The Minerals Management Service (MMS) has proposed a rule that would change reporting procedures for geological and geophysical (G&G) processed data. Currently, G&G companies provide data to MMS with strict guarantees of confidentiality. G&G companies then provide oil companies access to data through nonexclusive licenses. The companies are then free to manipulate the data as necessary. The proposed rule extends MMS authority to request G&G processed data from any producer at any time. The Independent Petroleum Association of America and Independent Association of Geophysical Contractors oppose the rule, explaining that "G&G data is highly sensitive and competitive information and should not be made public at the risk of corrupting thousands of licensing agreements. The process could also threaten the OCS lease program itself."
Sen. John Breaux (D-LA), an original author of the Outer Continental Shelf Lands Act (OCSLA) of 1972, joined with Sen. Kay Bailey Hutchinson (R-TX) to issue a colloquy during the Senate Interior Appropriations floor debate on their opposition to the rule. Sen. Hutchinson expressed her disappointment that "MMS is threatening to implement regulations without adequate discussions between the agency, industry, and the original authors of the OCSLA." Sen. Breaux commented that the rule is "contrary to the spirit and intent of what we were trying to accomplish in 1972." He went on to state that the adoption of the rule will cause the renegotiation of thousands of existing licenses. During that process, no data can be licensed and no exploration will occur. The full text of Breaux and Hutchinson's statement is available on Thomas, the Library of Congress website.
Sources at MMS argue that the new rule does not change reporting procedures but merely clarifies what data can be obtained by MMS, which has had the right to obtain data transferred to a third party since 1976. Such data have historically represented only a small fraction of the total data obtained by the agency. MMS and the companies disagree over whether license agreements with G&G companies represent such a transfer. The companies have argued that the new rule will require changes to most license agreements with G&G companies and could create confidentiality problems, both assertions that MMS denies.
MMS plans to move ahead as planned with publication of the new rule, which has been the subject of several public meetings since itwas proposed this past February. The Interior Appropriations bill for fiscal year 1998, which provides funds for MMS, may include language on the need for MMS to obtain these data to ensure fair market value but emphasizing the need to pay attention to the data's proprietary nature. The MMS web site includes public comments and the proposed rule in PDF format.
Please send any comments or requests for information to AGI Government Affairs Program.
Contributed by Kasey Shewey, AGI Government Affairs
Posted September 24, 1997; Last updated 10-11-97