Question: MMS is anticipating receipt of $4.4 billion from rents, bonuses, and royalties in fiscal year 1989. Of this amount, royalty receipts are estimated to be $3.2 billion.

On what basis is the MMS anticipating this increase in fiscal year 1989?

How will this number be impacted if a moratorium is put

in place on sale #91 in Northern California?

What is the impact of a moratorium on lease sale #96 in the North Atlantic?

Answer: The estimated increase of $1.25 billion, from $3.2 billion in FY 1988 to $4.4 billion in FY 1989 in total OCS receipts is, in part, due to projected increases of $98 million in rents and bonuses and $233 million in royalties. The projected increase in FY 1989 in OCS rents and bonuses is mostly attributable to more sales scheduled for that year which include three Gulf of Mexico sales and two California sales, one of which was subsequently delayed into the next fiscal year. The projected increase in FY 1989 in OCS royalty receipts is attributable to projected increases in oil and gas prices and production.

In addition, the FY 1989 President's Budget assumes resolution in FY 1989 of the Section 7 boundary dispute with the State of Alaska. The Budget assumes that the courts will rule in favor of the Federal Government, which would allow the remaining escrowed funds of approximately $918.5 million, to be deposited to the Federal Treasury. The FY 1988 budget assumes no payout of escrow funds to the Federal Treasury.

The estimated $4.4 billion from OCS rents, bonuses, and royalties in FY 1989 would be reduced by $125 million if a moratorium is placed on Sale 91, and $10 million if a moratorium is placed on Sale 96.

Question: What is the status of the discussions on the resolution of areas of conflict in lease sale #96 in the North Atlantic? Has MMS decided to go forward with a study by the National Research Council despite opposition from members of the New England Congressional delegation and the environmental community?

Is MMS considering a delay in this lease sale until these problems can be resolved?

Answer: Interior has been working steadily toward a resolution of conflicts concerning leasing in the North Atlantic in general, not just as they pertain to lease Sale 96. In June 1987, Interior published a Federal Register Notice requesting comments on the initiation of talks to resolve the issues underlying the moratorium. Upon consideration of the responses to Interior's Notice, Secretary Hodel proposed a two phase process of fact-finding and policy discussions. In the first phase, the National Research Council would establish a committee of technical experts, well respected in their fields, to examine this issue. In the second phase, the committee's report would be the starting point for discussions between the Governors of the North Atlantic States or

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their designees, policy officers of the Department of the Interior, and other affected parties.

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In January, February, and March of 1988, Interior held a variety of meetings with representatives of the North Atlantic Governors, Members of Congress and their staffs, the oil and gas industry, commercial fishermen, and environmental groups. The representatives of these groups indicated their interest in working with us to find an approach to resolving this issue. the most recent meeting, on March 22, several of the concerned parties suggested the formation of a small, representative working group to draft a proposal. Interior is exploring ways to implement that approach. Interior will continue to consult with the full range of parties in seeking to define further and implement a mutually acceptable approach.

Our December 17, 1987, request for the NRC to perform a technical study still stands. We believe the study will be helpful regardless of the outcome and timing of discussions on conflict resolution.

Upcoming lease Sale 96, is still scheduled for February 1989. moratorium area has been excluded from this sale.

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Question: The four regional MMS offices maintain information for each lease until that lease is terminated.

Does MMS utilize this information in verifying the accuracy of lease information in the Auditing and Financial System?

Answer: Yes. The RMP receives a copy of the lease document from the regional office after a lease is issued. The regional or district offices also forward any lease updates affecting royalty collections during the life of the lease. The OCS Information System is also used by RMP to verify the accuracy of lease information in the Auditing and Financial System, and the Production Accounting and Auditing System.

Question: How many inspectors does MMS employ to assure compliance with any required mitigation measures associated with each lease?

Answer: The MMS employs 69 Petroleum Engineering Technicians who inspect offshore facilities for compliance with the laws, regulations, orders, and other requirements imposed upon lessees on the Outer Continental Shelf.

Question: MMS has participated in a negotiated rulemaking process to revise its OCS air quality rules for facilities adjacent to California.

What amount of funding is required in Fiscal Year 1989 in support of this effort?

How many years has MMS been working on revising these air quality rules? Answer:

A Notice of Proposed Rulemaking is planned to be published in the Federal Register sometime in June 1988. We expect the discussions with the parties

to the negotiated rulemaking process to continue during the comment period for the Notice. A final rulemaking is scheduled for publication late in 1988.

No funding for contractual services is required in Fiscal Year 1989 to support this effort.

Following discussions in 1984 between the MMS and the California Air Resources Board, the air quality rulemaking for the California OCS commenced with the publication of an Advance Notice of Proposed Rulemaking on January 7, 1985. The State of California recommended that the MMS consider a negotiated rulemaking process to develop a revised rule. This process has been a very helpful and valuable data gathering component of the overall rulemaking

process.

Question: Provide examples of leases which have been revised based on MMS's monitoring efforts through the environmental studies program.

Answer: Based largely on the Environmental Studies Program- (ESP)- funded aerial survey data on bowhead whales' distribution, abundance, and migration patterns, the initial 7-month long seasonal drilling restriction (SDR) attached to Alaska Beaufort Sea Sale BF leases in 1979 was shortened in 1982 to 2 months. In 1986, additional survey data facilitated the NMFS agreeing to the MMS waiving the SDR for exploratory drilling inside the Beaufort Sea Barrier Islands.

Limited bowhead distributional and abundance information available in 1979 caused NMFS to conclude in its Endangered Species Act, Section 7 Biological Opinions, that potential oil spills and sale-related industrial noise would jeopardize the continued existence of bowhead whales. The opinions presented the longer term SDR as the way to minimize or eliminate such jeopardy.

