Rational Exploration and Development of Outer Continental Shelf Resources

Improved policies and procedures are needed for the rational exploration and development of the Outer Continental Shelf (OCS) resources. An assessment of the first frontier sale -- OCS Sale 35 off the California coast -- revealed that the Department of the Interior's tract selection and evaluation process was not reliable, and bidding was not generally competitive. In addition, the prerelease tract evaluation used in making accent/reject decisions on industry bids were based on inadequate data. The Department's current revenue estimating process for OCS sales is based on inadequate information; it often includes overly optimistic estimates; and it relies on various errors to cancel each other out and yield a reasonable estimate. Under the present leasing system, the Federal Government is frequently committed to lease before it has sufficient information to make intelligent choices. The Department of the Interior should: direct a geological exploration program which would provide for the systematic development and implementation of a plan for appraising OCS oil and gas resources, encourage private industry to conduct the drilling identified in the plan, and take necessary steps to encourage industry to obtain further information after the tract selection process is completed, and offer for lease sale only those areas for which sufficient information has been collected and analyzed.