MMS Director Calls for Investment in Offshore Research, Software

If the United States is to continue to satisfy its ever-growing need for energy, it must be willing to invest in research and development of new sources, Bush administration officials said yesterday.

"Let's face it, the easily recoverable oil is gone," Randall Luthi, director of the Minerals Management Service, told the House Energy and Mineral Resources Subcommittee yesterday.

President Bush has made mineral resources development in the Outer Continental Shelf a priority in his fiscal 2009 budget request, with the U.S. Geological Survey getting $7 million to map and monitor the extent of the United States' claim. MMS's Offshore Energy and Minerals Management program would get $164 million in fiscal 2009.

The budget seeks an increase of $1 million to support MMS's offshore renewable energy leasing program. The 2005 Energy Policy Act put MMS in charge of offshore renewable energy development, and the agency is hoping to complete rules by next January to govern the leasing program.

MMS has had three offshore lease sales over the last two years that have generated billions of dollars in bids, most recently earlier this month when the agency accepted $2.6 billion in winning bids to companies seeking to drill for oil and natural gas in Alaska's Chukchi Sea.

Luthi said MMS is taking steps to improve the return on natural resources leases, including requesting $1.1 million for industry-comparable computer software that will help evaluate the adequacy of lease sale bids while ensuring resources are developed with sound conservation principles.

"I believe we are lagging behind and this software will bring us up to speed," Luthi said.

But improvements like these are unlikely to make a difference when the administration is proposing cuts to other minerals programs, committee members said.

Subcommittee Chairman Jim Costa (D-Calif.) noted that the budget calls for reducing USGS's Minerals Resources Program by $25.4 million to $26.3 million. The program is responsible for providing resource assessments on mineral production, consumption and environmental effects that serve as the baseline for the government's geological data.

"It was a difficult choice," said USGS Deputy Director Robert Doyle. The cut, like others, were part of a larger effort to focus the agency's budget on key administration priorities while working toward the administration's goal of reducing the deficit, he said.

USGS will still produce studies under the program but estimated there would be only about 70 studies completed per year instead of the normal 100, Doyle added.

"The bottom line is you're going to be doing less with less," said Costa.

Company: Minerals Management Service (MMS) more info
 - Obama Names New Head of MMS (Jun 15)
 - Abbey Implements New Drilling Requirements (Jun 07)
 - MMS Chief Resigns (May 27)