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Subsequent ESP-funded studies and other information on oil spill risk and effects of noise on bowheads convinced NMFS in 1987 that sale-related activities likely from Sales 97 and 109--proposed, respectively, for Beaufort and Chukchi Seas--would not jeopardize these whales, except possibly in their narrow spring migration corridor. This conclusion eliminated the need for a blanket SDR, such as those imposed for earlier Beaufort Sea sales.

In the Gulf of Mexico, several MMS-funded studies monitoring the dispersion of muds and cuttings have led to changes in lease sale biological stipulations intended to protect topographic high areas and hard bottom communities.

Question: What studies are on the top of the priority list for the regional studies plans for the Pacific, Alaska and the North Atlantic?

Answer: The National Studies List is organized into two groups. The first group consists of all projects that were begun in previous years and for which a contractual obligation exists to continue the effort. These studies are unranked but appear at the top of the NSL because of the importance of maintaining project and program continuity. Studies continuing under the NOAA OCSEAP are included in this group in recognition of the unique nature and magnitude of our relationship with NOAA in Alaska. The second group consists of all new procurements and interagency agreements. Studies in this group are ranked in priority order according to the established ranking criteria. Within

a particular rank, there is no attempt to prioritize studies, unless that rank straddles the funding threshold.

With that background, the following ranked studies are identified based on their position on the National Studies List as determined by the ranking criteria and the recommended priority contained within the respective regional studies plan:

Monitoring Distribution of Arctic and Chukchi Whales (Alaska)

Air Quality Modeling for Central California OCS Sale (Pacific)

Atlantic Information Transfer Meeting (North Atlantic)

It should be noted that there are no studies devoted exclusively to the North Atlantic. The ITM will address all Atlantic planning areas.

Question: What is the role of the scientific committee in setting priorities for the environmental studies program?

Answer: The scientific committee contributes to the setting of priorities in two ways. First, the scientific committee reviews the draft regional studies plans (prior to the development of the National Studies List) for technical and programmatic adequacy. Their comments have, in the past, addressed the priority ranking and technical content of particular studies, and as a result, relative priorities have been changed and objectives/methods have been modified. Second, the scientific committee may identify particular issues that should receive increased or decreased emphasis in the Environmental Studies Program. This could result in the shifting of priorities as certain types of studies are eliminated. An example of this would be the increased emphasis that has been given to process oriented and long-term monitoring studies and the de-emphasis of broad based characterization or descriptive studies. Comments made by the scientific committee carry significant weight in the national review of proposed studies, and must be adequately responded to or resolved before a regional study is approved.

Question: When will the National Academy of Sciences complete its review of the MMS environmental studies program?

Answer: The MMS contract with the National Academy of Sciences to review the Environmental Studies Program was awarded in June, 1986 and is scheduled for completion in September, 1990. A report on the Physical Oceanography component should be available by the end of 1988, and a report on the Ecology component should be available by the end of 1989.

Question: What amount of funding is included in fiscal year 1989 for the OCS Advisory Board?

Answer: $323,000 is requested in FY 1989 for the activities of the OCS Advisory Board. This includes funding for 2 full Policy Committee meetings and 4 subcommittee meetings, 12 Regional Technical Working Group meetings, and 3 Scientific Committee meetings.

Question: The Interior Committee has recommended that no funding be included in fiscal year 1989 for the promulgation of regulations under section 8(k) of the OCS Lands Act which deals with the leasing of hard rock minerals.

What is the MMS opinion on why it should be involved in the leasing of hard-rock minerals as opposed to the National Oceanic and Atmospheric Administration?

Answer: First, the MMS has the legal authority to lease all minerals on the OCS, while NOAA has no such legal authority. NOAA's authority only covers manganese nodule types of deposits in the deep seabed beyond U.S. jurisdiction. Second, the DOI has been involved in non-energy minerals leasing since 1954. In 34 years, DOI has assembled a considerable body of technical data and the expertise for ocean minerals resource evaluation and leasing. This includes a vast amount of geologic information, oceanographic, biologic, and ecologic information--much of which has been published--and a staff experienced in geology, mineral development, environmental protection and resource economics. Seven solid minerals lease sales have been held under the Outer Continental Shelf Lands Act during that time and generated over $50 million in revenue from bonus bids. The most recent sale, for salt and sulphur, occurred in February 1988.

Since 1983, MMS has increased its attention to non-energy minerals other than salt and sulphur to respond to increasing demand for, and diminishing supplies of, important domestic onshore mineral deposits such as sand and gravel and phosphate. In response to growing interest, MMS has established 5 joint State/Federal task forces in Hawaii; the Atlantic, Gulf, and Pacific Coast areas; and a cooperative effort with the State of Alaska to evaluate specific areas of offshore mineral leasing potential. Additional task force arrangements are under consideration.

The MMS has been operational in offshore leasing activity for over 30 years. The marine mining program is part of an existing organizational and procedural framework for leasing that would have to be recreated by another agency should hard minerals leasing be shifted out of the Department of the Interior. For continuity, efficiency, and the greatest utilization of available data and experience, the hard minerals leasing program should remain in DOI.

Question: What progress is MMS making in their cooperative study with the Smithsonian on the Panama oil spill?

- What amount of funding is included in fiscal year 1989 for continuation of this effort?

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Answer: The Smithsonian Institution has two studies contracts cooperative studies) with the MMS for research on the Panama oil spill. MMS funded a short-term study of the effects of the April 1986 spill in Panama. This one-year study by the Smithsonian Tropical Research Institute (STRI) is being followed by a long-term effects study which the MMS began funding in June 1987. The STRI presented results of the short-term study at the 1987 Oil Spill Conference in Baltimore.