Scientific Research and Offshore Energy Development Walter Cruickshank, Deputy Director Minerals Management Service Energy Policy and Science Research

Scientific Research and Offshore Energy DevelopmentScientific Research and Offshore Energy Development

Walter Cruickshank, Deputy DirectorWalter Cruickshank, Deputy DirectorMinerals Management ServiceMinerals Management Service

Energy Policy and Science Research Energy Policy and Science Research 2005 American Geological Institute Leadership Forum2005 American Geological Institute Leadership Forum

Securing Ocean Energy and Economic Value for AmSecuring Ocean Energy and Economic Value for Americaerica

22

Who is MMS?Who is MMS?

The Minerals Management Service manages The Minerals Management Service manages

the mineral resources on the Outer Continental the mineral resources on the Outer Continental

Shelf and Federal and Indian mineral revenues Shelf and Federal and Indian mineral revenues

to enhance public and trust benefit, promote to enhance public and trust benefit, promote

responsible use, and realize fair value.responsible use, and realize fair value.


33

Economic Benefits ~ $146 billionEconomic Benefits ~ $146 billion

Mineral Revenue Distribution: 1982 - 2004[numbers are in billion $$]

3.2 19.9

10.3

4.1

3.2

13.3

89.3

3.2Historic PreservationFundLand & WaterConservation Fund

Reclamation Fund

American Indian Tribes(41) & 30,000 Allotees

State Share (Offshore)

State Share (Onshore)

U.S. Treasury

SPR (value of RIK)


44

OCS Quick FactsOCS Quick Facts

• Responsible for 1.76 billion OCS Responsible for 1.76 billion OCS

acresacres

• <10 percent offered for lease<10 percent offered for lease

• 43 million acres leased43 million acres leased

• 8,300 leases; 1,800 producing 8,300 leases; 1,800 producing

leasesleases

• 30% of domestic oil; 21% natural 30% of domestic oil; 21% natural

gasgas

• 4,025 production platforms4,025 production platforms

• 33,000 miles of pipeline33,000 miles of pipeline

• 42,000 OCS personnel42,000 OCS personnel

• 125 operating companies125 operating companies

• $6 billion annual revenue$6 billion annual revenue


55

0

2

4

6

8

10

12

14

16

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Year

Billion C

ubic

Feet/

Day

Deepwater GasShallow-water Deep GasShallow-water Gas

Rest of U.S. 21% Gulf of Mexico

Domestic Gas Production

Gulf of Mexico Natural Gas ProductionGulf of Mexico Natural Gas Production


66

0

500

1000

1500

2000

2500

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Year

Th

ou

sa

nd

Ba

rre

ls/D

ay

Deepw ater Oil

Shallow -w ater Oil

Rest of U.S. 30% Gulf of Mexico

Domestic Oil Production

Gulf of Mexico Crude Oil ProductionGulf of Mexico Crude Oil Production


77

Deep and Ultra-Deep (2004) Deep and Ultra-Deep (2004) • Deepwater (>1,000 ft WD)Deepwater (>1,000 ft WD)

– 14 new deepwater startups14 new deepwater startups

– 15 deepwater discoveries 15 deepwater discoveries

• Ultra-Deep (>5,000 ft WD)Ultra-Deep (>5,000 ft WD)

> 7,000 feet WD (1.3 miles)7,000 feet WD (1.3 miles)

> 150 miles from shore150 miles from shore

– New plays with large New plays with large

geographic extent geographic extent

– New field wildcat success New field wildcat success

rate, 58% (7 of 12)rate, 58% (7 of 12)

– Resource estimate >1 billion Resource estimate >1 billion

BOEBOE


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Resource AssessmentResource Assessment• Provide a basic foundation for Provide a basic foundation for

leasing decisionsleasing decisions

– Identify oil and gas playsIdentify oil and gas plays

– Estimation of resourcesEstimation of resources

– Identify prospective areasIdentify prospective areas

– Determine bid adequacy Determine bid adequacy

• MMS G&G database includes MMS G&G database includes

more thanmore than

– 1.7 million mi of 2D seismic data1.7 million mi of 2D seismic data

– 33 thousand OCS blocks33 thousand OCS blocks

of 3D seismic dataof 3D seismic data

– 100,000 well logs100,000 well logs

EnvironmentalEnvironmental

StudiesStudies

Pollutant Transport (air & Pollutant Transport (air & water)water)

Biological Resource Biological Resource Characterization (habitat & Characterization (habitat &

behavior)behavior)

