population level impacts to endangered North Pacific 

right whales and polar bears, disproportionate impacts to Alaska Native communities, and cumulative impacts to a region already facing ecological stress from both 

climate change and the current production of oil and gas on both the North Slope 

and in the Beaufort Sea. 

The Bering Sea 

The Bering Sea is a semi-enclosed northern extension of the North Pacific Ocean 

and is one of the world’s most productive marine ecosystems; the nutrient rich waters of the Bering support at least 450 species of fish, crustaceans, and mollusks; 

50 species of seabirds; and 25 species of marine mammals. These waters area also 

home to America’s largest fishing grounds, containing approximately 40% of our nation’s seafood resources as well as the world’s largest sockeye salmon run. The area 

proposed for leasing and development is also designated critical habitat for several 

species of wildlife, including the world’s most endangered whale population, the 

eastern stock of the North Pacific right whale. 

Illustrative of the unreasonable proposed leasing in the Five Year Plan is Lease 

Sale 92, in the Bering Sea’s Bristol Bay (designated by MMS as the North Aleutian 

Basin). This extremely productive fishing area is the heart of Alaska’s salmon, pollock, King crab, and cod fisheries. According to the North Pacific Fishery Management Council, for the pollock fishery, which is the nation’s largest single fishery, 

21% of all catch occurs within the statistical areas overlapping the proposed lease 

sale. These areas also are home to 40% of the Bering Sea Pacific cod trawl catch, 

51

55% of the Bering Sea flathead sole trawl fishery, 28% of the Bering Sea Pacific 

cod pot fishery, and nearly the entire Bristol Bay Red king crab fishery. 

These fisheries resources, and the $2 billion/yr. renewable economy that they 

drive, are placed directly at risk from seismic exploration, oil spills, contaminated 

discharges, infrastructure construction, and increased vessel traffic. This is why 

fishing organizations such as the Bering Sea Fishermen’s Association, the Bristol 

Bay Driftnetter’s Association, the Bristol Bay Economic Development Council, the 

United Catcher Boats, and the Yukon River Drainage Fishermen’s Association have 

opposed this proposed leasing. 

The North Aleutian Basin lease sale proposed in Bristol Bay also threatens protected areas and wildlife in the region. Bristol Bay’s rich tapestry of habitat is home 

to staging areas and wintering grounds for tens of millions of seabirds and is a feeding ground and migration corridor for marine mammals, including five endangered 

species. Protected areas adjacent to the lease sale area include the Izembek National Wildlife Refuge, which contains globally important wetlands and some of the 

world’s largest eelgrass beds. 

Of utmost biological concern is that the proposed lease sale overlaps extensively 

with the primary summer feeding grounds and designated critical habitat for the 

eastern stock of the North Pacific right whale, the world’s most endangered whale 

population. As recognized by MMS in their Final Environmental Impact Statement 

on the Five Year Plan: 

any perturbation to this small remnant group is likely to affect much of the 

North Pacific right whale population...(FEIS IV-133) 

This point was driven home quite clearly during a North Aleutian Basin planning 

meeting in Anchorage where agency scientists indicated that their research on 

North Atlantic right whales led them to believe that the loss of a single breeding 

female from the eastern stock of the North Pacific right whale would potentially 

lead to the extinction of the species. 

In light of severe data gaps, critically endangered species, and rich renewable 

commercial and subsistence wild fishery economies, it is unclear how MMS can continue to propose leasing in the Bering Sea. The National Marine Fisheries Service, 

which is tasked both with managing commercial fisheries and ensuring the protection of endangered North Pacific right whales has specifically requested that this 

area be deleted from the 5 Year Plan. 

The Beaufort and Chukchi Seas 

The Beaufort and Chukchi Seas are highly important habitat for polar bears, 

whales, walrus and a multitude of other wildlife. They are also crucial to subsistence hunting, whaling and fishing communities, and support a wide variety of wildlife, including several endangered and threatened species. While development of one 

large nearshore facility has been undertaken in the Beaufort Sea, the Chukchi Sea 

is currently devoid of any oil and gas development. This is currently changing, however, as MMS is encouraging seismic exploration of both seas and is planning on 

selling tracts in the remote Chukchi Sea early in 2008. 

Approximately one-sixth to one-fifth of the world’s remaining polar bear population lives along, and depends on, the Chukchi and Beaufort Seas. Currently the 

USFWS is reviewing a petition to list the polar bear under the Endangered Species 

Act. Due to the rapid warming of America’s Arctic and the concurrent retreat of sea 

ice that serves as important habitat for polar bears, we believe that this petition 

is warranted. Furthermore, we are concerned that current oil and gas exploration 

and development is impacting these species. The Minerals Management Service, 

however, continues to pay little attention to climate change and the protection of 

polar bears. The proposed Five Year Plan would not only continue this trend, but 

would rapidly and irresponsibly accelerate it. 

Endangered whale populations in the Beaufort and Chukchi are also of particular 

concern. The Chukchi Sea, for example, provides important habits for bowhead, fin, 

and humpback whales, while the Beaufort Sea is a key migratory corridor and feeding grounds for bowhead whales. Key biological information for these species is lacking, although BP scientists have determined that the routine operations of the 

Northstar drilling site alone has caused a statistically significant deviation of 

bowheads from traditional migratory pathways. 

As noted by the Environmental Protection Agency, the scientific data gaps that 

exist for these species render MMS unable to adequately guarantee mitigation of the 

impacts to these species. This is alarming both ecologically and culturally, as these 

species play important roles in the subsistence lifestyle of Alaska Natives living on 

the Arctic coast. 

52

Oil Spills 

One major impact associated with this plan is the level of pollution that will be 

introduced into these productive marine environments. As demonstrated by the 

Exxon Valdez, oil spills have long-lasting impacts to ecosystems and can cause population level effects on wildlife. This is especially true for endangered populations, 

such as those facing stress from climate change. MMS expects there to be four large 

oil spills in Alaska’s waters during the life of this plan. Unfortunately, industry has 

repeatedly demonstrated that no oil spill technology exists that can recover spilled 

oil among broken sea ice and under the ice sheet and that there is no way to detect 

or track these spills. This is simply an unacceptable level of risk. 

Public Process 

MMS’ public process under the National Environmental Policy Act has been wholly inadequate. First, MMS has produced environmental review documents that fail 

to disclose the actual impacts of this plan, that fail to discuss the significance of 

the lack of baseline data for these ecosystems and the resources that depend upon 

them, and that fail to foster informed decisionmaking. Furthermore, MMS failed to 

offer a legitimate opportunity for affected communities and other stakeholders to 

offer input on the plan’s impacts. For example, a public meeting on the plan held 

in Dutch Harbor, Alaska, the nation’s largest fishing port and home to commercial 

interests that will likely be heavily impacted by any development in Bristol Bay, 

was noticed in the Federal Register the day after the meeting occurred. 

Also of concern to both the conservation community and Alaska Native communities is the rapid pace of current exploration and development activities, recent 

lease sale offerings, and the new Five Year Plan. An oft repeated message for MMS 

at public meetings in these communities is that MMS is simply offering ‘‘too much, 

too soon, too fast.’’ Indeed MMS has recently authorized exploration and drilling 

along the coast of the Arctic National Wildlife Refuge, has leased a half million 

acres in the Beaufort Sea, has authorized multiple seismic operations throughout 

the entire Beaufort and Chukchi seas, and is now proposing to make approximately 

72 million more acres of the Arctic Ocean available for leasing. 

Conclusion 

The Minerals Management Service’s proposed Five Year Plan for Oil and Gas Development on the Outer Continental Shelf, which is set to become national policy 

on July 1, 2007, is an overly aggressive expansion of oil and gas drilling in Alaskan 

waters. MMS has failed to fully inform the public of the extent of ecological damage 

that this plan will cause to our public resources and that will set the nation on a 

five year course to perpetuate climate change, adversely modify critical habitat for 

endangered and threatened species, damage renewable commercial and subsistence 

economies, and cause disproportionate impacts to Alaska Native communities. MMS 

has suppressed important science, has drawn conclusions that bear little relationship to the facts, has ignored the sound advice of other federal agencies, and has 

not offered an adequate public process for either this plan or the multitude of current activities already taking place in Alaskan waters. Considering that the nation 

is currently defining policies to address climate change, energy efficiency, and 

oceans management, the proposed plan bears little relation to rational planning and 

places America’s Arctic at an unacceptable level of risk. In light of the inadequate 

planning process, lack of scientific data, and unacceptable impacts to the environment and communities, we simply do not believe it is prudent to proceed with the 

Alaska portions of the Five Year Plan. 

Mr. COSTA. Thank you very much. Now we will move to the question phase of the panel. 

Senator Wagner, you briefly mentioned in your testimony two 

key points of interest to Virginia are the correction to the offshore 

boundaries and the development of a revenue-sharing plan. 

Could you be a little more specific on those points? 

Mr. WAGNER. Mr. Chairman, I would be delighted. The map—

and Congresswoman Drake did point it out—is in the process of 

MMS, going through their computer programs they used to designate designating state boundaries that exist into the OCS. 

As I understand what they told me, they used some international 

treaty software program that designates, it looks at the curvature 

53

of the coastlines as they do that. And North Carolina, having an 

outward curve from the outer banks, they tend to take that curve 

and then run the lines out along those curves, as opposed to going 

due east, due west, or into the ocean, which one would normally 

think would be the way that boundaries are done. 

And because Virginia has a convex, or it dips in kind of coastline, 

it has a flattening effect on these curves in computer models, 

and——

Mr. COSTA. All right, I think we have got that. 

Mr. WAGNER. OK. And then the second one is——

Mr. COSTA. And you like the revenue-sharing plan? 

Mr. WAGNER. The revenue-sharing plan is excellent, Mr. Chairman. We think that the 30 percent there, and I know that Louisiana has made significant progress on how and——

Mr. COSTA. So they are your role model, huh? 

Mr. WAGNER. Yes. Well, the original draft of the energy bill——

Mr. COSTA. No, I understand. 

Mr. WAGNER.—designated those funds for various——

Mr. COSTA. Mr. Pollard, you mentioned that the Virginia Energy 

Plan is wholly incompatible with the stated goals of Virginia 

energy policy. What do you mean by that? 

Mr. POLLARD. Thank you, Mr. Chairman. In 2006, the Virginia 

General Assembly—of which I was not a member at that time, I 

had just stepped down—painted just both the policy and the plan. 

And the policy contains 12 points. Those 12 points do not talk 

about drilling; and in fact, the closest one that you get to in the 

policy says that drilling shall be located so as to minimize impacts 

to pristine natural areas. And so those two things are contradictory, and it is not quite as clear-cut as some have represented it 

to be. 

Mr. COSTA. All right. Mr. Juettner, you indicated that most of 

the development, I believe in the lease that you were discussing, 

is for gas, is that correct? 

Mr. JUETTNER. Yes, sir. 

Mr. COSTA. Do you also support exploration for oil development, 

as well? 

Mr. JUETTNER. Yes. But again——

Mr. COSTA. If it were to be discovered? 

Mr. JUETTNER. Yes. 

Mr. COSTA. And do you care to comment about the spills that 

were stated by your neighbor there from Alaska in recent years? 

It has gotten a great deal of attention, both on the pipeline spill 

and the others. What do you think, poor maintenance, management? What would you attribute to that? 

Mr. JUETTNER. My understanding, sir, is that as you go into production, the impetus of producing more oil and more profits falls 

very heavily upon the production crews. 

I think it is significant that one of our consultants was one of the 

primary whistle-blowers on the BP oil spill with their pipeline, so 

we are well in tune with what happened on the north slope. 

If you say there isn’t going to be a spill, you are being naive. I 

think you always have to plan for the worst eventualities. 

Mr. COSTA. Mr. Sheard, you talked about the right whale. And 

as you know, there has been an effort by the Minerals Management 

54

Service for three years to study the impacts. What is your opinion 

of that study? 

Mr. SHEARD. Well, thank you, Mr. Chairman. We are always 

happy to see more studies and more biological information being 

developed on endangered species. 

Unfortunately, this being the most critically endangered whale 

population on the planet, what we know already does not bode well 

for this plan. For example, North Atlantic right whales, with a population of at least three times the Pacific right whales, we are talking about——

Mr. COSTA. No, I understand the numbers, but that wasn’t my 

question. 

My question was whether or not you were familiar with the 

study. If you are not, that is fine. 

I do want to get one other last question in. Mr. Juettner, your 

seatmate adjacent to you talked about mitigation measures in his 

testimony. If those were enacted, would you support the efforts for 

the Aleutian Basin? 

Mr. JUETTNER. Unfortunately, we would not. I do not believe that 

mitigation is employed as readily as it is stated. We have seen in 

the North Slope development and the offshore development up 

there that mitigation quickly becomes monitoring, and we have 

also seen Conoco Philips litigate that monitoring and mitigation requirements. And they tend to be lessened. 

And from what we know from technology, you can’t clean up oil 

spills and broken ice conditions. 

Mr. COSTA. All right. My time has expired. I may have some additional questions, but the gentleman from New Mexico, the Ranking Member, is next. 

Mr. PEARCE. Thank you, Mr. Chairman. Mr. Pollard, what was 

the renewable source on that kiln that you were talking about? 

Mr. POLLARD. Wood chips. 

Mr. PEARCE. OK. So you are in favor of logging? 

Mr. POLLARD. Absolutely, sir. 

Mr. PEARCE. Mr. Sheard, do you favor commercial, does your association favor commercial fishing? 

Mr. SHEARD. We do not take a position for or against it. We, of 

course——

Mr. PEARCE. OK, that is fine. 

Mr. SHEARD.—work in partnership with fishermen quite often. 

Mr. PEARCE. OK. So you don’t object to that. 

Mr. SHEARD. No, sir. 

Mr. PEARCE. Now, I have lost the connection. You were talking 

about oil and mortality of whales. But your position is that if there 

is an oil spill, that whales are going to die? Is that your position? 

Mr. SHEARD. That is our understanding from the scientists, particularly with endangered populations such as bowheads and North 

Pacific right whales. 

Mr. PEARCE. Now, you heard the testimony earlier that 63 percent of all oil in the ocean comes from natural spills. How is it that 

these whales have been surviving this 63 percent source of inputs 

of oil for billions of years, and you have a 2 percent chance that 

it is going to come from a platform? How do your scientists answer 

55

that? Did they answer? Did they deal with that 63 percent question? 

Mr. SHEARD. Yes. As Mr. Cruickshank indicated, the devil is in 

the details there. 

For example, in the Arctic, when the ice recedes, leads open in 

the ice, and the bowheads are highly dependent on these leads. If 

there is heavy oil input into these leads, it will potentially oil the 

entire population of migrating bowheads and cause a population——

Mr. PEARCE. The oil doesn’t know where it is leaking, it just 

leaks; 63 percent is going to come from natural seepage. And so I 

do find that curious. 

I find also curious Mr. Pollard’s statement that we shouldn’t exploit the gas because it would be 2020 before it is brought on anyway. To be honest, we had testimony that wind and solar and hydrogen and nuclear, all those power forms—wood chips alike—really won’t be commercial for the next 30 to 40 years. And so I am 

wondering if we should not produce any of those over the next period of time. 

Senator Wagner, we had a discussion from Mr. Pollard about the 

policy versus your vote. Now, tell me again, your vote was specifically about the drilling, right? 

Mr. WAGNER. Yes, Mr. Chairman. The vote in 2005 was specifically on the issue of drilling. Within the 2006 energy bill, there was 

both policy, as well as programmatic requirements. The issue that 

originally came before the General Assembly had the original language of the drilling very clear. The Governor and us negotiated——

Mr. PEARCE. So you used the words exploration, you used the 

words oil and gas——

Mr. WAGNER. Right, right. 

Mr. PEARCE. And the State Legislature didn’t find any conflict 

with this policy that Mr. Pollard was wanting——

Mr. WAGNER. Right. We didn’t. And in fact, it references, as a patron of the bill, I can assure you there is no conflict in my mind. 

Mr. PEARCE. Mr. Juettner, the local government, the regional 

government that you represent, what tools do you all have to make 

sure that you are just not kind of herded along? What kind of work 

are you all doing to inform yourselves about the whole prospect of 

fishing, oil and gas, together? Stopping oil and gas if you don’t 

want it? What have you all done? 

Mr. JUETTNER. Well, it is going to be a hard question to answer. 

We have about a 20-year history on this question, going back to as 

early as 1984, when a group of our fishermen met with three members from the Shetland Islands to discuss oil and gas development 

as we looked at the old lease sale 1992. Their first recommendation 

was a form of regional government, which we did in 1988. 

Since then, in the last three years we have been actively engaged 

in studying the industry, both on shore and offshore. We have enacted a new planning and zoning ordinance that gives us real 

teeth. We patterned the zoning ordinance after that of the North 

Slope Borough. We have traveled extensively, made familiarization 

trips to Cook Inlet to see how the RCAC interfaces with the indusVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00059 Fmt 6633 Sfmt 6602 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
56

try. Oil spill response programs. We have been doing our homework for three years. 

Mr. PEARCE. So you have been pretty good stewards, in your 

mind, of the potentials on both sides, both the risk and the reward. 

You had mentioned that the salmon harvest has declined. Why 

is that? And what effect has it had on your region? 

Mr. JUETTNER. It is not the salmon harvest, sir. It is the value 

of the salmon harvest. 

In 1988, when I first worked, one red salmon was worth $14. A 

barrel of oil was worth $12. Today that red salmon is worth $3.50; 

a barrel of crude is worth $62, $65 a barrel. The fish are still there. 

It is the value of the fishery that has deteriorated. 

