1120 G Street, NW, Suite 900, Washington, DC 20005 Tel 202-347-6900 Fax 202-347-8650 www.noia.org

washington reportvolume XXXIv, Number 10 November 28, 2006

NOIA’s mission is to secure

reliable access to the nation’s

valuable offshore energy

resources in order that they

may be developed, produced

and supplied in an environ-

mentally responsible manner.

in this issue

NOIA members gathered at The Breakers in Palm Beach, Florida from November 2-4, 2006 for the NOIA Fall Meeting.

Over a three day period, members enjoyed an opportunity to interact with colleagues from across the industry’s many sectors and also hear from leading political and industry speakers. In addition, the Fall Meeting afforded a chance to enjoy some tennis, fishing, and golf. (Bob Hogan of AmerCable set the standard for competi-tion on the course by sinking a remarkable hole-in-one on The Breakers’ 13th hole.)

political commentators

The conference was about more than just fun and games, however. Over the course of a series of general sessions, NOIA mem-bers were given the chance to listen to pre-election prognostication and analysis from some of the nation’s best analysts.

Neil CavutoThe Fall Meeting kicked off on Thurs-day evening with a dinner speech by Neil Cavuto, Anchor and Managing Editor of Business News at Fox. Cavuto offered his thanks to the industry for doing what

noia members gather in palm beach for 2006 fall meeting

mms creates new royalty policy committee

continued on page 4

continued on page 3

Assistant Secretary of the Interior for Land and Minerals Management C. Ste-phen Allred recently announced the for-mation of an independent panel to review and provide advice to the department on aspects of mineral revenue collection from federal and Indian lands.

The new panel will operate under the aus-pices of the Royalty Policy Committee, an independent advisory board appointed by the Interior Secretary to advise him on royalty management issues and other min-eral-related policies.

“Recently there has been much interest regarding the accuracy and effectiveness of the Minerals Revenue Management pro-gram within the Minerals Management Service,” Allred wrote in a letter to incom-ing Royalty Policy Committee Chairman Daniel Riemer. “We have decided that a re-view of the procedures and processes sur-rounding management of mineral revenue at the Department of Interior is in order.”

Specifically, Allred asked the new panel, called the Subcommittee on Royalty Man-agement, to review:

NoIA members Gather in Palm beach for 2006 Fall meeting ... p. 1

mmS Creates New royalty Policy Committee ... p. 1

A New lineup Card Awaits the opening of the 110th Congress ... p. 2

Charlie matthews Named “Industry Pioneer” by offshore energy Center ... p. 3

NoIA 2006 Fall meeting Photos ... p. 12

mmS Conducts Public Hearings, Nears Comple-tion of 2007-2012 5-Year leasing Program ... p. 16

oCS legislation Possible before Year-end ... p. 18

2

noia staff

Tom FryPresident

Franki Stuntz Chief Administrative Officer and Director, Member Development

Kim Harb Director, Policy and Government Affairs

Nolty Theriot Director, Congressional Affairs

michael Kearns Director, Public Affairs and Editor, Washington Report

Jeff Krauss Director, External Affairs

Ann Chapman Meetings Manager

lauren JordanAdministrative Assistant and Assistant to the President

With the Democratic takeover of the House, ranking members are preparing to take over the gavels from Republicans. The following is the most likely lineup of new committee chairmen:

C Agriculture: Rep. Collin Peterson, D-Minn., takes over from Rep. Bob Goodlatte, R-Va.C Appropriations: Rep. David Obey, D-Wis., replaces Rep. Jerry Lewis, R-Calif.C Armed Services: Rep. Ike Skelton, D-Mo., takes over from Rep. Duncan Hunter, R-Calif.C Budget: Rep. John Spratt, D-S.C., replaces Rep. Jim Nussle, R-Iowa, who left the House to run for governor.C Education and the Workforce: Rep. George Miller, D-Calif., replaces Howard (Buck) McKeon, R-Calif.C Energy and Commerce: Rep. John Dingell, D-Mich., takes over from Rep. Joe Barton, R-Texas.C Ethics: Rep. Howard Berman, D-Calif., replaces Rep. Doc Hastings, R-Wash.C Financial Services: Rep. Barney Frank, D-Mass., replaces Michael Oxley, R-Ohio, who is retir-ing.C Government Reform: Rep. Henry Waxman, D-Calif., takes over from Rep. Tom Davis, R-Va.C Homeland Security: Rep. Bennie Thompson, D-Miss., replaces Rep. Peter King, R-N.Y.C House Administration: Rep. Juanita Millender-McDonald, D-Calif., replaces Rep. Vernon Ehlers, R-Mich.C Intelligence: Rep. Jane Harman, D-Calif., is the ranking member, but she may not be reappointed to the panel by Minority Leader Pelosi. The other top candidates include Reps. Alcee Hastings, D-Fla., and Silvestre Reyes, D-Texas. Rep. Peter Hoekstra, R Mich., is the outgoing chairman.C International Relations: Rep. Tom Lantos, D-Calif., takes over from Rep. Henry Hyde, R-Ill, who is retiring.C Judiciary: Rep. John Conyers, D-Mich., replaces Rep. James Sensenbrenner, R-Wis.C Resources: Rep. Nick Rahall, D-W.Va., takes over from Rep. Richard Pombo, R-Calif.C Rules: Rep. Louise Slaughter, D-N.Y., replaces Rep. David Dreier, R-Calif.C Science: Rep. Bart Gordon, D-Tenn., replaces Rep. Sherwood Boehlert, R-N.Y., who is retiring.C Small Business: Rep. Nydia Velazquez, D-N.Y., takes over from Rep. Donald Manzullo, R-Ill.C Transportation and Infrastructure: Rep. James Oberstar, D-Minn., replaces Rep. Don Young, R-Alaska.C Veterans Affairs: Rep. Bob Filner, D-Calif., replaces Rep. Steve Buyer, R-Ind.C Ways and Means: Rep. Charles Rangel, D-N.Y., replaces Rep. Bill Thomas, R-Calif., who is retiring. In the next issue of the Washington Report, we will profile the incoming Chairmen of the Senate Cmmittees.

