Lower Cook Inlet:

Another Example of More Data Needed for Appraising Outer Continental Shelf Oil and Gas Resources

EMD-78-48: Published: Jun 8, 1978. Publicly Released: Jun 8, 1978.

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The nation greatly relies on the Outer Continental Shelf (OCS) leasing program for meeting near-term domestic energy needs, particularly while new energy technologies and conservation actions are being developed. Decisions regarding where to lease and at what rate have a significant impact on the future production of OCS resources. The Department of the Interior's October 1977 sale of 135 oil and gas tracts on the OCS off the southern Alaskan coast, commonly known as the Lower Cook Inlet Sale CI, was reviewed and compared with previous sales of 1975 and 1976.

Analysis of the data available for tract selection in Sale CI provides little assurance that the best tracts were selected for leasing. Industry nominations continue to be the predominant factor influencing the Department's tract selection. Much of the area considered for lease was inadequately examined, and tracts were included in the sale despite their apparent low promise of resources. The present program leases land on the basis of minimal geologic information, and the Department of the Interior has not made significant efforts to obtain additional geologic knowledge through stratigraphic drilling. Although the oil industry paid a significant amount of capital for leasing rights to Sale CI tracts, there is no assurance that energy resources will be found or that fair market value was achieved.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of the Interior should direct a geological exploration program with a systematic plan for appraising OCS oil and gas resources which would identify the level of stratigraphic drilling necessary to provide a minimal level of data. The Secretary should then encourage private industry to explore areas identified in the plan and share with Interior the information developed. If any data are still needed, Interior should take the necessary actions to obtain it. The Geological Survey and Bureau of Land Management should be required to obtain the necessary information to make reliable tract values before lease. The Department should then offer for lease only those areas for which it has collected and analyzed sufficient information to identify where the resources are, their estimated value, and potential for development.

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