Mr. PEARCE. Why is the value going down? Is it people are demanding less? 

Mr. JUETTNER. Basically, farmed salmon has undercut the market for wild salmon. 

Mr. PEARCE. So competition is up. Supply is there, demand is up, 

supply is up, so the price falls. 

Thank you, Mr. Chairman. I have more questions if you go a second round. 

Mr. COSTA. All right. The next gentleman, a member of the 

Subcommittee, and I am always glad to hear from the gentleman 

from New Jersey, Mr. Holt. 

Mr. HOLT. Thank you, Mr. Chairman. Let me first direct a question to both Mr. Pollard and Mr. Wagner. 

Do you think this is a matter—and same question. Do you think 

this is a matter for Virginia only? 

Mr. POLLARD. Sir, clearly the MMS deals off the coasts of many 

states. So no, sir. Oh, and opening up the—I see where you are 

going—opening up the Virginia coast could potentially have effects 

on adjoining states, absolutely. 

Mr. HOLT. Mr. Wagner? 

Mr. WAGNER. Congressman, I would concur with you, yes, it 

would have impact. And I know that MMS took the time to have 

public hearings up in New Jersey. I have attended one of those, I 

don’t know if they had any others. 

I will also say that the same activity that occurs in Nova Scotia 

adjacent to Maine would have similar potential impacts to the 

coast of Maine as indeed to entire New England. 

Mr. HOLT. In an earlier version, you, I am sure, are aware that 

New Jersey and Virginia were in the same administrative region. 

The geography hasn’t changed, only the lines for the administrative 

region. And so any physical and economic effects, I would imagine, 

are unchanged by the change in the regional lines. 

Would you say, Mr. Wagner, that when you advocate this, is it 

because you see a low environmental risk? Or because you see the 

economics great enough to make it worth taking an environmental 

risk? 

Mr. WAGNER. Mr. Chairman, Congressman Holt, we studied that 

at length, and looked at both the actual data that came off the 

platforms, and then the empirical data that we see. We see the 

fjords in Norway just as pristine today as before they developed the 

North Sea oil fields. We see the active fields off the coast of Nova 

Scotia and their lack of any type of impact that I can see on the 

57

outer banks of the Grand Banks fishing areas; arguably, the most 

important. 

We took the time to study very carefully the activities in the Gulf 

of Mexico, and basically discovered a website, www.towersoflife, 

that tell you that each one of these platforms has become its own 

ecosystem down there. Where no coral would exist, it exists on the 

platforms. Endangered species have their entire life cycles on these 

platforms. On average, there are 30,000 to 50,000 fish that congregate on each platform. 

So we looked at all the data that was available. We looked at the 

remarkable track record that we have seen in the offshore industry. And we balanced that both with the economic needs, and determined that when you do a risk-reward variant, vis-a-vis tanker 

traffic, which has proven itself, it would be far more dangerous 

than——

Mr. HOLT. So you are saying that it is either a low risk, or perhaps economic—I mean, an environmental benefit. 

Let me ask Mr. Pollard to answer the same question. 

Mr. POLLARD. Thank you, sir. I would, not surprisingly, look at 

it on the flip side. The DOE says that the price of natural gas with 

the moratorium lifted is going to be $3.26. Excuse me, with the 

moratorium in place it is going to be $3.26 per thousand, and just 

four cents less with the moratoria areas opened. So therefore offering very little economic upside. But the pristine nature of the 

Virginia coast, not to mention, I am sure, off the coast of your 

state, leads to considerable downside risk. 

Mr. HOLT. Looking at the information with regard to the North 

Aleutian Basin, the final environmental impact statement for the 

five-year program posits that there would be one large oil spill, two 

intermediate-sized spills, and numerous smaller spills. 

What do you think would be the comparable finding for Virginia 

area? 

Mr. POLLARD. The EIS estimates a 1,500-barrel spill. I don’t 

know with what percent certainty that is, because that is back in 

the notes of the EIS. But if it is, that is supposed to be either a 

tanker or barge spill, which means its likelihood of being in shore 

is much higher. Obviously, if it is onloading or offloading, it could 

be at the platform itself. That is 75,000 gallons. 

Mr. HOLT. And how broad geographically do you think the effect 

would be? 

Mr. POLLARD. Well, I have operated outboard engines all my life. 

When I spill, you know, a cup of oil, it covers a pretty good area. 

So I wouldn’t hesitate—I am not a specialist in that area, but it 

wouldn’t be pretty, I can tell you that. 

Mr. HOLT. Thank you. Thank you, Mr. Chairman. 

Mr. COSTA. I thank the gentleman from New Jersey for your 

thoughtful questions, and for your involvement in this morning’s 

hearing. 

I want to thank this panel for being here today. There are some 

additional questions that I believe members of the committee have 

that we will submit to you, that we will ask you to return in writing. And we appreciate that the timing with our appropriations 

measures on the Floor limits our ability to go at greater length. 

But we do value this effort. Because frankly, as I said on my openVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00061 Fmt 6633 Sfmt 6602 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
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ing statement, we really believe that a lot more work needs to be 

done as we try to thoughtfully construct both the risk management 

and the risk assessment as it relates to the important public resource that is there, and the balancing effort that this subcommittee and the full committee has to consider as we protect our 

public lands, and at the same time utilize those resources to the 

degree that makes sense, given the tremendous challenges our nation finds itself in with regards to our energy needs, as well as trying to at the same time be good stewards of the environment. Not 

an easy task, but nonetheless one that we are all committed to 

working on. 

So I want to thank both panel members, I want to thank the 

members, our colleagues who wanted to testify, for their words of 

wisdom. And we will look forward to continuing this effort in the 

months ahead. 

The Subcommittee hearing is now adjourned. 

[Whereupon, at 12:04 p.m., the Subcommittee was adjourned.]

[Additional material submitted for the record follows:]

[A letter submitted for the record by the Alaska Independent 

Fishermen’s Marketing Association follows:]

Alaska Independent Fishermen’s

Marketing Association

P.O. Box 60131

Seattle, WA 98160

Phone/Fax (206) 542-3930

June 25, 2007

Mr. Jim Costa, California, Chairman 

Subcommittee on Energy and Mineral Resources 

1626 Longworth House Office Building

Re: Alaska Independent Fishermen’s Marketing Association supports restoring 

protection for Bristol Bay from offshore drilling

Dear Mr. Costa,

The Alaska Independent Fishermen’s Marketing Association (AIFMA) is the largest salmon fishermen’s association in Bristol Bay, Alaska. AIFMA’s mission is to 

protect the renewable salmon resource and promote economic sustainability for commercial salmon fishermen in Bristol Bay. In keeping with our mission, AIFMA 

strongly supports restoring protection for Bristol Bay from offshore oil and gas drilling. The risks from offshore drilling to the salmon fishery and the families and livelihoods it supports are simply too great. 

Bristol Bay has the largest sockeye salmon run in the world and last year the 

value of the fishery was nearly $100 million. The Bristol Bay sockeye fishery is important economically, not only for Alaska, but also to other West Coast states. Nearly 3,000 salmon permit holders fish in Bristol Bay. These fishermen live in Alaska 

and up and down the West Coast. The value and vitality of the Bristol Bay salmon 

fishery is connected to the local economies of each of these states. 

Recently, AIFMA has been involved with collaborative efforts amongst permit 

holders to increase the value of Bristol Bay wild salmon by supporting the formation 

of the Bristol Bay Regional Seafood Development Association (BBRDSA). Fishermen 

are taking important steps to contribute to their livelihoods and to ensure the economic viability of the fishery into the future. Unfortunately, proposals for major industrial development activities, including offshore leasing, threaten to undermine 

this progress. 

AIFMA has been opposed to offshore drilling in the North Aleutian Basin planning area for many years. AIFMA was a part of the original coalition of fishing, conservation, community, and Native groups who fought hard to protect the region from 

59

offshore drilling in the 1980’s and 90’s. The risks posed to the salmon fishery and 

fishermen’s livelihoods from offshore drilling remain the same today. 

The 5.6 million acre block proposed for leasing in 2011 by Minerals Management 

Service (MMS) overlaps vital marine habitat for salmon. Sockeye salmon utilize the 

area targeted for development for a number of key periods during their lifecycle including smolt migration, juvenile feeding grounds, and adult return migration. Offshore exploration, development, and production activities in these waters critical to 

the salmon life cycle are tremendously risky to the economically and culturally important salmon fishery. 

MMS has predicted that OCS development in the region will lead to at least one 

large oil spill of 1,000 barrels or more and numerous smaller spills (Final EIS 5-

Year Proposed OCS Leasing Program). Summertime surface currents in the region 

would push spilled oil in a northeasterly direction, right towards where the salmon 

fishery takes place. Cleanup capabilities in the region are limited due to the extreme tides, currents, severe sea-ice conditions and hurricane-force winds that are 

common in the region. 

A spill could not only be biologically harmful to salmon by causing lethal and sublethal impacts and degradation of habitat, but could also have serious implications 

for the ability to market the fish. Indeed, one accident has the ability to stifle the 

progress being made by fishermen to increase the value of Bristol Bay salmon and 

could quickly undermine their investments in the fishery. Offshore drilling in this 

region could have a ripple of negative effects from Bristol Bay itself down through 

Washington, affecting fishermen and the economies where they reside. 

Other potential impacts of offshore drilling that present a danger to salmon include seismic surveys which research suggests could alter salmon migratory routes 

and can have lethal and sublethal impacts on small fish in the vicinity of airguns. 

The discharge of drilling muds and cuttings has been shown to degrade and alter 

zooplankton communities, a key food source for salmon. 

We must save our world-class, premier fisheries located in Bristol Bay from the 

inevitable negative impacts of oil and gas development. With zero benefit for fishermen and the potential for devastating impacts to our fishing industry, we strongly 

urge that there be no offshore leasing in Bristol Bay. We hope that you will be a 

strong voice for salmon fishermen in Washington and will work with other members 

of the House Appropriations committee to restore protection for Bristol Bay. 

Sincerely,

[A letter submitted for the record by the Alaska Marine 

Conservation Council follows:]

June 26, 2007

To: Mr. Jim Costa, California, Chairman 

Subcommittee on Energy and Mineral Resources 

1626 Longworth House Office Building 

(202) 225-9297 Fax: (202) 225-5255

From: Kelly Harrell, Friends of Bristol Bay Project Director 

Alaska Marine Conservation Council 

P.O. Box 101145

Anchorage, AK 99510

Re: Oversight Hearing on ‘‘The Minerals Management Service’s Proposed 2007-2012 

Program for Oil and Gas Leasing on the Outer Continental Shelf’’

Dear Chairman Costa,

The Alaska Marine Conservation Council (AMCC) appreciates this opportunity to 

provide written testimony for the House Natural Resources Committee hearing on 

the Minerals Management Service’s 5-Year Outer Continental Shelf (OCS) Leasing 

Program for 2007-2012. On behalf of our board and over 700 members who include 

commercial fishermen, subsistence harvesters and others whose livelihoods depend 

on healthy marine ecosystems, we thank you for holding a hearing on proposed OCS 

leasing in Alaska, a topic very important to Alaska’s coastal communities and fishing industry. 


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1 NOAA Fisheries. Fisheries of the United States 2005. February 2007. Accessible online at: 

http://www.st.nmfs.gov/st1/fus/fus05/index.html . 2Minerals Management Service. Final Environmental Impact Statement, Outer Continental 

Shelf Leasing Program 2007-2012. April 2007. Accessible online at: http://www.mms.gov/5-year/

2007-2012lFEIS.htm . 

AMCC is opposed to the inclusion of Bristol Bay and the southeastern 

Bering Sea (known as the North Aleutian Basin Planning Area) in the 2007-

2012 OCS Leasing Program. This area, often referred to as the nation’s ‘‘fish basket,’’ has a long history of bipartisan protection stretching back to the Exxon Valdez 

oil spill in 1989. This past January, President Bush lifted the executive ban on leasing in Bristol Bay, ending the legacy of protection for this rich and valuable marine 

ecosystem. The President took this action despite pleas not to do so from a diverse 

array of interests including commercial fishing organizations, Alaska Native Tribes 

and villages, and conservation groups (see attached letter). These groups stand 

united in their position that the potential benefits of offshore oil and gas drilling in Bristol Bay are not worth the great economic, ecological, and cultural risks. 

In this 5-year OCS program, MMS has scheduled a lease sale for in 2011 in a 

5.6 million acre block of the North Aleutian Basin Planning Area that lies at the 

center of the most important region for the commercial fishing industry in 

Alaska and the nation. More than 40% of our nation’s total seafood harvest comes 

from the Bering Sea 1 and the renewable fisheries resources potentially impacted by offshore drilling are worth more than $2 billion annually (see attachment). The area 

proposed for leasing overlaps fishing grounds and/or habitat for the world’s largest 

sockeye (red) salmon fishery, the globally-important Bering Sea groundfish fishery, 

the famous Bristol Bay red king crab fishery, and high-valued Pacific halibut fishery. These fisheries resources are the economic and cultural foundation of the region’s coastal communities and provide jobs for fishermen and fishing families 

throughout Alaska and the Pacific Northwest. Any impacts to these renewable fisheries resources would directly affect the vitality of the fishing industry here as well 

as the nation’s supply and exports of seafood products. Furthermore, as fisheries 

continue to collapse and are overfished within the nation and around the world, the 

fisheries in the Bering Sea continue to stand as a model for successful and sustainable management of fisheries resources. Offshore drilling would compromise these 

accomplishments and Alaska’s reputation as a leader in fisheries management. 

The risk from oil spills is extremely high in the Bering Sea region known for its 

powerful storms and high frequency of volcanic and seismic activity. MMS predicts 

at least one large oil spill and numerous smaller spills will occur if offshore drilling 

takes place. 2 Cleanup capabilities in rough weather and sea ice, which extends 

south into the North Aleutian Basin Planning Area in the winter months, are simply nonexistent. Even small spills have the potential to cause ecological harm to marine resources and could result in fisheries closures if there is the slightest perception that fish resources were affected. Also, due to the utilization of shallow shelf 

areas and adjacent coastal habitats by sensitive life forms of fish and crab, and by 

such species at various life stages (see attached maps), the potential for a pollution 

event to cause population-level impacts to an economically important fishery is high. 

For example, sockeye salmon utilize habitats within and surrounding the proposed 

lease sale area as outmigration routes as smolts, as juvenile feeding grounds, and 

as adult migration routes. This species, which supports a fishery worth nearly $100 

million in 2006 (see attachment), would therefore be vulnerable to an oil spill 

throughout a number of important life stages. 

The southeastern Bering Sea is a remote region only accessible by air and by boat. 

Industrial development is non-existent here with the exception of fishing-related activities. In addition to rich fisheries resources, the region also supports around 25 

species of marine mammals including the world’s most endangered whale—the 

North Pacific right whale. The area proposed for leasing substantially overlaps designated critical habitat for this species on the brink of extinction (see attached map). 

The southeastern Bering Sea is also a haven for migratory seabirds and waterfowl 

and contains the greatest concentration of seabird colonies on Earth. The continental shelf of the Bering Sea is truly one of the most productive in the world and 

contains species and habitats that are ecologically important on a global scale. This 

‘‘wet wilderness’’ is a crown ocean jewel that our nation should take pride in and 

nurture; not put at risk for the short-term development of relatively small amount 

of fossil fuel resources. 

OCS development in Bristol Bay would dramatically alter the pristine character 

of this awe-inspiring region that is home to five National Wildlife Refuges and eight 

state protected areas. The development scenario below for the North Aleutian Basin 

61

3Minerals Management Service. Final Environmental Impact Statement, Outer Continental 

Shelf Leasing Program 2007-2012. April 2007. Page IV-153; IV-136 Accessible online at: http:/

/www.mms.gov/5-year/2007-2012lFEIS.htm . 4Minerals Management Service. Final Proposed Leasing Outer Continental Shelf Leasing Program 2007-2012. 5Minerals Management Service. Planning Area Resources Addendum to Assessment of Undiscovered Technically Recoverable Resources of the Nation’s Outer Continental Shelf, 2006. 6 Ibid. 

7Minerals Management Service. Final Environmental Impact Statement, Outer Continental 

Shelf Leasing Program 2007-2012. April 2007. Page IV-522. Accessible online at: http://

www.mms.gov/5-year/2007-2012lFEIS.htm . 

Planning Area laid out by MMS in the 5-Year Program Final Environmental Impact 

Statement (EIS) paints a vivid picture of the industrial-scale of activity that could 

be expected if leasing occurs: 

• 4-6 offshore platforms 

• up to 20 exploration wells 

• up to 200 production wells 

• up to 150 miles of offshore pipeline—gas pipeline and condensate/light crude oil 

pipeline (impacting up to 555 acres of benthic habitat) 

• up to 50 miles of new onshore pipeline 

• 2 pipeline landfalls 

• 1 waste facility 

• 1 processing facility 

• 1 shore base and a new dock or causeway for service vessels in onshore areas 

along the coast of the Alaska Peninsula, Unimak Island, or north of the Bristol 

Bay coast 

• 1 or more new access roads may be needed for each new facility and for pipeline 

maintenance activities. 3

This network of facilities, support bases, and oil and gas transportation infrastructure would impact hundreds of miles of habitat for fish, marine mammals, 

seabirds, waterfowl, and terrestrial mammals stretching from the seafloor and 

water column in the Bering Sea to coastal and inland areas along the north and 

south side of the Alaska Peninsula. Beyond oil spills and the sprawling footprint of 

infrastructure, the impacts from seismic surveys, and the discharge of drilling muds 

and cuttings pose additional risks to the fisheries resources and rich marine life in 

Bristol Bay and the southeastern Bering Sea. Given what’s at stake in the region, 

the potential impacts of these activities are unacceptable. 