Marine Environmental Marine Environmental Monitoring Monitoring

Fates and EffectsFates and Effects

Socioeconomic EffectsSocioeconomic Effects

BiotechnologyBiotechnology

Invasive SpeciesInvasive Species

Technology Technology Assessment Assessment

& Research& ResearchReduce EmissionsReduce Emissions

Blowout PreventionBlowout Prevention

Structural RemovalStructural Removal

Corrosion Corrosion Prevention Prevention

Oil Spill ResponseOil Spill Response

Leak DetectionLeak Detection

Marine RisersMarine Risers

Composite Composite MaterialsMaterials

An integrated response to meet challenges related to leasing, An integrated response to meet challenges related to leasing, exploration & development of oil & natural gas resources on the OCSexploration & development of oil & natural gas resources on the OCS

LeasingLeasing

ExplorationExploration

ProductionProduction

DecommissioningDecommissioning

MMS-Funded ResearchMMS-Funded Research

Since 1982, about $540 million spent on research; more than 1400 research projectsSince 1982, about $540 million spent on research; more than 1400 research projects


1010

Extreme Environmental ConditionsExtreme Environmental Conditions

• Responding to Hurricane IvanResponding to Hurricane Ivan– Review MODU loss of station Review MODU loss of station

keeping and mooring standardskeeping and mooring standards

– Review platform rig skiddingReview platform rig skidding

– Develop database of wind, sea Develop database of wind, sea state and currentsstate and currents

– Assess pipeline damage to Assess pipeline damage to determine adequacy of pipeline determine adequacy of pipeline standardsstandards

– Assess platform damage to Assess platform damage to validate design standardsvalidate design standards

– Assess deep water riser spacing Assess deep water riser spacing and the potential for riser and the potential for riser collisionscollisions


1111

Methane HydratesMethane Hydrates• MMS Resource AssessmentMMS Resource Assessment

• Planned Projects – determine Planned Projects – determine feasibilityfeasibility

– Chevron/DOE/DOI Joint ProjectChevron/DOE/DOI Joint Project• Adapt coring technologyAdapt coring technology

• Boreholes – March 2005Boreholes – March 2005

• ““Ground truth” seismic data & Ground truth” seismic data & modelsmodels

• Initial focus: Safety of existing Initial focus: Safety of existing facilitiesfacilities

– Westport Technology InternationalWestport Technology International• Flow SimulationFlow Simulation

• Future Production? – GOMFuture Production? – GOMAdvantagesAdvantages

– Infrastructure – existing pipeline Infrastructure – existing pipeline networknetwork

– Regionally favorable conditionsRegionally favorable conditionsfor accumulationsfor accumulations

– High methane flux rateHigh methane flux rate


1212

Deepwater CirculationDeepwater Circulation

• Loop current and eddiesLoop current and eddies

– Can force drilling interruptCan force drilling interrupt

– Pose a safety concernPose a safety concern

• MMS NTL and Industry MMS NTL and Industry

agreement to monitor and agreement to monitor and

share data via internetshare data via internet

• Meets Ocean Commission Meets Ocean Commission

recommendations to establish recommendations to establish

IOOSIOOS


1313

Integrated Ocean Observing System (IOOS)Integrated Ocean Observing System (IOOS)

-

•

National SystemNational System

• Satellite remote sensingSatellite remote sensing

• Reference, sentinel Reference, sentinel

stationsstations

• Link to global moduleLink to global module

• Data standards & Data standards &

exchange protocolsexchange protocols

National Federation of Regional SystemsNational Federation of Regional Systems

Regional SystemsRegional Systems• Land based inputsLand based inputs• State & regional State & regional

prioritiespriorities• Greater resolutionGreater resolution• More variablesMore variables


1414

GovernmentGovernment for the for the

public, which public, which should beshould be

made availablemade available for for

expeditious and orderly expeditious and orderly

development, development, subject to subject to

environmental environmental

safeguardssafeguards, in a manner , in a manner

which is which is consistent with consistent with

the maintenance of the maintenance of

competitioncompetition and other and other

national needs . . . . "national needs . . . . "

Decision Making Based on ScienceDecision Making Based on Science

""It is hereby declared to be the policy of the United States that . . . the It is hereby declared to be the policy of the United States that . . . the

Outer Continental Shelf is a vital national resourceOuter Continental Shelf is a vital national resource held by the Federal held by the Federal

Outer Continental Shelf Lands Act as AmendedOuter Continental Shelf Lands Act as Amended

Documents

Scientific Research and Offshore Energy Development Walter Cruickshank, Deputy Director Minerals Management Service Energy Policy and Science Research