The ecological, economic, and cultural risks from offshore drilling in 

Bristol Bay are extremely high but the potential benefits are minimal. MMS 

estimates the net economic value of developing oil and gas resources in the North 

Aleutian Basin at $7.7 billion dollars over the entire 25-40 year lifespan of the 

project. 4 This figure pales in comparison to the $2 billion dollar annual renewable 

fisheries economy that offshore drilling would put at risk each year. 

The mean estimated technically recoverable resources for the North Aleutian 

Basin Planning Area are 8.62 trillion cubic feet of gas and 0.75 billion barrels of 

oil. 5 This represents less than 1% of the total mean estimated technically recoverable oil in the U.S. OCS (85.88 Bbo) and around 2% of gas (419.88 Tcf). 6 Clearly, 

by protecting Bristol Bay, we would not be cutting off access to our nation’s ocean 

energy resources, most of which are already open to exploration and development 

in the Gulf of Mexico. The relatively small amounts of oil and gas in Bristol Bay 

would do little to end our nation’s reliance on foreign fossil fuels. MMS states in 

the Final Environmental Impact Statement for the 5-Year Program that, ‘‘Most benefits (of the 5-Year Program) would be short-term and would delay the increase in 

the Nation’s dependency on oil imports.’’ 7 It is simply not good energy policy, 

economic policy, or fisheries policy to allow offshore leasing amidst the 

productive waters of Bristol Bay and the southeastern Bering Sea. 

AMCC urges Members of Congress to request that MMS remove Bristol 

Bay from the 5-Year OCS Leasing Program and strongly hopes that members will work to restore protection for this unparalleled and extremely 

valuable marine ecosystem. We encourage other Members of Congress to support 

and cosponsor the Bristol Bay Protection Act (HR 1957) introduced by Representatives Inslee, Hinchey, and Gilchrest (see attached letter). This bill would provide 

permanent protection for the Bering Sea’s renewable fisheries economy, the region’s 

coastal communities, as well as the globally important marine wildlife in the region 

from the potentially devastating impacts of offshore oil and gas development. 

Again, thank you for this opportunity to comment. Please feel free to contact me 

with any questions or concerns.

62

Sincerely,

Kelly Harrell 

Project Director, Friends of Bristol Bay

Enclosures 

[An Open Letter to President George W. Bush submitted for the record by the 

Alaska Independent Fishermen’s Marketing Association, Alaska Center for the Environment, Alaska Longline Fishermen’s Association, et al., follows:]


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Alaskans Urge Congress to Support H.R. 1957 & S 1311—The

Bristol Bay Protection Act 

The Alaska Marine Conservation Council (AMCC), an Alaska-based organization 

whose more than 700 members include commercial fishermen, subsistence harvesters, and others whose livelihoods depend on healthy marine ecosystems, supports the Bristol Bay Protection Act introduced in the House by Representatives 

Inslee (D-WA), Gilchrest (R-MD), and Hinchey (D-NY) and the companion bill introduced in the Senate by John Kerry (D-MA). The Alaska Marine Conservation Council urges other Members of Congress to co-sponsor these important bills. 

AMCC has been working closely with communities and fishing interests to protect 

Bristol Bay from offshore drilling for over four years. More than 40 local and regional entities including fishing associations, Tribes, villages and other Native organizations have voiced opposition to offshore oil and gas drilling in 


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8Minerals Management Service. Final Environmental Impact Statement, Outer Continental 

Shelf Leasing Program 2007-2012. April 2007. Accessible online at: http://www.mms.gov/5-year/

2007-2012lFEIS.htm . 9 NOAA Fisheries. Fisheries of the United States 2005. February 2007. Accessible online at: 

http://www.st.nmfs.gov/st1/fus/fus05/index.html . 

Bristol Bay. The livelihoods of local residents, as well as commercial fishermen and 

subsistence harvesters, are directly tied to the health of the renewable marine resources in this region. These living, marine resources would be put at great risk 

from offshore oil and gas development. The federal government’s own studies 

predict drilling in Bristol Bay and the southeastern Bering Sea (North 

Aleutian Basin Planning Area) would lead to at least one large oil spill, 2 

medium-sized spills, and numerous smaller spills. 8

By all accounts, Bristol Bay is one of the nation’s crown ocean jewels. The bay 

is a large estuary of the Bering Sea and its broad, shallow continental shelf if one 

of the most productive in the world. Approximately 40% of the entire U.S. seafood catch comes from the Bering Sea, including the world’s largest sockeye (red) salmon fishery, globally-important Bering Sea pollock, and Bristol 

Bay red king crab. 9 The largest concentration of seabird colonies in North America occurs here. Numerous marine mammal species have important habitat in Bristol Bay—including threatened and endangered species such as the Northern fur 

seal, Steller sea lion, southwestern sea otter, fin whale, humpback whale, and the 

extremely imperiled North Pacific right whale. 

Bristol Bay has a long history of bipartisan protection from OCS leasing that 

dates back to the Exxon Valdez oil spill in 1989. In January 2007, President Bush 

lifted a long-standing executive ban on offshore drilling in Bristol Bay removing the 

last layer of protection for the region. 

The Final 5-Year OCS Leasing Program recently transmitted to Congress for a 

60-day review period proposes to hold a lease sale in Bristol Bay (North Aleutian 

Basin Planning Area) in 2011. Congress must act to protect Bristol Bay’s ecologically, economically, and culturally important renewable resources from 

the short-term development of fossil fuels. 

By supporting the Bristol Bay Protection Act, you would be: 

• Supporting the continued economic development of renewable fisheries resources of the southeastern Bering Sea that are worth more than $2 billion annually and are vital to local and state economies in Alaska and the Pacific 

Northwest (see attachment); 

• Supporting sound economic policy that refuses to risk this fisheries economy for 

an estimated $7.7 billion dollar net economic value over the entire 25-40 year 

lifespan of fossil fuel development in Bristol Bay; 

• Helping to protect the jobs of fishermen who have nothing to gain and everything to lose from proposed offshore oil and gas development; 

• Ensuring that the four National Wildlife Refuges and eight Alaska state protected areas in the region are not subject to degradation from oil and gas activities and can continue to provide vital habitat to a range of seabird, waterfowl, 

marine mammal, and terrestrial species; 

• Supporting an enlightened vision for our nation’s energy policy that refuses to 

risk economically, ecologically, and culturally important renewable resources for 

short-term fossil fuel development that would benefit few and could be detrimental to many. 

Your support of the Bristol Bay Protection Act will help to safeguard globally important commercial fisheries, diverse marine life, and the economies and traditions 

that depend on their long term health. Please feel free to contact us for more information or with any questions or concerns.

Sincerely,

Kelly Harrell 

Project Director, Friends of Bristol Bay 

Alaska Marine Conservation Council 

P.O. Box 101145

Anchorage, AK 99510

(907) 277-5357

Kelly@akmarine.org 

www.akmarine.org 

65

Ten Reasons to

Protect Alaska’s Bristol Bay

from Offshore Oil and Gas Drilling 

Bristol Bay and southeastern Bering Sea waters support globally important commercial fisheries valued at more than $2 billion dollars annually. The area targeted 

for offshore oil and gas development overlaps with vital habitat and fishing grounds 

for salmon, red king crab, herring, halibut, pollock and cod. The region provides 

more than 40% of total U.S. fish catch and supports fishermen and fishing families 

throughout Alaska and the Pacific Northwest. 

Bristol Bay is home to the world’s largest wild run of sockeye salmon. The region’s 

salmon are important not only ecologically, with Bristol Bay serving as one of the 

last global strongholds for Pacific salmon, but also economically and culturally. The 

area targeted for leasing falls directly within important migratory and feeding habitat for salmon from throughout western Alaska. 

Subsistence is the irreplaceable mainstay of Alaska Native tradition and culture. 

Salmon is the life-blood of village economies and ways of life. In addition to salmon, 

southwestern Alaskan communities rely on halibut, herring, marine mammals and 

other ocean and coastal resources for their livelihoods. Impacts from offshore drilling would threaten these rich subsistence traditions. 

The Bristol Bay region is of global ecological importance for fish, seabirds, waterfowl and marine mammals. The eastern Bering Sea is renowned for its enormous 

biological productivity and provides habitat for hundreds of fish species, dozens of 

marine mammal species and is home to one of the world’s greatest concentrations 

of seabird colonies. 

Federal studies suggest offshore oil and gas production in Bristol Bay would result in one or more major oil spills of more than 1,000 barrels and a number of 

smaller spills. Recovery of spilled oil in Bristol Bay is unfeasible as clean-up technology is inadequate in rough sea conditions, ice, and strong tides and currents. 

The Bering Sea ecosystem is already under stress from climate change. Scientists 

have demonstrated that warming temperatures have already had significant and 

unprecedented effects on the southeast Bering Sea and Bristol Bay ecosystem including sea bird die-offs, rare algal blooms, declines in marine mammals and altered 

fish distribution. Increased ocean acidification, warmer ocean temperatures, disrupted oceanic production cycles, and warmer stream temperatures are expected to 

cause declines in productivity in the region over the next 30 years. Any further 

stress, such as offshore oil and gas activities, will exacerbate these threats to the 

integrity and resilience of the ecosystem. 

Offshore drilling in Bristol Bay would further threaten a number of endangered 

species including the world’s most endangered whale—the North Pacific right 

whale—whose population is estimated to number less than 100 individuals. More 

than half of the area proposed for offshore development is designated critical habitat 

for this species. 

There are four national wildlife refuges (NWRs) in the region that could be affected by offshore oil and gas development: Alaska Peninsula NWR, Alaska Maritime NWR, Izembek NWR, and Togiak NWR. The proposed transportation route for 

getting oil and gas to the market calls for a pipeline through the Alaska Peninsula 

NWR which provides habitat for salmon, waterfowl, wolf, wolverine, lynx, caribou, 

brown bears, and numerous other species. Izembek NWR, which contains some of 

the world’s largest eelgrass beds and globally important wetlands that provide habitat for millions of migratory birds, is directly adjacent to the proposed lease sale 

area. 

We already determined that Bristol Bay is too sensitive to allow offshore oil and 

gas drilling. After the Exxon Valdez oil spill demonstrated the tremendous damage 

an oil spill in Alaskan waters can have on fish, wildlife, and communities, Congress 

placed the region under the nationwide offshore drilling moratorium and the American public paid more than $100 million dollars in 1995 to buy back 

The economic benefits of renewable fisheries resources far outweigh the potential 

economic value of nonrenewable offshore oil and gas resources. The Minerals Management Service has estimated the total net economic value of developing Bristol 

Bay’s oil and gas resources at $7.7 billion dollars over the entire 25-40 year lifespan 

of the project. Every year of offshore drilling would pose risks to an estimated $2 

billion dollar annual wild fisheries economy. 

A broad spectrum of conservation, community, and fishing interests are all opposed to offshore drilling n Bristol Bay. Join us in calling on Congress to restore 

protection for this unique marine ecosystem.

Contact Kelly Harrell at the Alaska Marine Conservation Council at (907) 277-5357, 

66

e-mail kelly@akmarine.org, or got to www.akmarine.org to learn more about how 

you can help. 


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[A statement submitted for the record by Faith Gemmill, 

Resisting Environmental Destruction on Indigenous Lands 

(REDOIL), follows:]

REDOIL

Resisting Environmental Destruction on Indigenous Lands

A Project of the Indigenous Environmental Network

P.O Box 74667

Fairbanks, AK 99707-4667

PH: 907-456-2181

Fax: 907-456-2184

July 12, 2007

Mr. Jim Costa, California, Chairman 

Subcommittee on Energy and Mineral Resources 

1626 Longworth House Office Building 

(202) 225-9297 Fax: (202) 225-5255

Via Email: Holly.wagenet@mail.house.gov

RE: Subcommittee on Energy and Mineral Resources: Written testimony for Oversight Hearing on ‘‘The Minerals Management Service’s Proposed 2007-2012 

Program for Oil and Gas Leasing on the Outer Continental Shelf’’ held on 

June 28, 2007.

Mr. Chairman, 

On behalf of Resisting Environmental Destruction on Indigenous Lands (REDOIL) 

I submit these comments as written testimony for the Subcommittee on Energy and 

Mineral Resources: Oversight Hearing on ‘‘The Minerals Management Service’s Proposed 2007-2012 Program for Oil and Gas Leasing on the Outer Continental Shelf’’ 

held June 28, 2007

REDOIL is a powerful movement of Alaska Natives who are challenging the oil 

industry and demanding their rights to a safe and healthy environment conducive 

to subsistence. The REDOIL network consists of grassroots Alaska Natives of the 

Inupiat, Yupik, Aleut, Tlingit, Gwich’in, Eyak and Denaiana Athabascan tribes. 

This Alaska-based network aims to address the human and ecological health impacts brought on by the unsustainable development practices of the fossil fuel industry. REDOIL strongly supports self-determination rights of tribes in Alaska, as well 

as a just transition from fossil fuel development to sustainable economies, and promotes the implementation of sustainable development on or near Alaska Native 

lands. REDOIL is part of the Indigenous Environmental Network. One of the most 

important guiding principles for REDOIL is: 


36476.034.eps
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‘‘We are committed to a moratorium on all new exploration for oil, gas and coal 

as a first step toward the full phase-out of fossil fuels with a just transition to sustainable jobs, energy and environment. We take this position based on our concern 

over the disproportionate social cultural, spiritual, environmental, and climate impacts on Indigenous Peoples, particularly in Alaska.

The Alaska OCS:

The Alaskan OCS provides an abundance of marine life, and is adjacent to some 

important terrestrial public resources in the United States. Alaska Native coastal 

communities have depended on marine subsistence resources since time immemorial. The Beaufort Sea, Chukchi Sea, Arctic Ocean, Bristol Bay, Cook Inlet and other 

offshore areas are critical to Alaska Natives subsistence. REDOIL is deeply concerned with the risks posed to sensitive marine and coastal environments from oil 

and gas activities in the Alaskan OCS. Vital subsistence resources that are intrinsic 

to the livelihood of coastal Alaska Native communities within the entire OCS area 

are at risk. Due to the serious risk posed to these ecological areas and the communities that are within these areas or in close proximity who rely upon coastal resources, REDOIL strongly recommends the entire Alaska OCS be excluded from the 

2007-2012 leasing program.

ANCSA, Oil and Alaska Native Subsistence:

Since time immemorial, the title to land in Alaska belonged to the Indigenous 

Peoples of Alaska. Various acts of congress and laws put into effect a chain of pilfering of Native lands in Alaska. Though the question of title to land was not settled, on June 20, 1867 The Treaty of Cessions proclaimed Alaska as part of the 

United States after the U.S. bought Alaska from the Russians, for the sum of 2 

cents an acre. When Alaska became the 49th State in 1959, there were approximately 85,000 Alaska Natives throughout Alaska. The Prudhoe Bay oil field was 

discovered in 1968. The discovery of oil in Prudhoe Bay established an alliance of 

the federal government and multi-national oil companies to promote their combined 

interests. This alliance provoked an urgency to settle the land claims in Alaska to 

provide for a right of way for the 800 mile Trans-Alaska pipeline to access the resources on the North Slope and to bring it to market. The Alaska Native Claims 

Settlement Act (ANCSA) was then enacted in 1971 by Congress. ANCSA was passed 

without a vote of Alaska’s original inhabitants or the American public. ANCSA 

extinguished all aboriginal land claims in Alaska. Alaska Natives retained only 44 

million acres of land (approximately 11% of 380 million acres) and $962 million 

dollars. ANCSA created for profit Native regional and village corporations and also 

conveyed ancestral lands to the Native corporations instead of existing Tribal governments. Now, Alaska Natives have ownership to shares in ANCSA corporations 

that hold land title. Many ANCSA Native corporate entities now are in alliance or 

agreement with large multi-national companies. Thus, Alaska Natives are constantly defending their ancestral homelands from the onslaught of unsustainable 

economic development projects within their territories. 

Though Federal Policy of the U.S. set up Alaska Natives to assimilate themselves 

to the western value system of ‘‘profit at all cost’’ many Alaska Natives still maintain their cultural values and continue to maintain and practice a subsistence lifestyle. There is a growing number of Alaska Natives that view ANCSA as an illegitimate act that was designed to undermine Self-Determination and Sovereignty of 

Alaska Native Tribes. Many Alaska Natives would rather live in concert with the 

land and resources and not dominate over the natural world with the purpose of 

profit. ANCSA created a system to access the resources, assimilate Alaska Natives, 

divide and conquer to proceed with unsustainable economic development initiatives 

that further erode subsistence rights as the land is assaulted. Alaska Native traditional territories within the State of Alaska are now at threat by corporate multinational interests. Unfortunately ANCSA created the situation where our own Native corporations are aligned with the oil companies and other multi national interests as well, and thus this is the legacy of ANCSA-massive destruction of our homelands. 

Alaska Natives are seeking protection for the last areas that are still intact and 

pristine, that continue to provide for essential physical, cultural, spiritual, social 

and economic means for the Indigenous Peoples of Alaska. The proposed new 5-year 

OCS Oil and Gas Leasing Program for 2007-2012 is a threat that will have profound 

and devastating effects on the Indigenous Peoples of Alaska that rely on the oceans 

to provide for their subsistence needs. 

Indigenous Peoples have always viewed human rights and a healthy environment 

as fundamentally linked. The careful management and protection of the Arctic environment is a requirement for the enjoyment of Alaska Native human rights, particularly as they relate to the ‘‘subsistence’’ or ‘‘traditional’’ economy. Indigenous Peoples 

77

of Alaska have long fought for recognition of subsistence rights as a basic inherent 

fundamental human right. 

Existing international law already protects subsistence rights. This right is recognized and affirmed by civilized nations in the international covenants on human 

rights. Article I of both the International Covenant on Civil and Political Rights, 

and the International Covenant on Economic, Social and Cultural Rights read in 

part: 

‘‘...In no case may a people be deprived of its own means of subsistence.’’

Alaska Native communities are constantly working toward basic survival. The 

term ‘‘subsistence’’ may not mean much to citizens of the United States, but to 

Alaska Natives the term ‘‘subsistence’’ is about their rights, livelihood and survival. 

Native communities are largely remote and usually only accessible by small plane. 

Some communities that are located along river ways may be accessed by boat in the 

summer. Few communities are located on the highway system. There are not large 

grocery stores in communities, and the cost of freight nowadays is so high, Alaska 

Natives are better off living the subsistence livelihood; it alleviates a financial burden on families as well. For communities, subsistence is more than hunting and 

fishing. It is their very life, it is their existence. One can easily say that without 

subsistence, Alaska Natives will not exist. The reality is; this is the hard truth.

Traditional Ecological Knowledge:

Alaska Natives from coastal communities have serious concerns for their marine 

environment. They eloquently address their concerns about present oil and gas development and proposed future development: 

‘‘The concerns relating to the adverse effects of an air burst of 190 decibels 

were not answered. It has never been demonstrated that oil can be cleaned 

up in the Arctic Ocean. Since then, I have learned a disturbing fact, it appears that spills would not require extreme measures to be cleaned up. 

Demonstrations have shown that oil cannot be successfully cleaned up in 

the Arctic Ocean. If a spill were to happen, clean up would only be required 

at demonstrated ability of existing technology. This I believe is a very serious problem. The demonstrated ability of clean up is not of an acceptable 

quality. The accumulative effects relating to oil development are not considered, if the offshore projects are allowed, what adverse effects will be created getting the product to market? The public should know that the offshore development is directly related to onshore areas being made available 

for exploitation, i.e. development of the 1002 area of the Arctic National 

Wildlife Refuge.’’ —ROBERT THOMPSON, KAKTOVIK

‘‘The ocean can provide for many communities and families but oil only 

gives a temporary paycheck that may not be there next year and eventually 

will require our natural resource, the people, to be away when teaching and 

communication is being missed by the young.’’

—ROSEMARY AHTUANGURUAK, NUIQSUT

‘‘During the MMS scoping meeting we expressed our opposition and asked 

questions on when seismic studies were done by dates, they did not know. 

We stated that we were unaware of the five wells that were drilled in 1989-

91 and noticed seals sinking during winter (loss of fish) and a few whales 

washed up on the beach between 1980-89, possibly from seismic work that 

took place at that time. We stated we had passed a resolution opposing oil 

& gas development offshore. They did not bring a recorder. ConocoPhillips 

came a couple of weeks later where we reiterated our concerns expressed 

at the MMS scoping meeting. We also stated we learned that there were 

no nationally accepted seismic study reports completed on the effects of 

seismic work on fish and marine mammals. Other published reports of 

harm was referred to during the meeting, such as a reduction in fish caught 

by 30-70% to the lack of studies on baleen whale .We request that no permits be issued until there is a nationally accepted report completed that 

proves there are no adverse effects of seismic work on fish and marine 

mammals. We feel that there is nothing that can replace our food from our 

sea.’’ —JACK SCHEAFER, POINT HOPE

‘‘The Beluga in the Cook Inlet are under the probability of becoming extinct. We do not know what will be impacted next. To open offshore leasing 

on the Outer Continental Shelf would further endanger the Beluga, in part 

because of seismic testing and because of additional environmental damage 

including Global Warming. The National Marine Fisheries is not enforcing 

the Marine Mammals Protection Act and has been unable to protect the 

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marine mammals. Contracting with the Tribes in Cook Inlet to protect the 

mammals may be more effective.’’ —MARY ANN MILLS, KENAITZE

‘‘In Bristol Bay we were confronted by oil companies that bid on the leases 

in the original lease sale 92 in the 80’s, so we brought this issue up before 

our Tribal Councils because we always felt this would adversely affect our 

entire lifestyle. Our subsistence resources would be completely depleted. 

Any disruption in the flow of subsistence lifestyle would negatively impact 

us as traditional users. Through long term use and occupancy, we understand this ecosystem better than most. All five species of salmon are the 

mainstay of the economy of our communities. Within the last thirty years, 

the herring fishery became a big business, along with the halibut and king 

crab. Along the Alaska peninsula is an area called ‘‘cod alley’’ that is used 

by CDQ’s (community development quotas) this area also supports Pollock, 

so the whole area will be impacted. We are also concerned for surface and 

subsurface clams and crabs. There is concern for the whales, their sensors 

are so delicate. Seismic testing will devastate them, which has been proven 

to harm their sense of direction. We depend on migrating birds as well—

Muir, geese, and seagull eggs are also an important subsistence resource 

in the springtime. Oil and exploration would devastate our subsistence lifestyle. Any spill of any magnitude would destroy our way of life. The North 

Aleutian basin is our store. Anything that jeopardizes the purity of this 

area would detrimentally impact us.’’ —NORMAN ANDERSON, NAKNEK

Science: 

National Academy of Sciences 2003

Cumulative Environmental Effects of Oil and gas Development on Alaska’s North 

Slope ‘‘Effects on the Human Environment’’

Offshore, Subsistence and Human Health Impacts: 

‘‘Alterations to the North Slope physical environment have had aesthetic, cultural, 

and spiritual effects on human populations.’’ (p.222) 

‘‘The committee heard repeatedly from North Slope Inupiat residents that the imposition of a huge industrial complex on the Arctic landscape was offensive to the 

people and an affront to the spirit of the land.’’ (p.223) 

‘‘Hunting the bowhead [whale] has been the Inupiaq cultural anchor as change 

has come to the North Slope. The ongoing, accumulating effects posed by offshore 

development, in the form of perceived threats, would be diminished only by clear 

evidence that the technology exists to mitigate large oil spill in broken ice. There 

is no evidence to date that such cleanups are possible...the size of bowheads makes 

them an extremely important food source.’’ (p. 135) 

‘‘Alaska Native residents told the committee that there are subtle changes in species harvested by subsistence hunters, who have identified changes in the color, texture, and taste of the flesh and skin of several species. (p. 136) 

‘‘North Slope residents also reported that traditional subsistence hunting areas 

have been reduced, the behavior and migratory patterns of key subsistence species 

have changed, and that there is increased incidence of cancer and diabetes and disruption of traditional social systems.’’ (p.139) 

‘‘In addition to stress contributing to adverse health effects, oil development has 

increased the smog and haze near some villages, which residents believe is causing 

an increase in asthma. The stress of integrating a new way of life with generations 

of traditional teachings has increased alcoholism, drug abuse, and child abuse. 

Higher consumption of non-subsistence food...has increased the incidence of 

diabetes.’’ (p. 225)

The Outer Continental Shelf:

Each of Alaska’s OCS regions contains important natural subsistence resources 

that would be threatened by oil and gas development. Subsistence use of fish and 

other marine animals is both an established economy of Native coastal communities 

and is absolutely central to the survival of Alaska’s indigenous cultures. The nation’s most productive and richest fishing grounds are found in Alaska, and the 

economies of coastal communities along the Gulf of Alaska, Cook Inlet, the Bering 

Sea, and the Beaufort and Chukchi Seas rely on commercial and subsistence fishing. 

Statewide, the fishing industry provides more private sector jobs than any other 

source. Unlike oil and gas resources, the marine resources of the Alaska OCS can 

last indefinitely, and should therefore not be jeopardized by non-renewable resource 

development. 

Beaufort Sea: The Arctic Ocean’s Beaufort Sea is the primary marine subsistence use area for the Inupiat of the North Slope. The Beaufort provides critical 

79

habitat for polar bears, walruses, seals, migratory birds, threatened spectacled and 

Steller’s eiders and the endangered bowhead whale. In this vulnerable and harsh 

environment, spilled oil will concentrate in restricted open water such as the leads 

and breathing holes where marine mammals surface and birds congregate, and 

along the sensitive coasts. The Arctic National Wildlife Refuge, with its incomparable wildlife and wilderness, adjoins the eastern portion of the Beaufort Sea in 

the United States. Critical bowhead whale spring migratory pathways in the lead 

zone are located east of Barrow, and fall migratory and feeding habitats are located 

offshore of the Arctic National Wildlife Refuge. 

The National Petroleum Reserve-Alaska lines much of the Beaufort Sea coast, an 

area of international environmental significance. This is an important area as a key 

subsistence use area. This region, especially the area north of Teshekpuk Lake, is 

particularly important to a number of bird species. For example, it includes a high 

percentage of the Alaskan breeding population of yellow-billed loons, is the center 

of the breeding distribution for Steller’s eiders, and contains high concentrations of 

spectacled eider nests. The area also includes high breeding densities and highly 

populated colonies of black brants. The wetlands also provide seasonal habitat for 

many other species of waterfowl and shorebirds and for other fauna. The Dease 

Inlet and Smith Bay region is important to mammals, as well. For example, the offshore area contains the feeding area for bowhead whales during their fall migration 

and the late summer use area for beluga whales. Onshore, it provides the most consistently used wintering area for the Teshekpuk Lake Caribou Herd, and is part of 

the outer range of the Western Arctic Caribou Herd. 

These primary subsistence use areas are sensitive to disturbances caused by industrial activities and infrastructure as well as oil spills, and should therefore be 

excluded from development the next OCS 5-year plan. 

Coast of the Arctic National Wildlife Refuge: Offshore lease sales jeopardize 

the integrity of the wildlife and coastal habitats of the Arctic National Wildlife Refuge as well as the marine ecosystem itself upon which subsistence activities depend. 

Development off the coast of the Arctic Refuge poses risks to the Porcupine Caribou 

Herd, bowhead whales, fish, and migratory birds using the Arctic Refuge coastline, 

lagoons, and barrier islands. Internationally important polar bear habitats are at 

risk, both within the refuge and off its coast. Protection of polar bears and their 

habitats is a specified purpose of the Arctic Refuge. The Arctic Refuge provides the 

most important onshore denning habitat for polar bears in the U.S. Offshore exploration and development would cause pollution, aircraft and vessel noise and related 

industrial activity, and potential oil spills would degrade the Refuge and threaten 

the integrity of this protected conservation unit, even if there were no construction 

of infrastructure within its boundaries. In the future, there would be intense pressure to construct sprawling onshore airports, pipelines, roads, docks, and other support facilities in the Refuge. The Gwich’in Nation of Northeast Alaska and Northwest Canada have longstanding opposition to oil development within the coastal 

plain of the Arctic National Wildlife Refuge, a growing number of Inupiat within 

the community of Kaktovik are opposed to oil development in the Arctic Refuge as 

well. The coastal plain of the Arctic National Wildlife Refuge represents the last 5% 

of coastal lands still protected, 95% of Alaska’s coastal lands are open to development already. 

The Beaufort Sea Lease Sale 170 set a precedent of not leasing areas off the coast 

of the Arctic Refuge. MMS deferred the entire area, noting lack of information on 

cumulative impacts to the Refuge from development, insufficient information on 

emergency response plans, and the inability to make direct landfall with a sub-sea 

production pipeline. MMS also noted concerns related to bowhead whales and the 

potential for this area to be an important area for feeding during fall migration. 

These issues remain major concerns of the public. Therefore, at a minimum, we request that the entire OCS north of the Arctic National Wildlife Refuge (from its 

western boundary at the Staines/ Canning River to the Canadian border) be completely removed from any further consideration in the 5-year plan as the environmental risks are unavoidably too high in this sensitive area. 

Chukchi Sea: The Chukchi Sea is an important primary subsistence use area for 

Inupiat that live in coastal communities. Oil leasing in Arctic waters of the Chukchi 

Sea/Hope Basin threatens critical spring migration route for bowhead and beluga 

whales, important feeding areas for gray whales and Pacific walruses, staging and 

molting areas for migratory birds, polar bear and walrus habitats including in Russian waters, and Cape Krusenstern National Preserve. An offshore spill, as well as 

routine development, also risks harming Kasegaluk Lagoon, a significant beluga 

whale calving and migratory bird staging area. The Chukchi Sea and Hope Basin 

should therefore be excluded from development in the 5-year plan. 

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Northern Aleutian Basin: The North Aleutian Basin is valuable to the local 

communities for its abundant subsistence resources that sustain traditional cultures 

and ways of life. The North Aleutian Basin is protected, and will continue to be protected, by the Executive OCS Deferrals through 2012, and these sensitive waters 

thus cannot be included in the Five-Year OCS Program for 2007-2012. The North 

Aleutian Basin (Bristol Bay) is one of the most productive areas of the U.S. OCS. 

Several endangered species depend on these waters including the northern right 

whale whose critical habitat is likely to be designated within or directly adjacent 

to the area of highest industry interest. The region is ringed by unparalleled estuaries critical to the region’s ecological productivity and the lease sale area overlaps 

with fisheries of national significance including pollock, cod, red king crab, herring 

and the world’s largest salmon run. Bristol Bay fisheries are the base of the economy and livelihood for residents of the region. Bristol Bay is extremely sensitive to 

potential seismic testing, oil spills, and chronic pollutants from offshore drilling operations associated with both oil and natural gas development. 

Cook Inlet: The Cook Inlet provides critical habitat for key subsistence species 

that the local Indigenous Native peoples rely upon. The Beluga Whale is now on 

the brink of extinction and Alaska Natives in the region feel that this is due to seismic disturbance among other factors. Oil companies operating offshore oil rigs in 

Alaska’s Cook Inlet are exempt from U.S. laws against dumping toxic oil, grease, 

and wastewater directly into coastal waters. The Cook Inlet is the only offshore 

drilling area in the U.S. where platforms are allowed to dump oil and grease directly into the water. Beyond Toxic dumping, oil development in Cook Inlet poses 

oil spill and other risks to rich fisheries, declining populations of sea otters, depleted 

population of beluga whales, and critical habitat for endangered Steller sea lions, 

as well as the coastlines of Chugach National Forest, Lake Clark and Katmai National Park and Preserves, and the Becharoff, Alaska Peninsula, Kenai, and Alaska 

Maritime National Wildlife Refuges. Oil and gas infrastructure, along with its associated tanker traffic and pollution, are incompatible with the uses and plans established for many of these important areas and with the fisheries-based economies of 

the region. Additionally, the region’s earthquake-prone nature and harsh operating 

conditions including extreme winds and tides make the likelihood of spills higher 

in this region than other OCS areas. 

Numerous communities of the Lower Kenai Peninsula and on Kodiak Island base 

their economies and way of life on the sensitive marine systems of Lower Cook Inlet 

and Shelikof Strait, and any damage to these systems will have major impacts on 

these communities. Cook Inlet should not be included in the 2007-2012 program.

Offshore Development endangers marine ecosystem:

Oil and gas activities endanger the fragile marine environment off the coast of 

Alaska. Productive marine ecosystems, marine mammals, sea birds, and coastal 

communities are all at risk from potential blowouts and pipeline oil spills. The risks 

from unprecedented new technology of buried sub-sea oil and gas pipelines raise 

major questions about development throughout Alaskan OCS waters. We are also 

concerned about the chronic effects from smaller spills of dozens of toxic substances 

typical of North Slope oil field operations (not just spills of crude oil or spills greater 

than 100 bbl) and from disposal of drilling muds and cuttings in the ocean during 

exploratory drilling. Even small amounts of oil can negatively affect marine life. Oil 

pollution increases susceptibility to diseases in fish, inhibits phytoplankton productivity, and interferes with reproduction, development, growth, and behavior of many 

species throughout the food chain. Additionally, marine life is threatened by noise 

pollution generated by air and vessel traffic, drilling, platform work and seismic 

testing, the construction of causeways and docks, and the laying of miles of pipelines 

in or on the seafloor. 

All of these activities pose unacceptable threats to subsistence use areas, protected areas, fisheries and wildlife, and endangered and threatened species and they 

would dramatically put Alaskan Native subsistence based communities along 

Alaska’s coast in peril. Furthermore, oil produced in the Alaska OCS would be 

transported via oil tankers that pose risks not only to Alaska’s coastal resources, 

but also to those in the lower 48.

Global Warming:

In 2001 at the request of the Administration, the National Academy of Sciences 

reviewed and declared global warming a real problem caused in part by human activities. 

The burning of coal, oil and gas and cutting down forests cause global climate 

change by releasing greenhouse gases into the atmosphere. This is causing global 

temperatures to rise as excessive amounts of greenhouse gases accumulate in the 

81

atmosphere. There are many noticeable impacts of Global Warming which is affecting the land, subsistence, health and well being of Indigenous peoples of Alaska. 

MMS should consider all the new information on the presence, rate and impacts 

of global warming. In particular, MMS should consider the technical feasibility of 

construction and maintenance of pipelines, as well as the economic feasibility and 

means of reducing risks associated with these pipelines from the effects of shoreline 

erosion, permafrost, and ice gouging. MMS should also consider impacts on the Arctic ecosystem of global climate change taken together with the impacts from oil and 

gas exploration and development.

Other factors and recommendations:

Since the last 5-year planning process, new information about marine noise, cumulative impacts, the inability to clean up spilled oil in broken ice conditions, and 

traditional knowledge demands that the entire Alaska OCS should be excluded from 

development in the 5-year plan. 

Recent studies indicate seismic activities related to oil and gas exploration can 

have substantial impacts on fish. MMS should not avoid an analysis of impacts to 

fish merely because seismic activity is permitted before leases are issued. Energy 

legislation signed into law earlier this year sets the stage for a geologic ‘‘inventory’’ 

of potential drilling targets on the entire American OCS, including areas within sensitive coastal waters long protected by the bipartisan congressional OCS Moratorium and by the Executive OCS Deferrals first enacted by former president George 

H.W. Bush in 1991. No permits or contracts for seismic air gun ‘‘inventory’’ activities should be issued by the Department of Interior in any area prior to the completion and consideration of the now-pending National Academy of Sciences study on 

the impacts of sound in the marine environment, the evaluation of the new National 

Science Foundation study on the impacts of geophysical activities in scientific research, and the consideration of all recent peer-reviewed international studies on 

damage to fisheries and marine mammals caused by air gun impacts. A comprehensive National Environmental Policy Act (NEPA) process, with a full EIS and requisite public review, must be completed prior to the issuance of any permit or regulations pursuant to the proposed seismic ‘‘inventory’’ of the OCS or the 5-year leasing program. 

During the preparation of the 5-year program, MMS should also consider information about the difficulties faced by the oil industry in cleaning up oil spills during 

seasonal ice conditions. Across the arctic, fierce climatic conditions, high winds and 

seas, sea ice, and cold temperatures challenge offshore technologies and spill cleanup far beyond present capabilities. Recent oil-spill drills by oil companies and contractors have confirmed their inability to respond effectively to a spill in broken ice 

and open water conditions that prevail for most of the year in the Beaufort and 

Chukchi Seas, Hope Basin, Norton Sound and Cook Inlet. The Exxon Valdez oil spill 

of 1989 taught Alaskans and the world harsh lessons about the ability to clean up 

a significant oil spill. Scientific studies of the Exxon Valdez oil spill show long-lasting and significant damage to fish, wildlife, and subsistence cultures. MMS must 

paint a much more realistic picture of the impacts of oil spills so that the public 

can accurately judge the risks associated with oil leasing, exploration, and development. 

MMS should also consider the cumulative impacts in designating the next 5-year 

planning areas. Cumulative impacts are occurring from the many chronic impacts 

of ‘‘routine’’ oil and gas operations, and could seriously impact the productivity of 

coastal ecosystems. MMS should assess the cumulative impacts from various 

sources, such as increased turbidity, underwater noise, drilling mud/cuttings discharges, produced water discharges, habitat alteration, seabed pipelines and rigs 

and vessels, infrastructure, fresh water use for ice roads, seismic activities, minor 

spills and leaks, and air and marine vessel traffic. 

MMS should consider more carefully the traditional knowledge of the Inupiat concerning the dangers of broken ice, the changing climatic conditions, and the habits 

of the fish and wildlife of the Arctic Ocean. Too often, MMS states a piece of traditional wisdom and then concludes the opposite, without sufficient support to justify 

disregarding the Inupiat people’s 4000 years of experience.

Renewable Energy:

The U.S. must break its dependence on oil—be it foreign or domestic—if we are 

to achieve true energy independence and national security. Limiting leasing and development in the 5-year plan could have an even more profound impact on this 

country’s energy landscape if coupled with a re-direction of billions of dollars in federal subsidies, tax breaks and incentives away from fossil fuels and toward renewable energy sources, energy efficiency and conservation. 

82

The United States generates about 25 percent of world petroleum demand. This 

fact alone indicates that Americans can have a much larger impact on global markets on the demand side than on the supply side. This conclusion is strengthened 

by the fact that there are large untapped energy efficiency resources, yet the United 

States government continues to focus almost exclusively on exploiting non-renewable oil and gas resources. 

Energy efficiency alternatives to opening up these sensitive areas are numerous. 

Using available technology, we could save an average of 3.2 million barrels of oil 

per day within 10 years. This could be achieved by raising the fuel efficiency in new 

passenger vehicles, using fuel-efficient motor oil and replacement tires, improving 

efficiency standards in heavy-duty trucks, and encouraging growth of the biofuels 

industry, among other things. Through efficiency gains and fuel alternatives, U.S. 

oil consumption could be reduced almost 40 percent by 2025. 

At a minimum, to avoid precluding renewable energy development in Alaska, 

MMS should not permit oil and gas activities in areas suitable for wind development. Areas offshore that contain the highest wind potential should not be developed for oil and gas. MMS should not hinder generation of renewable energy by displacing it with oil and gas development.

Conclusion:

The Five-Year OCS Leasing Program should not incorporate so-called ‘‘naturalgas-only’’ leasing. Exploration and development of gas resources produces routine 

discharges of spent drilling muds, produced waters, and highly-toxic metals and hydrocarbon compounds into the marine environment, in addition to creating a demand for onshore gas processing facilities in sensitive portions of the coastal zone. 

Further, legislative proposals for ‘‘gas-only’’ drilling have, to date, inappropriately 

incorporated provisions for the subsequent development of oil, should it be found in 

conjunction with gas on a ‘‘gas-only’’ OCS lease. Thus, ‘‘gas-only’’ leasing simply 

opens the door for oil drilling, with its attendant risk of oil spills. 

If MMS decides to include parts of Alaska in the next 5-year plan, MMS should 

include in the plan a commitment to prepare a separate EIS for each of the lease 

sales to address the problem of the huge scope of the area at stake and the difficulty 

of preparing an adequately site-specific assessment of impacts for such large regions. 

Due to the high probability of subsistence loss and harm to the Alaska Native 

coastal communities, we strongly urge that as part of OCS site specific EIS, incorporating Environmental Justice concerns in the NEPA analysis, for example, the 

consequences and loss to subsistence is studied as well as the ensuing factors of irreparable harm to human and ecological health such as, the high rate of asthma, 

cancer, upper respiratory illnesses, and diabetes, and the social ills that follow oil 

and gas development. The social factors and disproportionately high and adverse effects and cumulative and indirect effects that ought to be part of a study of oil and 

gas development on subsistence communities is the rising rate of alcoholism, suicide, domestic abuse, incarceration and drug abuse. In the National Academy of 

Sciences 2003 Cumulative Environmental Effects of Oil and Gas Development on 

Alaska’s North Slope ‘‘Effects on the Human Environment’’ report, many of these 

statistics are documented. If all the environmental, subsistence and socio-economic 

consequences of OCS oil and gas leasing and development are studied and factored 

thoroughly, they would show that the cost of oil and gas development within Alaska 

Native coastal communities far outweigh the benefits and the damage is 

intergenerational and long-term, while oil and gas development is short term. 

In accordance with NEPA, the EIS should discuss, in a transparent manner, opposing scientific viewpoints and rely on peer-reviewed information, comply with all 

applicable Executive Orders, examine the affect on all species and ecosystems, explain clearly how MMS conclusions are reached, and include easy to understand 

written and visual information about the risk of oil spills over time. 

To meet its ESA obligations, MMS should formally consult with the Fish and 

Wildlife Service on the 5-year plan, since Alaska is home to numerous listed species, 

including Steller’s and spectacled eiders, the Northern Sea Otter, Steller’s sea-lions, 

and the bowhead, finback, and humpback whales. Additionally, MMS should formally consult with the Fish and Wildlife Service before each lease sale offered under 

the 5-year plan. In doing so, this process will also allow MMS to comply with the 

MMPA as well. 

Alaska’s seas are too productive and sensitive to allow OCS oil and gas development. Alaska’s seas and coasts are by far the most biologically productive and sensitive of any in the entire nation, and among the most productive in the world. 

Alaska has the most abundant populations of fish, shellfish, marine mammals, and 

seabirds in the nation. Alaska’s seas are economically important, sustaining over 

100,000 jobs. Alaska is the only state in the nation where large portions of coastal 

83

residents depend on marine resources for subsistence. The fierce climatic conditions, 

high winds and seas, sea ice, and cold temperatures challenge offshore technologies 

far beyond their capabilities at present. These conditions make ecosystems more 

vulnerable and less resilient to disturbance and perturbations. Because of the inhospitable climate, challenging spill response and extreme productivity/sensitivity of 

the marine ecosystems off Alaska, this is an inappropriate area for OCS exploration 

and development. 

REDOIL strongly urges Alaska’s entire OCS areas be removed from the five year 

plan, before any more activity ensues within these fragile ocean ecosystems and We 

further urge that Alaska OCS region be put off-limits to any oil and gas development (including exploration) in the OCS 5-Year Plan for 2007-2012. Exclusion of 

Alaska’s OCS from oil and gas development is the only option that will guarantee 

the preservation of Alaska’s diverse marine ecosystems, as well as the subsistence 

cultures and local economies that rely on those ecosystems. 

Lastly and most importantly, REDOIL would also like to go on record supporting 

the testimony submitted by the Native Village of Point Hope, specifically the following points: 

Though REDOIL, and Alaska Native Coastal communities, including Federally 

Recognized tribes in Alaska have consistently objected to Alaska OCS development, 

we are simply being ignored within this process. This is unacceptable in the highest 

regards. 

In each hearing or public comment within Alaska Native coastal OCS impacted 

communities, there has been serious breaches of fiduciary trust responsibility. For 

instance, the consultations that have taken place within communities on the North 

Slope have been done with weighing only the interests of state created entities, and 

non profits, and the Federally recognized tribes are ignored. Community leaders 

were told by the oil companies that they only deal and work with the Alaska Eskimo 

Whaling Commission (AEWC) per direction given from the Minerals Management 

Service. Any sort of consultation should be done with the tribal governments and 

not with non-profit organizations (such as AEWC) that truly do not represent the 

view of the tribes. Therefore, we request that the Office of the Inspector General 

do a complete investigation on the MMS and its cooperating agencies for enforcement purposes along with correcting the inadequacies of these agencies. 

Coastal communities put in detriment by proposed Outer Continental Shelf development have consistently and strongly expressed opposition to any seismic activity 

and any other activity that relates to oil, gas and exploration and development to 

protect subsistence resources. On February 23rd, 2005 the Native Village of Point 

Hope passed Resolution 05-06 to ‘‘Strongly Oppose the Development of Oil and Gas 

in the 1002 area of the ANWR and Offshore Waters of the Arctic Ocean, Chukchi 

Sea, and Beaufort Sea’’. 

Seismic surveys have significant and potential harm to marine life, including fish 

and endangered whales. By allowing future seismic surveys to continue in the 

Chukchi and Beaufort seas, there can be and have been severe impacts to fish, marine life and the Native Villages within the region. 

In Point Hope, last year when seismic surveys started the walrus scattered 

straight to Russia bypassing Point Hope altogether preventing the community from 

harvesting any walrus last fall. There have been reports by some community members that cite dead fish and other marine life on the beaches there shortly after and 

during the seismic surveys last fall. We once again reiterate that Traditional Ecological Knowledge of the community members within the OCS communities must be 

given just as much weight in these matters as western science, and it is very obvious through testimony from Point Hope that seismic activities have severely harmed 

subsistence resources within the Chukchi Sea. 

As marine science and the courts have increasingly recognized, intense underwater sound can have a range of delirious effects on marine mammals and other 

marine life. e.g., National Parks and Conservation Association v. Babbitt, 241 F.3d 

722 (9th Cir. 2001); NRDC v. 279 F. Supp. 2nd 1129 (N.D. Cal. 2003). Inupiat communities strongly advise that the offshore oil and gas activities also has dramatic 

and irreparable effects on marine life. 

The displacement and possible irreparable harm though declines in the availability and viability of prey species, such as fish and food that whales depend will 

be reduced dramatically causing undue hardship for communities. The Incidental 

Harassment authorizations that were issued last year should not have been made 

for the reasons stated above along with the ongoing litigation concerning how they 

were approved 

Finally, REDOIL supports the Alaska Native communities opposition and zero tolerance on any oil and gas activities that will threaten their renewable resources. 

Oil and gas activities offshore pose an imminent threat to their continued existence 

84

and subsistence way of life, and therefore we call for an immediate cease of all activity toward OCS development.

Sincerely,

Faith Gemmill, Outreach Coordinator 

Resisting Environmental Destruction on Indigenous Lands 

[A letter submitted for the record by the Bristol Bay Native 

Association, Bering Sea Fishermen’s Association, Bristol Bay 

Economic Development Corporation, et al., follows:]


36476.011.eps
85

[A statement submitted for the record by Marvin Odum, 

Executive Vice President, EP Americas, Shell Energy Resources 

Company, follows:]


36476.012.eps
86

Statement submitted for the record by Marvin Odum,

Executive Vice President, EP Americas, Shell Energy Resources Company 

Mr. Chairman and members of the subcommittee, 

Thank you for the opportunity to submit testimony before the Committee on this 

important hearing regarding the future of the Federal offshore oil and gas program. 

On April 30, the Department of the Interior released its Proposed Final 2007—2012 

Program for Oil and Gas Leasing on the Outer Continental Shelf. While we believe 

the plan falls short of what is needed for this nation to secure its energy future, 

we are pleased that additional acreage has been included. 

The nation can only hope to meet its future energy needs by exploring and developing new domestic energy resources, encouraging conservation and efficiency, and 

developing alternative energy sources. To accomplish this we need access to new 

areas. 

But, exploring and developing new areas of oil and natural gas takes a long 

time—years, in fact—which is why it is essential for us to act now. This is especially 

true for frontier areas. Recent discoveries in deepwater Gulf of Mexico reflect decisions on leasing and exploration taken over a decade ago. If a lease sale were to 

take place today in a new area, the region would not likely be ready to deliver oil 

and natural gas to market for 10 years or more. 

The devastating impact to Gulf of Mexico (GOM) energy operations by the 2005 

hurricanes, declining production from mature domestic fields, growing global demand, and rising energy prices have captured the attention of the American public 

and policy decision makers. 

The nation now has the opportunity to engage in real dialogue about our energy 

future, and the critical need to explore for domestic offshore resources and many 

people are making their voices heard. During the three comment periods associated 

with the development of the Proposed Final Plan that sits before us today—75 percent of the comments gathered in the Final Comment Period support access to new 

offshore areas. 

The Proposed Final Plan consists of 21 lease sales—12 in the Gulf of Mexico, eight 

offshore Alaska and one in the Atlantic. Shell is pleased to see that sales in the plan 

are proposed for new acreage in three areas: the Central and Eastern Gulf of Mexico 

Planning Areas; the North Aleutian Basin offshore Alaska, and the Mid-Atlantic 

Planning Area offshore Virginia. 

MMS estimates that by including these new areas, production gains of 10 billion 

barrels of oil and 45 trillion cubic feet of natural gas over 40 years are possible, and 

the benefit to the nation would total about $170 billion. But the bottom line is that 

we will not know for sure how much natural gas or oil exists in any new area until 

exploration activities begin. 

Much of the focus of today’s hearing is on the inclusion of the North Aleutian 

Basin in the MMS Five Year Plan. Shell believes that prior to entering a new area 

it is absolutely essential to hold extensive engagements with all interested to stakeholders to discuss and address concerns and questions. We are already doing this 

in communities near the North Aleutian Basin, and we would welcome the opportunity to work with Congress, the Administration, the environmental community 

and all stakeholders to have a frank and honest discussion about offshore oil and 

gas activities in these communities and around the nation. 

The three boroughs nearest the proposed lease sale area have been supporters of 

taking steps needed to enable an offshore oil and natural gas program in the North 

Aleutian Basin. However, the support of the community and civic leaders in the region is contingent on the existence of proper mitigation measures and environmental safeguards. Shell supports such safeguards and believes that oil and gas development should only take place in the North Aleutian Basin after detailed studies 

are completed, with participation and review by third parties, to assess impacts of 

proposed activity on the region’s fisheries, culture and economy. 

MMS and NOAA just announced that they will conduct a $5 million, three-anda-half year collaborative study on the North Pacific right whale, whose habitat coincides with part of the area proposed for leasing. Shell is strongly supportive of this 

effort, and stands ready to work with any interested stakeholder to determine what 

other studies are needed. 

Shell fully supports expanded research and development of state-of-the-art oil 

spill response capabilities, including ocean monitoring. In fact, Shell has created one 

of the most comprehensive spill prevention and control plans ever developed for the 

Arctic environment. We also support extensive analyses on the probability of oil 

spills, current technologies available for oil spill prevention and response, and an 

assessment of the impact a spill could have on the region’s fisheries. 

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Shell believes that the success of the MMS Five Year Plan, with the inclusion of 

new areas, is critical to the future of U.S. domestic energy supply. We look forward 

to working with the federal government, states and local communities, environmental organizations and other stakeholders as we move forward in implementing 

the plan.

[A letter and resolution submitted for the record by Jack 

Schaefer, Vice President, Native Village of Point Hope, follows:]


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[The response to questions submitted for the record by Mr. 

Cruickshank follows:]

Response to questions submitted for the record by Walter Cruickshank 

Questions submitted by Chairman Jim Costa 

WHY DIDN’T MMS DO MORE?

1. Mr. Cruickshank, as I mentioned in my opening statement, I believe that 

your agency could have been much more visionary with this plan. Why 

didn’t you look more broadly than Virginia? 

Answer: Since 1982, Congress has included language in the Department’s annual 

appropriations bill preventing the expenditure of funds on pre-leasing activities in 

many of the Outer Continental Shelf (OCS) Planning areas. In addition to annual 

moratoria, on June 26, 1990, President George H. W. Bush withdrew numerous and 

extensive areas of the OCS under the authority of section 12(a) of the OCS Lands 

Act, as amended. President Bill Clinton, on June 12, 1998, extended and expanded 

the administrative withdrawal until 2012. The annual legislative moratoria coupled 

with the presidential withdrawal are a significant constraint to MMS proposing a 

more expanded program. An area offshore Virginia was considered this year in spite 

of these historic constraints, in part due to requests made by the Commonwealth 

of Virginia in comments received during development of the 5-Year Program. Additionally, the Virginia State Legislature’s passage of SB 262 included express 

changes to the state policies, laws and stated goals with respect to exploration and 

development of the OCS. The Department and MMS are open to talking and working with states that are interested in considering the environmentally sound development of the Federal OCS energy resources needed by our nation. 


36476.008.eps
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2. Does MMS ever conduct the type of analysis that you do here, the 

Section 18 analysis, in the absence of a specific plan for a lease sale? This 

analysis would be very helpful to help us decide if other regions should be 

opened for leasing or not. But if you have to wait until you propose a sale, 

we might never get that analysis. 

Answer: Section 18 mandates the Secretary to prepare and maintain an oil and 

gas leasing program that lays out a schedule for proposed lease sales over a 5-year 

period. The program must be based on consideration and analysis of principles and 

factors specified by Section 18. This Section 18 analysis considers such factors including, among others, geologic and geographic characteristics; location of national 

and regional energy markets; industry interest; environmental and other information; and laws, goals, and policies of affected states. Analysis of information relating 

to those principles and factors produces results that MMS uses to develop reasonable options as to size, timing, and location of potential lease sales, not for the individual lease sales that are included in an approved final 5-Year Oil and Gas Leasing 

Program. The Section 18 analysis recognizes the constraints of the legislative moratoria and the presidential withdrawal that in large measure reflect the interests of 

the coastal states, in the process of balancing the many factors in determining if 

other regions would be opened for leasing or not. To begin the 5-year preparation 

process under section 18 of the OCS Lands Act, in August 2005, MMS requested 

information on all 26 planning areas, without regard to whether the areas had been 

leased or were under restriction. As a result MMS did section 18 analyses on all 

26 planning areas as laid out in Part IV of the Draft Proposed Program (DPP), 

using all available information. Individual sale areas are analyzed in more detail 

prior to a proposed sale, including NEPA, CZMA, Endangered Species Act, Marine 

Mammal Protection Act compliance and consultation with Governors. However, this 

detailed analysis can only be done for proposed sale areas that have been included 

in the 5-Year Program. 

3. If you were to conduct a Section 18-type analysis for all the planning 

areas, how much time would that take and how much would it cost? 

Answer: To begin the 5-year preparation process under section 18 of the OCS 

Lands Act in August 2005, MMS requested information on all 26 planning areas, 

without regard to whether the areas had been leased or were under restriction. As 

a result MMS did section 18 analyses on all 26 planning areas as laid out in Part 

IV of the Draft Proposed Program (DPP), using all available information. In many 

areas, particularly where there had either been no leasing activity or it had been 

many years, there was little information or the information was very dated. After 

the publication of the DPP, MMS properly limited the analysis to areas actually 

being proposed for leasing. Therefore, MMS can and did do section 18 analysis of 

the entire OCS. However, the usefulness of the analysis is limited by the quality 

of the information available for many areas. Furthermore, MMS does not collect geological and geophysical information needed for resource evaluation itself but utilizes 

the information gathered by industry. As such data gathering does not generally 

occur without some commercial purpose, i.e. a potential lease sale, there is little or 

no information for areas that have not been offered ever or for many years. Similarly, MMS focuses its environmental research on areas where there may be activity; to ensure current information is available for decision-making.

WEATHER CONDITIONS IN THE BERING SEA

4. Mr. Cruickshank, I have heard some concern about the severe weather 

conditions in the Bristol Bay, but I have also been told that the conditions 

there are no different from the North Sea, which has extensive oil and gas 

production. Is that correct? Could you give us any additional detail on 

that? 

Answer: There are similarities. Oil and gas have been produced in the harsh conditions of the North Sea for more than 40 years. Norway, the UK, Denmark, Germany, and the Netherlands all produce oil and gas in the North Sea. Norway is the 

leading North Sea oil and gas producer, and is also the world’s leading offshore oil 

producer. Current Norwegian oil production is about 2.5 million barrels per day or 

about double U.S. OCS production. Meteorological and oceanographic conditions in 

the Norwegian sector of the North Sea are comparable to those in Bristol Bay and 

the North Atlantic offshore Canada (Sable Island and the Grand Banks), where oil 

and gas are also produced. As an example, one measure for comparing weather conditions in the North Sea and North Aleutian Basin (NAB) is wave height. This 

measure integrates wind, other factors associated with storms, enhancement of 

waves from tidal action and shallow depths (<100 meters), and is a measure of the 

severity of the ocean environment. In the North Sea the average wave height of 

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about 3 meters is exceeded for 10 percent of the time over the year. In the North 

Aleutian Basin the average wave height is about 3.2 meters, and it is exceeded for 

10 percent of the time over the year. Variations from these averages can be extreme 

in both areas and waves greater than 4 meters can predominate in winter months 

in both areas. Thus, on the basis of average wave heights and the similar frequency 

of exceeding the average wave height achieved in severe weather, it could be concluded that the two areas are very similar. Norway, a nation with a strong safety 

and environmental culture, has achieved an outstanding safety and pollution prevention record.

COEXISTENCE WITH FISHERIES

5. Mr. Cruickshank, I know one of the big concerns in some of these unopened areas is that there will be conflicts with the local fishing industry. 

But aren’t there locations throughout the world where fishing coexists 

with oil and gas development? Louisiana, for example, has the densest network of offshore oil and gas development in the country, yet it also has the 

second biggest commercial fishery in the country, right behind Alaska. 

Answer: Fishing activity, both commercial and recreational, often coexists with oil 

and gas development with minimal conflict. This has been demonstrated by years 

of experience in the Gulf of Mexico, particularly off the coasts of Louisiana and 

Texas. In fact, many fishermen actively seek out oil and gas structures as the fishing in the vicinity of these structures can be excellent. Fixed platforms offer excellent fishing for species such as snapper, grouper, and amberjack; floating production 

structures in deeper water offer excellent fishing for pelagic species such as tuna, 

wahoo, and marlin. Commercial landings in Louisiana and Texas are more than four 

times larger than before the onset of oil and gas development and represent over 

34% of the commercial fish landings in the continental U.S. Through appropriate 

NEPA process, and various other avenues of consultation and coordination, MMS 

has been able in the past to develop mitigating measures that are designed to address any space-use conflicts with the fishing industry and other ocean users when 

they occurred.

ACCESS TO GAS AND OIL IN THE CHUKCHI SEA

6. Mr. Cruickshank, the proposed final program states that the large 

quantities of gas in the Chukchi are effectively stranded because there’s no 

transport system. Is that because of a need for an Alaskan natural gas 

pipeline? 

Answer: All natural gas resources in Arctic Alaska, both on the North Slope and 

in the offshore Chukchi and Beaufort seas, are ‘‘stranded’’ because there is no gas 

transportation system to market. The commercial aspects of different transportation 

systems have been studied over the years including a gas pipeline to the Lower 48 

U.S. markets. However, there are other alternatives, including liquefied natural gas 

(LNG) shipments by sea. The Alaskan North Slope holds significant natural gas resources—about 35 trillion cubic feet of gas has been discovered and documented to 

date—with additional supplies likely elsewhere on the North Slope and Arctic OCS. 

Undiscovered Alaskan gas resources are expected to be huge—estimates of the total 

resource base in greater northern Alaska are 224 trillion cubic feet (Tcf) (onshore—

119.2 Tcf; Chukchi Sea—76.8 Tcf; Beaufort Sea— 27.6 Tcf). Currently, natural gas 

in northern Alaska is mostly re-injected to support oil production because there is 

no pipeline to deliver it to the lower-48 states. Developing the initial pipeline system 

from Alaska to major North American markets remains a challenging undertaking. 

Gas discoveries in the Chukchi could play a key role in supporting the construction 

of any gas delivery system from northern Alaska because it would extend the life 

and/or increase the capacity of the project, thus increasing the commercial viability 

of the project. 

7. Will the lease sales in this 5-year program have any effect on accelerating access to that gas? That is, if leasing of the Chukchi is delayed from 

the schedule in this proposal, will that push that 2025 date back at all? 

Answer: Yes, leasing is the first step in the exploration process, so delays in lease 

sales would delay subsequent activities. Because of remoteness and seasonal constraints, it typically could take 10 years or more from a lease sale to the start-up 

of production resulting from successful exploration. Even if leasing is not delayed, 

future gas production could still be delayed because there is no transportation system to deliver any discovered gas to market. Gas discoveries would be stranded in 

the Chukchi just as they are at the present time on the North Slope. However, a 

large gas discovery in the Chukchi could accelerate a gas project and possibly justify 

a larger capacity gas pipeline. Currently, about 35 trillion cubic feet (Tcf) of known 

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gas reserves have been identified on State lands (onshore and nearshore) in northern Alaska. A gas discovery at the Burger prospect in 1990 suggests that large gas 

pools are present in the Chukchi Sea OCS. There are currently no active leases in 

the Chukchi area and the Burger prospect will be available for leasing in the lease 

sale scheduled for February 2008. Additional drilling will be needed to define the 

size of the Burger prospect as well as other prospects in the area. Nearly 60 Tcf 

of gas reserves need to be identified to support the planned 4.5 billion-cubic-feetper-day capacity to be carried by a North Slope gas pipeline during its 35 year 

project life. Undiscovered Alaskan gas resources are expected to be huge—estimates 

of the total resource base in greater northern Alaska are 224 Tcf (onshore—119.2 

Tcf; Chukchi Sea—76.8 Tcf; Beaufort Sea—27.6 Tcf). Additional gas discoveries in 

the gas-prone Chukchi Sea could provide needed incentives (additional reserves) to 

support the gas pipeline project. 

8. The 5-year program predicts that 1 billion barrels of oil will be produced 

from leases in the Chukchi Sea. Is that oil to be produced in the next five 

years? If not, when do you expect it to be produced? 

Answer: The 2007-2012 5-Year Programmatic EIS assumes that the activities associated with OCS leasing in Alaska would take place over a 40-year time period. 

The scenario for the analysis in the EIS begins with leases being issued during 

2007-2012; continues through exploration, development, and production; and ends 

with decommissioning at the end of the 40-year period. The 2007-2012 5-Year Program EIS assumed that a total of 0.5 to 2.0 billion barrels of oil would be produced 

in the Arctic OCS of Alaska, from either the Chukchi Sea, the Beaufort Sea, or both 

combined. 

MMS believes that a huge oil discovery (possibly a 1-billion barrel oil discovery) 

would be necessary to justify the first stand-alone field in this frontier area. The 

1 billion barrels of oil referenced in the question refers to the amount of oil assumed 

to be developed in the scenario for the analysis in the Chukchi Sea Sale 193 EIS. 

It does not represent a prediction of future production. Typically, it takes 10 years 

or more between the important first step of leasing and production start-up in frontier areas of the OCS, like the Chukchi Sea, so Chukchi oil should not be expected 

in the next 5 years. The scenario analyzed in the EIS estimated that a lease sale 

in 2008 could be followed by a commercial discovery in 2010 and oil production 

starting in 2020. Oil production from this hypothetical field would last until 2044. 

For the Chukchi Sea, our 2006 National Assessment estimated that technically 

recoverable oil amounts to about 15 billion barrels (mean), with a 5% chance of 40 

billion barrels. Recoverable gas is estimated at 77 trillion cubic feet (mean), with 

a 5% chance of 210 trillion cubic feet. These values give a picture of what may be 

there, but actual amounts that could be developed depend on future oil and gas 

prices and sufficient exploration to find commercial-size fields.

ALTERNATIVE LEASING SCHEMES

9. Mr. Cruickshank, in the proposed final program, there are several 

mentions to alternative leasing schemes that were suggested by the State 

of Louisiana. But there are no details about what those schemes are. Could 

you give us a little more detail on that? 

Answer: The State of Louisiana commented on using alternative leasing schemes 

in several letters to MMS in 2006, addressing concerns regarding the currently used 

area-wide leasing scheme. Under current area-wide leasing, used by MMS since 

1983, entire planning areas are made available for bidding in a given lease sale, 

subject to selected withdrawals mostly due to environmental and national defense 

considerations. 

The MMS has considered the State of Louisiana’s comments on leasing schemes 

that could serve as alternatives to area-wide leasing. Such schemes could involve 

the design of smaller sale offerings; resulting in fewer tracts leased. These schemes 

could involve requests for nomination of a limited number of tracts from industry, 

the selection of tracts to be included in the sale by MMS, and revision of fiscal terms 

to target certain leasing goals related to size and location. The MMS has decided 

to conduct a detailed independent analysis of these alternative approaches which 

would identify their broad programmatic implications in comparison to MMS’ responsibilities under the OCS Lands Act. It is anticipated that the design and conduct of this detailed analysis could take up to several years to complete. If it is determined that some alternative approaches to leasing are preferable after the completion of the analysis, the 5-year program for 2007-2012 could be adjusted accordingly or the alternative approaches could be incorporated into the subsequent 5-year 

program for 2012-2017. 

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10. Does the Minerals Management Service have any preliminary thoughts 

on these schemes? Has industry provided any input on these? 

Answer: While considering ways to address the State’s concerns, MMS must be 

cognizant of the effects any policy changes might have on the achievement of other 

statutory and implicit goals of the Federal OCS program. Among these are expeditious and orderly development of oil and gas resources and maintaining a diverse 

and competitive industry. Area-wide leasing allows smaller independent companies 

to rapidly produce low-resource, low-risk fields, while larger companies push the 

edge of the technology envelope in deep water. It also encourages strong and innovative seismic exploration and geophysical contracting and processing industries. In 

addition, a sudden change in policy that restricts access to oil and gas resources, 

or that alters the timetables the offshore industry has come to depend on, may lead 

to undesirable socioeconomic disruptions in local coastal economies. We expect our 

upcoming, detailed analysis of alternatives to area-wide leasing to address such possible consequences. Therefore, pending completion of that analysis, MMS believes 

that it is appropriate to continue the area-wide approach in the Gulf of Mexico for 

the near future. 

11. Does the Minerals Management Service need any Congressional authorization to change the way lease sales are conducted? 

Answer: The Secretary currently has discretionary latitude in determining the 

size, timing and location of lease sales, as well as the terms and conditions of those 

sales. With this discretion comes the responsibility to ensure that terms and conditions chosen for a lease sale provide a fair return to the American people for these 

national resources. An independent analysis is being conducted to look at possible 

alternative leasing schemes to see if we can improve the way that leases are offered.

AREAS OPENED BY THE GULF OF MEXICO ENERGY SECURITY ACT

12. Mr. Cruickshank, what sort of interest have you seen from industry 

regarding the new areas opened up by the Gulf of Mexico Energy Security 

Act? I notice that the sale in the Eastern Gulf is scheduled for next year. 

Is the industry ready to start leasing that region at this point? 

Answer: Industry interest for these new areas has always been high, especially 

in the areas to be offered in Sale 205 in October 2007, and for the area in the new 

Eastern Planning Area, Sale 224, which is scheduled for March 2008. Since most 

of the acreage available in Sale 224 area is covered by 3D seismic data, we believe 

industry will bid aggressively. 

13. How about the so-called 181 South region, which is a bit further out. 

Will that be part of the Central Gulf of Mexico sale being conducted later 

this year? What sort of industry interest has there been in this region? 

Answer: The 181 Area South is tentatively scheduled as part of Central Gulf of 

Mexico Sale 208 in March 2009. Due to the need to conduct environmental analyses 

for the area as well as the lack of seismic data coverage over this area, the sale 

could not reasonably be scheduled for an earlier date. Presently, there is one active 

seismic permit acquiring 2D seismic data over this area. Due to the seismic acquisition activity and the anticipated resource potential, we anticipate strong industry 

interest in the 181 South region, especially the northern portion which is closer to 

existing infrastructure. The Call for Information (Call) and the Notice of Intent to 

Prepare an EIS for this area was published in the Federal Register in on September 

10, 2007. Depending on any industry responses to the Call, we may gain more insight into industry interest in the area.

BRISTOL BAY BUYBACKS

14. Mr. Cruickshank, I understand that the area currently being proposed 

for leasing in the North Aleutian Basin previously had leases on it, which 

were subsequently bought back by the federal government. Could you describe why you think we can explore that area properly now, when we 

couldn’t in the recent past? 

Answer: The State of Alaska and the local governments asked MMS to consider 

an offshore lease sale in the North Aleutian Basin because development with proper 

safeguards would provide a broader economic base for this area. The North Aleutian 

Basin is relatively shallow (100-300 ft) and lies south of the typical reach of the Bering Sea seasonal (winter-only) ice pack. A similar body of water, Alaska’s Cook Inlet, 

has experienced oil and gas operations without significant incident for over 40 years 

(1.3 billion barrels of oil and 1.7 Tcf of gas produced to date). Recent petroleum assessments indicate that North Aleutian Basin is more likely to contain commercial 

gas resources, thus minimizing the risk of oil spills and coastal damage. Nearly 20 

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years of industry experience have continually improved the safety of offshore operations in difficult environments (e.g. the North Sea). The reliability of new technologies (e.g. subsea well completions) has been proven in similar settings. If decisions are made to move forward with the lease sale, MMS will work with the State 

of Alaska and the local Borough governments to design appropriate mitigation for 

oil and gas operations.

CHANGES IN PLANNING AREA BOUNDARIES

15. Mr. Cruickshank, I notice that the Minerals Management Service 

changed the boundaries of the planning regions in the Gulf of Mexico and 

around the Mid-Atlantic. Could you tell me why that was necessary? 

Answer: On January 3, 2006, MMS published a notice in the Federal Register of 

its development of offshore administrative lines from each adjoining coastal state, 

using the principle of equidistance often applied to international boundary disputes. 

These lines were developed in light of the increasing number and type of activities 

and uses of the OCS. Listed among the potential uses of these lines was to provide 

a basis for more accurate delineation of planning areas. In the Draft Proposed Program for 2007-2012 published February 2006, the Secretary announced that some 

of the planning area boundaries would be moved to correspond to the new lines. The 

final proposed program was approved on July 1, 2007, with some redrawn planning 

areas for the Gulf of Mexico and Atlantic. The use of planning areas is for the administrative convenience of MMS for planning purposes and does not effect any statutory rights or responsibilities. 

16. Does where you draw these lines have any impact on how you do your 

analysis of the 5-year program, or how leasing proceeds? 

Answer: There was little if any impact on the actual 5-year analysis as the analysis was regional, not based on administrative boundaries. However, the redrawn 

planning area boundaries do affect the timing of when certain blocks might be 

leased. For example, those blocks that had been in the Western Gulf Planning Area 

and are now in the Central Gulf would be offered for lease at different times, but 

generally still at least once a year. The blocks that were in the Eastern Gulf and 

are now in the Central Gulf would probably be offered more often as Central sales 

are generally held once a year and Eastern sales have been less frequent. While 

leasing is more planning area focused, determining whether a state could be impacted under Coastal Zone Management Act is based on that statute’s requirements 

and not on where an administrative planning area boundary occurs. The revenue 

sharing under the Gulf of Mexico Energy Security Act is based on distance from the 

project so these administrative and planning area lines do not have an impact with 

respect to revenue sharing. 

17. Why did the Governors of both Florida and Texas object to the change 

in the Gulf of Mexico? 

Answer: Then-Governor Bush of Florida and Governor Perry of Texas objected to 

the reconfiguration of the planning area boundaries because the proposal would add 

acreage to the Central Gulf Planning Area and remove acreage from the Western 

and Eastern Gulf Planning Areas. The concern was that it wouldn’t be an accurate 

reflection of the impacts of OCS development on the Gulf States and could have an 

adverse impact on Texas and Florida respectively. However, the creation and delineation of OCS planning areas are for the administrative expediency of the MMS. 

The environmental and economic impacts, positive or negative, are not affected by 

the location of administrative or planning area lines. If a state is ‘‘affected’’ under 

the OCS Lands Act or ‘‘impacted’’ under the Coastal Zone Management Act, the location of an administrative or planning area boundary is immaterial.

ADMINISTRATIVE AREA BOUNDARIES

18. Mr. Cruickshank, I understand that both New Jersey and Virginia were 

opposed to how the new state administrative boundaries were drawn. How 

does MMS respond to those objections? 

Answer: MMS responded similarly to New Jersey and Virginia as to Texas and 

Florida, as noted in our response to Question 17. New Jersey was concerned that 

the movement of the planning area boundaries placed them in the North Atlantic 

Planning Area and not in the Mid-Atlantic as they had been and as would be any 

sale off Virginia. As discussed in Question 17 above, whether New Jersey is affected 

or impacted by any potential activity off the coast of Virginia is determined by applying the applicable statute, not the location of a boundary drawn for administrative convenience. 

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The Commonwealth of Virginia’s concern was related more to the actual drawing 

of the lines that resulted in the ‘‘pinched off’’ shape of the area proposed for a potential sale in the 5-Year Program. The boundaries were drawn using equidistance, a 

widely accepted and longstanding methodological tool. The equidistance principle 

has been endorsed internationally in the Law of the Sea Convention and by the U.S. 

Supreme Court to equitably establish boundaries between nations and between 

states.

DEFINITION OF ‘‘LARGE SPILLS’’

19. Mr. Cruickshank, there’s a table (Table IV-17) in the final environmental 

impact statement about oil spill assumptions that gives different definitions for large spills. A large pipeline spill is defined as 4,600 barrels, a 

large platform spill is 1,500 barrels, and there are three different sizes for 

large tanker spills for the Gulf of Mexico, Pacific Ocean, and Atlantic 

Ocean. How could a spill that would be defined as ‘‘large’’ in one region not 

be ‘‘large’’ in another region? How do you come up with these numbers? 

Answer: For research modeling purposes, MMS evaluates potential offshore oilspill risks using the Oil Spill Risk Analysis (OSRA) model developed by DOI. MMS 

standards define spills larger than 1000 barrels as ‘‘large’’ for modeling potential oil 

spills from OCS oil and gas activities. While the definition of a ‘‘large’’ spill is the 

same everywhere, for purposes of modeling the impacts of spills in different areas 

or from different sources, MMS postulates hypothetical spills based on median spill 

sizes over the historical record. Relative to these median spill sizes, a ‘‘large’’ spill 

from a platform is a different size than one from a pipeline or a tanker. The spill 

size may vary by region. As an example - the tankers vary depending on whether 

they used the Trans Alaska Pipeline System (TAPS) fleet (which was done for Alaska crude coming to the Pacific coast), or the data set for tanker spills in U.S. waters 

of the Gulf of Mexico. We analyze representative sized spills so that we can have 

a complete perspective of the range of possible impacts that could potentially occur 

even if these events are very unlikely. 

20. Is it correct to say that MMS assumes that as a result of the 5-year leasing program, there will be one spill of at least 4,600 barrels from a pipeline 

in the North Aleutian Basin? 

Answer: No. The most likely number of large spills is zero. In addition, based on 

the MMS 2006 National Assessment of Undiscovered OCS Oil and Gas, we consider 

that the North Aleutian Basin is natural gas prone, rather than oil prone. Regardless, we still analyzed the effects of a hypothetical oil spill in the 5-Year EIS. 

For modeling purposes, MMS assumed a hypothetical large spill occurs and analyzed the impacts of one such spill on environmental, social, and economic resources. 

A large spill is defined as greater than or equal to 1,000 barrels and a small spill 

is less than 1,000 barrels. For modeling purposes, we assume the large spill is either 

a result of a pipeline spill of 4,600 barrels or a platform spill of 1,500 barrels.

NORTH ALEUTIAN BASIN PROPOSED MITIGATION MEASURES

21. Mr. Cruickshank, one of our witnesses in the final panel, Mr. Juettner, 

the Administrator of the Aleutians East Borough, attached a list of mitigation measures that they say need to be enacted in order to win the 

borough’s full support of the lease sale. These include comprehensive protections for fisheries and coastal habitat, requirements for local hiring and 

procurement, a zero tolerance for water pollution discharge, and many 

others. Have you seen these measures? If so, do you believe that these 

requirements can be met? 

Answer: The MMS has been working closely with the Aleutians East Borough to 

address their concerns. The Aleutians East Borough provided proposed mitigation 

measures as part of its comments on the Draft EIS for the Outer Continental Shelf 

Oil and Gas Leasing Program: 2007-2012. We held a series of conference calls with 

the Borough and provided detailed written responses to their concerns. Much of that 

information was incorporated into the final EIS and we appreciate the Borough’s assistance in improving the clarity and content of the EIS. However, some suggested 

measures are beyond the scope of MMS authority. For example, on-shore building 

standards are the responsibility of local or state governments. 

MMS develops lease-specific mitigation during the NEPA process for particular 

lease sales, because at that stage the scope and geography of the proposed action 

are better defined. We will continue to work with the local communities, including 

the Aleutians East Borough, and the State of Alaska as we develop the lease-specific 

proposal and environmental review for any potential sale.

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CHUKCHI SEA BUFFER ZONE

22. Mr. Cruickshank, are you familiar with a letter that was sent by the National Marine Fisheries Service to the Regional Director of the Minerals 

Management Service about the proposed Chukchi lease sale on January of 

this year? 

Answer: We are familiar with this letter, dated January 30, 2007, from the Acting 

Administrator of the Alaska Region of the National Marine Fisheries Service 

(NMFS) to the Regional Director of the MMS Alaska Region. The letter provides 

comments on the draft EIS for the proposed Chukchi Sea Sale 193. NMFS was a 

cooperating agency on the EIS and MMS considered their comments during the development of the final EIS. 

23. In this letter, they say they ‘‘remain very concerned about potential 

impacts to living marine resources and their habitats,’’ and that the 1987 

biological opinion used by the Minerals Management Service to justify a 25-

mile buffer -as you have in the 5-year leasing program has been superseded. They say they ‘‘strongly endorse’’ a 50-mile buffer as a way to 

protect natural resources and subsistence hunters in the area. Have you 

taken this letter into account? 

Answer: The letter provided comments on the draft EIS for proposed Chukchi Sea 

Sale 193. MMS evaluates alternatives in each sale EIS, such as the described ‘‘buffers’’. For Sale 193, we assessed two buffer zone options which vary in distance from 

shore from 25 to 60 miles. 

MMS regularly consults with NMFS for each sale regarding endangered species. 

The 2006 Arctic Region Biological Opinion from NMFS recommends deferral from 

leasing of areas within the spring whale migration route through nearshore open 

waters (i.e., through the Polynya) but does not specify a distance from shore. The 

Polynya Deferral under the 2002-2007 5-Year Program (under which Sale 193 was 

originally scheduled) and the 25-mile buffer zone under the 2007-2012 Program do 

just that. We will continue to consult with NMFS on any future activities.

NMFS LETTER ON ALASKA REGIONS

24. Mr. Cruickshank, on April 11, 2006, the National Marine Fisheries Service submitted detailed comments about the Draft EIS on the 5-year plan, 

in which they recommended that the North Aleutian Basin and Chukchi 

sea sales be deleted and that a comprehensive research program be initiated so that the areas can be included in future sales. They say the proposed schedule is unrealistically ambitious.’’ In the response, MMS simply 

said, ‘‘Thank you for your comment; however, we disagree.’’ Is that an adequate response to the scientific opinion of the federal government’s fishery 

experts? 

Answer: MMS values the scientific expertise of NOAA and appreciated the thorough review they provided of the Draft EIS for the Proposed Outer Continental 

Shelf Oil and Gas Leasing Program. Their comments helped improve the final document. 

The April 11, 2006 comments from NOAA-Fisheries were on the 2007-2012 Draft 

Proposed Outer Continental Shelf Oil and Gas Leasing Program. NOAA-Fisheries 

also provided two sets of comments on the Draft EIS on November 13, and November 22, 2006. We apologize if our response in the specific heading cited in the Final 

EIS, Section V.D, Issue 1d, ‘‘Not Enough Information to Do Adequate Analysis’’, 

comes across as terse. However, these comments had been discussed in earlier responses and similar concerns were answered in more detail in other parts of the 

document. Also included in the response was a statement: ‘‘Also discussed elsewhere, this EIS addresses information and analysis needs for program planning.’’ 

We addressed these concerns under a number of headings including: ‘‘Additional 

Studies’’, ‘‘Marine Mammals’’, ‘‘Seafloor Habitats’’, ‘‘Impacts on Fisheries’’, ‘‘Seafloor 

Habitats’’, and ‘‘Oceanography’’. 

For example, under ‘‘Additional Studies’’: 

• Concern: The Alaska Center for the Environment; AMCC; Alaska Oil and Gas 

Association; Commonwealth of Virginia, Department of Environmental Quality; and 

others raised concerns about the need for baseline studies before leasing in frontier 

areas such as the North Aleutian Basin, the Chukchi Sea and the Atlantic Coast. 

The Bristol Bay Native Corporation requested ‘‘that MMS, in concert with industry 

and the local communities, initiate and fund a series of studies of the Southwest 

Region of Alaska. We want these studies to evaluate both the positive and negative 

effects of exploration and production activities. These studies will furnish information essential in crafting mitigation measures that provide adequate protection withVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00101 Fmt 6633 Sfmt 6621 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
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out overly restricting necessary industry operations.’’ Suggestions for studies included a basic understanding of the Alaskan environment; fisheries resources; 

unique biological communities; and marine mammals, sea turtles, and marine/coastal birds within the Virginia planning zone. 

Response: The MMS has an active Environmental Studies Program to address the 

information needs of the Agency. For frontier areas, existing knowledge about the 

areas will first be collected through workshops and literature searches. The MMS 

has already conducted two workshops, one to collect information about the Chukchi 

Sea in early November 2006 and the other to collect information about the North 

Aleutian Basin in late November 2006. These workshops will be used to identify 

data gaps and prioritize the studies for funding consideration. 

MMS agrees that research must be conducted for areas proposed for sale, but, due 

to the need to focus its resources on the agency’s highest program priorities, it generally does not conduct such research in areas that are not included in the 5-Year 

Program. MMS supports a substantial studies program to accommodate the lease 

sales scheduled for 2008, 2010 and 2012 for the Chukchi Sea and the 2011 lease 

sale scheduled for the North Aleutians Basin. Considering the need for an orderly 

and environmentally safe process to help meet our Nation’s energy needs, it is a 

challenging, but not an overly ambitious schedule. Alaskan studies are already in 

progress. A table of these ongoing studies can be viewed at http://www.mms.gov/

alaska/ess.

BRISTOL BAY INTERIOR REPORT LANGUAGE

25. Mr. Cruickshank, are you familiar with the language regarding Bristol 

Bay in the Interior Appropriations bill report? Could you share your 

thoughts on that with the committee? 

Answer: We are familiar with this language and believe we are addressing the 

concerns. With the request to include a sale in the North Aleutian Basin from the 

State of Alaska and local governments, MMS plans to conduct additional environmental studies in this area to supplement existing information available from other 

agencies and sources. In November 2006, MMS held a workshop to assess the available information in the area and to identify additional research that may be needed. 

A total of 111 scientists and representatives from other federal and state agencies, 

universities, local and tribal governments, and the public attended. 

As a result, in 2007, MMS and the NMFS began collaboration on a high-priority, 

multi-million dollar study of the North Pacific right whale. Another study is under 

procurement to develop oceanographic circulation modeling. MMS plans to begin 

other studies in FY 2008. We will continue to seek and consider the advice from 

experts and stakeholders, such as NMFS, the Fish and Wildlife Service, State of 

Alaska agencies, local governments, and federally recognized tribes as we implement future research. 

26. In addition to the studies that you mention in your testimony, is there 

anything else that you will do in response to the report language? 

Answer: The MMS has in place a process that has many opportunities for cooperation and input to ensure that we can consider all issues that may affect leasing. 

Early in our process, we issue a Notice of Intent to prepare an EIS. This step solicits 

input on the issues, alternatives, and mitigation measures to be evaluated in the 

EIS. The Notice of Intent also invites Federal, State, local governments, and Tribes 

to become cooperating agencies in the preparation of the EIS. 

The State, federally recognized tribes, and local communities will be invited to 

participate in the various public meetings, Government-to-Government meetings, 

and hearings that are part of the NEPA process. Through the MMS Environmental 

Studies Program, they also have opportunity to review studies plans and reports 

and provide local input into the development and review of the scientific information 

gathered. 

We also have a number of other parallel coordination and consultation processes 

that will be underway. Concurrent with the NEPA and lease sale processes, MMS 

will complete required Endangered Species Act section 7 consultations, Essential 

Fish Habitat consultation, Section 106 consultation under National Historic Preservation Act, and coastal zone consistency determination. 

Thus, as it has for other OCS lease sales, MMS will conduct very thorough coordination with other Federal agencies, state, and local governments to ensure the appropriate protection of the North Aleutian Basin region.

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SPILLS AS A RESULT OF 2005 HURRICANES

27. Mr. Cruickshank, in his opening statement, Ranking Member Pearce 

stated that ‘‘not a single drop’’ of oil was spilled as a result of Hurricanes 

Katrina and Rita. Is that correct? If not, could you provide a detail of 

exactly what was spilled as a result of those two hurricanes? 

Answer: As of January 25, 2007, oil spill reports from Hurricanes Katrina and 

Rita in 2005, show that there were no spills due to loss of control of oil producing 

wells, due to the successful operation of the safety valves that are required to be 

installed on every well at least 100 feet below the ocean floor. MMS has identified 

125 spills of petroleum products totaling 16,302 barrels that were lost from platforms, rigs, and pipelines on the Federal OCS as a result of damages from Hurricanes Katrina and Rita in 2005. This is a relatively small amount compared to the 

daily OCS production in the Gulf of Mexico, and is equivalent to less than 2 weeks 

of natural oil seeps into the Gulf. The number of spills is based on reports received 

by the National Response Center as well as observations in the field by MMS inspectors. 

The estimation of oil lost is based on volume estimates of static oil volumes of 

damaged surface processing equipment (such as vessels, tanks, and associated piping) and damaged oil pipelines. This estimate represents an upper bound case. For 

example, if a 100 gallon capacity fuel tank was lost overboard from a platform, the 

tank was presumed to be full at the time it was lost in the storm. The tank may 

not have been full or leaked any product into the environment, but until the actual 

amount of product the tank contained can be verified, or the tank recovered, the 

100 gallons is considered ‘‘spilled’’. It should be noted that no incidents of environmental damage were reported from spills that occurred on the OCS. It should be 

also noted that spills that originated on the OCS were in most cases rapidly dissipated by the storm wave action and evaporation. Additionally, industry moved 

quickly to alleviate any residual oil releases from the damaged equipment and pipelines. In other cases where small volumes of oil continued to be released from submerged process equipment, means of capturing and recovering oil were put into 

place until the equipment could be appropriately salvaged. Additional information 

is carried on the MMS website at http://www.mms.gov/SettingtheRecordStraight/

EstimatedOil%20SpillsAsaResultofHurricanesKatrinaandRita.htm. 

Questions submitted by Congressman Patrick J. Kennedy 

1. Mr. Cruickshank, there is a table (Table IV-17) in the final environmental 

impact statement about oil spill assumptions that gives different definitions for large spills. A large pipeline spill is defined as 4,600 barrels, a 

large platform spill is 1,500 barrels, and there are three different sizes for 

large tanker spills for the Gulf of Mexico, Pacific Ocean, and Atlantic 

Ocean. Could you clarify this? 

Answer: For research modeling purposes, MMS evaluates potential offshore oilspill risks using the Oil Spill Risk Analysis (OSRA) model developed by DOI. MMS 

standards define spills larger than 1000 barrels as ‘‘large’’ for modeling potential oil 

spills from OCS oil and gas activities. While the definition of a ‘‘large’’ spill is the 

same everywhere, for purposes of modeling the impacts of spills in different areas 

or from different sources, MMS postulates hypothetical spills based on median spill 

sizes over the historical record. Relative to these median spill sizes, a ‘‘large’’ spill 

from a platform is a different size than one from a pipeline or a tanker. The spill 

size may vary by region. As an example - the tankers vary depending on whether 

they used the TAPS fleet (which was done for Alaska crude coming to the Pacific 

coast), or the data set for tanker spills in U.S. waters of the Gulf of Mexico. We 

analyze representative sized spills so that we can have a complete perspective of the 

range of possible impacts that could potentially occur even if these events are very 

unlikely. 

2. How do you respond to the fact that MMS predicts in the Final Environmental Impact Statement for the 5-Year Program, that leasing in the North 

Aleutian Basin Planning Area will lead to at least one large oil spill, two 

intermediate sized spills, and numerous smaller spills? 

Answer: The MMS does not predict that leasing in the North Aleutian Basin Planning Area will lead to one large (greater than or equal to 1,000 barrels) oil spill or 

the smaller (less than 1,000 barrels) oil spills. The most likely number of large spills 

is zero. In addition, based on the MMS 2006 National Assessment of Undiscovered 

OCS Oil and Gas, we consider that the North Aleutian Basin is natural gas prone, 

rather than oil prone. Regardless, we still analyzed the effects of a hypothetical oil 

spill in the 5-Year EIS. 

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For modeling purposes, MMS postulated a hypothetical spill of what is considered 

a ‘‘large’’ size to be either 1,500 or 4,600 barrels, based on median spill sizes respectively from platforms and pipelines over a long historical record. MMS then analyzed the impacts of one such hypothetical spill on environmental, social, and economic resources. We provided the analyses of large and small spills so that we can 

have a complete perspective of the range of possible impacts that could potentially 

occur, even if these events are unlikely.

[The response to questions submitted for the record by Mr. 

Sheard follows:]

Response to questions submitted for the record by Whit Sheard,

Alaska Program Director, Pacific Environment 

Question from Rep. Patrick Kennedy: 

How does the 5-year plan interact with the recent recommendations of the 

U.S. Commission on Ocean Policy? 

Response: The U.S. Commission on Ocean Policy, along with the companion Pew 

Oceans Commission, raised significant concerns surrounding U.S. policy as it relates 

to impacts to and governance of our nation’s marine environment. Both commissions 

recognized the need for substantial reform of ocean policy and made recommendations germane to the 5 Year Plan for Oil and Gas Leasing on the Outer Continental 

Shelf Development for 2007-2012. Unfortunately it appears that the Minerals Management Service has not heeded the call for integrated ocean management and instead is continuing to press forward with a socially and ecologically irresponsible 

plan that perpetuates the inadequaciesof U.S. oceans policy. I will specifically address the Commission’s recommendations as they relate to the 5 Year Plan’s commitment of our nation’s Arctic resources, including the Chukchi Sea, the Beaufort 

Sea, and Bristol Bay (North Aleutian Basin). 

The U.S. Commission on Ocean Policy delineated a comprehensive set of Guiding 

Principles which it recommended be applied to guide national policy. These Guiding 

Principles are: • Sustainability: Ocean policy should be designed to meet the needs of the 

present generation without compromising the ability of future generations to 

meet their needs. • Stewardship: The principle of stewardship applies both to the government and 

to every citizen. The U.S. government holds ocean and coastal resources in the 

public trust—a special responsibility that necessitates balancing different uses 

of those resources for the continued benefit of all Americans. Just as important, 

every member of the public should recognize the value of the oceans and coasts, 

supporting appropriate policies and acting responsibly while minimizing negative environmental impacts. • Ocean—Land—Atmosphere Connections: Ocean policies should be based on 

the recognition that the oceans, land, and atmosphere are inextricably intertwined and that actions that affect one Earth system component are likely to 

affect another. • Ecosystem-based Management: U.S. ocean and coastal resources should be 

managed to reflect the relationships among all ecosystem components, including 

humans and nonhuman species and the environments in which they live. Applying this principle will require defining relevant geographic management areas 

based on ecosystem, rather than political, boundaries. 

• Multiple Use Management: The many potentially beneficial uses of ocean and 

coastal resources should be acknowledged and managed in a way that balances 

competing uses while preserving and protecting the overall integrity of the 

ocean and coastal environments. 

• Preservation of Marine Biodiversity: Downward trends in marine biodiversity should be reversed where they exist, with a desired end of maintaining or 

recovering natural levels of biological diversity and ecosystem services. 

• Best Available Science and Information: Ocean policy decisions should be 

based on the best available understanding of the natural, social, and economic 

processes that affect ocean and coastal environments. Decision makers should 

be able to obtain and understand quality science and information in a way that 

facilitates successful management of ocean and coastal resources. 

• Adaptive Management: Ocean management programs should be designed to 

meet clear goals and provide new information to continually improve the scientific basis for future management. Periodic reevaluation of the goals and effectiveness of management measures, and incorporation of new information in 

implementing future management, are essential. 

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• Understandable Laws and Clear Decisions: Laws governing uses of ocean 

and coastal resources should be clear, coordinated, and accessible to the nation’s 

citizens to facilitate compliance. Policy decisions and the reasoning behind them 

should also be clear and available to all interested parties. • Participatory Governance: Governance of ocean uses should ensure widespread participation by all citizens on issues that affect them. • Timeliness: Ocean governance systems should operate with as much efficiency 

and predictability as possible. • Accountability: Decision makers and members of the public should be accountable for the actions they take that affect ocean and coastal resources. • International Responsibility: The United States should act cooperatively 

with other nations in developing and implementing international ocean policy, 

reflecting the deep connections between U.S. interests and the global ocean. 

(United States Commission on Ocean Policy (2004). An Ocean Blueprint for the 21st 

Century. Executive Summary, pg. 6) 

The 5 Year Plan for Oil and Gas Leasing on the Outer Continental Shelf for 2007-

2012 facially violates all of these principles and renders the concept of achieving a 

sustainable ecosystem-based management regime in the Arctic meaningless. As the 

proposed development will occur in extremely sensitive areas where spills are virtually guaranteed and there is inadequate spill response technology, the U.S. is 

committing enormous areas of our Arctic seas to becoming an oil and gas sacrifice 

zone. Due to this egregious commitment of our Arctic resources in the face of reasonable recommendations from several Blue Ribbon commissions, I will address the 

5 Year Plan as it relates to each Guiding Principle. 

(1) Sustainability: The 5 Year Plan commits us to a short-sighted policy of increasing our dependency on hydrocarbon extraction and the concomitant environmental impacts of direct introduction of pollution into the marine environment and an increase in the anthropogenic causes of climate change. The 

5 Year Plan as a policy does nothing to help future generations meet their 

needs. By disrupting our marine environment, exacerbating climate change, 

and impacting renewable resources such as the nation’s largest fishery and 

the whaling communities of the Arctic, the 5 Year Plan commits the nation 

to unsustainable use of our resources. 

(2) Stewardship: As discussed above and in previous testimony, the 5 Year 

Plan violates the federal trust responsibility and places responsibility for aggressive and unsustainable development of sensitive public resources in the 

hands of multinational oil corporations with recent histories of royalty scandals, worker safety violations, and inadequate maintenance of facilities and 

pipelines. For many, this 5 Year Plan represents the culmination of the secret Cheney Energy Task Force, and commits the nation to five more years 

of violating the public trust. 

(3) Ocean-Land-Atmosphere Connection: This principle is extremely illustrative of how the 5 Year Plan ignores the U.S. Commission on Ocean Policy. 

Quite simply put: the 5 Year Plan represent one of the nation’s largest commitments to both directly impacting our sensitive Arctic environment and increasing our greenhouse gas emissions. This is problematic as the Arctic is 

disproportionately sensitive to climate change and the ongoing reduction in 

sea ice acts as a feedback mechanism to increase climate change because 

darker areas of open ocean, which are expanding, absorb sunlight and thus 

increase temperatures (as opposed to sea ice, which reflects sunlight and has 

a cooling effect). Increasing climate change also leads to increasing impacts 

on the land, including coastal erosion, which is affecting traditional communities of the Arctic, and impacts to terrestrial wildlife species. Another example of the ocean-land-atmosphere connection is polar bears, which are currently being considered for protection under the Endangered Species Act due 

to the loss of essential sea ice habitat. These species are experiencing nutritional and reproductive stress, are moving from the ocean to land as their 

sea ice habitat and prey decrease, and are facing the cumulative impacts of 

terrestrial oil and gas development expansion into their habitat. 

(4) Ecosystem-Based Management: This principle is another that best illustrates the aggressive and short-sighted nature of the 5 Year Plan. While 

there is global recognition of the need for rational planning and zoning as 

it relates to both the terrestrial and marine environment, the federal government has taken no steps whatsoever to look at the Arctic seas in an integrated manner. The 5 Year Plan, simply put, is a ‘‘cart before the horse’’ approach which predetermines the outcome of any future zoning process. The 

5 Year Plan zones virtually the entire Arctic Ocean as an oil and gas development area and ignores the wealth of scientific literature on habitat protecVerDate 0ct 09 2002 16:56 Apr 09, 2008 Jkt 098700 PO 00000 Frm 00105 Fmt 6633 Sfmt 6621 L:\DOCS\36476.TXT Hresour1 PsN: KATHY
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tion, the impacts of oil and gas development, and the traditional knowledge 

of Arctic whaling communities. It also places areas such as Bristol Bay, one 

of the world’s most productive fisheries, at direct risk from what is clearly 

an incompatible use of our marine resources. Illustrating the urgent need to 

address ocean zoning and ecosystem-based management is that there are 

currently projects planned for next year in the Beaufort Sea’s Stefansson 

Boulder Patch, an oasis of corals, anemones, sponges, kelp and fish species 

which are not known to exist anywhere else in the Beaufort Sea. Perpetuating this singularly focused management regime will irreparably harm our 

Arctic seas and preclude meaningful attempts to best define relevant geographic management areas—especially those that have unique ecological values. 

(5) Multiple Use Management: As discussed above, the 5 Year Plan singularly 

focuses on producing oil and gas from areas where considerations of commercial fisheries, traditional subsistence economies, and ecological protection 

should be paramount. The 5 Year Plan unacceptably infringes on competing 

uses such as critical habitat for the world’s most endangered whales (the 

eastern stock of the North Pacific right whale), the nation’s largest fisheries, 

and subsistence areas used for millennia. Clearly the Minerals Management 

Service fails to even consider that oil and gas development is sometimes unwarranted and must yield to competing uses such as renewable economies, 

habitat needs for imperiled species, and cultural traditions that are unacceptably put at risk by oil spills, exploration, infrastructure development, 

and ongoing operations. 

(6) Preservation of Marine Biodiversity: The 5 Year Plan will cause oil spills 

in areas in which there is a demonstrated lack of technological capacity to 

prevent impacts. These areas include the Bering Sea (Bristol Bay/North 

Aleutian Basin), which is likely the world’s most productive marine ecosystem. It also includes the Chukchi Sea, considered by many to be the 

world’s most productive high latitude sea. The 5 Year Plan does nothing to 

preserve marine biodiversity and instead subverts protection of these unique 

and productive areas to the short-term and ecologically irresponsible extraction of fossil fuels. 

(7) Best Available Science and Information: Our knowledge of the Arctic 

marine ecosystems being placed at risk by the 5 Year Plan is extremely thin. 

What is known by scientists and Native communities who have studied the 

region for millennia, however, is that it is an incredibly complex ecosystem 

providing a rich tapestry of habitats for endangered marine mammals, commercially important fish species, and millions of seabirds. The dearth of scientific information has been repeatedly noted by the National Marine Fisheries Service (NMFS), who ultimately recommended deletion of the Bristol 

Bay (North Aleutian Basin) and Chukchi Sea sales. In comments on the 5 

Year Plan, NMFS stated: 

The NMFS Alaska Region believes the proposed leasing schedule is 

unrealistically ambitious and would not allow for necessary environmental 

research...This is particularly true for the North Aleutian Basin (Bristol Bay) 

and Chukchi Sea proposed sales. The NMFS Alaska Region recommends 

deletion of these areas and initiation of a comprehensive research program to 

support future plans subsequent to the 2007-2012 plan...For instance, MMS 

states repeatedly that little is known about the distribution, abundance, 

behavior, and habitat use of marine mammals in the Chukchi Sea, and the 

few existing studies are very dated. It is extremely important to gain a better 

understanding of these issues prior to any exploration, leasing, or development. 

The need for baseline data on the distribution of marine mammals in the 

Chukchi Sea is particularly urgent. 

(National Marine Fisheries Service Comments on Department of the Interior’s Minerals Management Service’s Draft Proposed Outer Continental Shelf Oil and Gas 

Leasing Program 2007-2012, dated April 10, 2006.) 

(8) Adaptive Management: Due to the above referenced deficiencies in scientific information and the unilateral zoning of our Arctic seas for oil and 

gas drilling, it is unclear if adaptive management is even possible under the 

5 Year Plan. 

(9) Understandable Laws and Clear Decisions: There continues to be a lack 

of coordinated and integrated ocean management. Furthermore, management 

measures seem to be based upon energy priorities that are developed behind 

closed doors and that are unresponsive to legitimate comments from the public and other federal agencies. 

103

(10) Participatory Governance: Despite widespread opposition from native 

communities who stand to be most impacted by drilling in the Arctic seas, 

the Minerals Management Service is unwilling to consider scaling back the 

aggressive scope of the 5 Year Plan. Development of energy policies in concert with the energy industry behind closed doors further subvert any claims 

by MMS of legitimate public process. Although MMS should be applauded for 

having public meetings in remote communities most impacted by this program, there were no changes made to the plan that responded to overwhelming community concerns. Furthermore, meetings in other affected communities, such as Dutch Harbor, Alaska, the nation’s busiest commercial 

fishing port, did not receive Federal Register notice of scheduled meetings 

until after the meetings had occurred. These concerns were magnified by recent rollbacks to Alaska’s Coastal Zone Management Plan, which eliminated 

significant opportunities for affected communities to participate in reviewing 

the efficacy of proposed development. 

(11) Timeliness: Although MMS has been rushing to ensure that the oil industry 

receives all necessary permits as quickly as possible, this has not led to increased efficiency. In fact, quite the opposite has occurred, with affected communities repeatedly requesting that MMS undertake a process that ensures 

responsible management and public participation. A common refrain in affected communities is that MMS is pushing ‘‘too much, too soon, too fast.’’ 

The U.S. Environmental Protection Agency has noted this in their comments 

and has suggested that there are serious environmental justice concerns related to the 5 Year Plan. The result has been that communities and non-governmental organizations are forced to initiate litigation in order to ensure 

that legitimate economic, cultural, and ecological interests are not ignored. 

(12) Accountability: Decision-makers seem to be heavily insulated from accountability for their actions. This is especially true as it relates to remote communities who pay the price for irresponsible management decisions. 

(13) International Responsibility: It is unclear if MMS is willing to undertake 

any concerted effort to be a responsible international actor. While other countries, such as Norway, are developing their oil and gas resources in a manner 

that attempts to incorporate ecosystem-based management, multiple use concerns, and socially responsible programs, the U.S. is continuing to ignore our 

disproportionate contribution to climate change and is adopting programs 

such as the 5 Year Plan that do not promote sensible management and environmental responsibility. The U.S. is also encouraging international corporations such as Shell Oil, who have a history of environmental and social infractions in regions such as Russia’s Sakhalin Island, into our waters. The 

U.S. has chosen instead to be a poor international role model by adopting a 

5 Year Plan that increases climate change, disproportionately impacts indigenous communities, reward corporations with a history of poor environmental 

stewardship, and encourages risky development in ecologically sensitive regions already facing profound impacts from climate change. 

In sum, the 5 Year Plan for Oil and Gas Development on the Outer Continental 

Shelf, does very little to respond the well-researched and sensible guidance of the 

U.S. Commission on Ocean Policy, which recommended 

development of a coordinated offshore management regime that would be 

comprehensive, transparent, and predictable, bring a fair return to the public, 

and promote a balance between economic and environmental considerations. 

(United States Commission on Ocean Policy (2004). An Ocean Blueprint for the 21st 

Century. Chapter 24, Managing Offshore Energy and Other Mineral Resources, pg. 

352.) 

Instead of heeding this guidance, MMS has promulgated an overly aggressive expansion of oil and gas drilling in U.S. waters. MMS has repeatedly failed to fully 

inform the public of the extent of ecological damage that this plan will cause to our 

public resources. The agency has set the nation on a five year course to perpetuate 

climate change, adversely modify critical habitat for endangered and threatened 

species, damage renewable commercial and subsistence economies, and cause disproportionate impacts to Alaska Native communities. MMS has suppressed important science, has drawn conclusions that bear little relationship to the facts, has ignored the sound advice of other federal agencies, and has not offered an adequate 

public process for either this plan or the multitude of current activities already taking place in federal waters. Considering that the nation is currently defining policies 

to address climate change, energy efficiency, and oceans management, the proposed 

plan bears little relation to rational planning and places important public resources 

at an unacceptable level of risk. Æ