a new lineup card awaits the opening of the 110th congress

washington report

3

• The extent to which existing pro-cedures and processes for reporting and accounting for federal and Indian mineral revenues are sufficient to ensure that the Minerals Management Service receives the correct amount. • The audit, compliance and en-forcement procedures and processes of the Minerals Management Service to deter-mine if they are adequate to ensure that mineral companies are complying with existing statutes, lease terms, and regula-tions as they pertain to payment of royal-ties. • The operations of the Royalty in Kind program to ensure that adequate policies, procedures and controls are in

place to ensure that decisions to take fed-eral oil and gas royalties in kind result in net benefits to the American people.

The subcommittee will conduct its review over a six-month period and then provide its final findings and recommendations to the full Royalty Policy Committee and the Secretary of the Interior.

NOIA will monitor the work of the Com-mittee and represent the interests of its member companies. If you have any ques-tions about the Royalty Policy Committee, please contact Kim Harb at (202) 347-6900 or kim@noia.org.

mms creates new royalty policy committee (continued from p. 1)

The Galveston-based Offshore Energy Center named former NOIA President Charlie Matthews one of its Industry Pio-neers for 2006. According to the Offshore Energy Center, “When individuals distin-guish themselves in such a way that they stand out clearly as leaders in the birth of a nation, movement or industry, they are recognized as pioneers. The oil and gas industry is replete with such individu-als whose lives have become the legends of our time. Whether through their vi-sion, their drive, their business acumen, their ability to search, to innovate or lead the way, these people form the character of the industry and become its heritage. They are the industry pioneers.”

Charlie Matthews, a native Texan, served as president of the National Ocean Indus-tries Association (NOIA) from its founding in 1972, until his retirement in 1993. Un-der his leadership during those 21 years, the organization’s membership grew from the founding 35 companies to over 300 institutions. His extensive knowledge of the workings of government firmly estab-lished NOIA’s credibility before congress and regulatory bodies, and the excellent reputation that it enjoys to this day. His favorite expression, clearly based on his decades of experience in dealing with gov-ernment, went straight to the point: “the only time the people are safe is when con-gress is out of session.”

charlie matthews named “industry pio-neer” by offshore energy center

Charlie Matthews, NOIA President

from 1972 - 1993 was named

2006 Industry pioneer” by the

Offshore Energy Center.

4

is, “vitally important to the continued strength of the economy and prosperity of the nation.”

The bulk of his comments, however, made the case that the media as a whole are purveyors of negativism, continually speaking of shortcomings and failures without adequately communicating the good news as well. Cavuto cited the suc-cess stories of the nation’s economy – low unemployment, strong Gross Domestic Product growth, high corporate earnings – yet argued that these factors have not translated into a positive sense among the population because they have not been ad-equately promoted by the mainstream me-dia. Speaking specifically to the offshore industry, he encouraged NOIA members to continue to work to communicate the importance of Outer Continental Shelf production as a way to counter the nega-tive spin that tends to dominate energy media coverage.

Kellyanne ConwayThe following morning over breakfast, NOIA members heard from pollster Kel-lyanne Conway. Conway had last spoken to the NOIA membership at the 2004 Fall Meeting, where her prognostications on the outcome of the election later that week were closer to the final outcome than any other pundit in Washington, earning her the Washington Post’s Crystal Ball Award. At this year’s gathering, Conway provided more than a simple numerical prediction, opting instead to deconstruct the poll results she has seen and offer the

following general insights into the mind of the voter in the 2006 elections season:

Conway describes an electorate where consistency is no longer viewed as a good thing anymore and where the Iraq war has become a major liability. “Iraq is the new abortion,” said Conway. “It has become the one issue where vir-tually everyone has decided they support or oppose it and there is no room left for dialogue. People are simply entrenched on opposing sides.”

Conway also pointed to voter anger over a perceived lack of progress on immigration and frustration among baby boomers over the complexity of the Medicare Prescrip-tion Drug Plan that many are navigating as they help out older parents. In addi-tion, Conway pointed out that there is a deepening divide within the Republican Party, with fiscal conservatives increas-ingly speaking out against what they see as a leadership beholden to spending lar-gesse and rampant earmarking.

Conway did offer a prediction for the elec-tion that was not as on-point as it had been in 2004, calling for the Republicans to hold onto the House and Senate by ra-zor thin margins. She did accurately pre-dict, however, that we would not know the full results until well after election day as some races would be hotly contested and challenged to recounts. As of this writ-ing, five seats in the House of Representa-tives remain undecided.

noia 2006 fall meeting (CONtINuED fROM P. 1)

Neil Cavuto, Managing

Editor - Business News, fox

News Channel

Kellyanne Conway, President,

the Polling Company

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5

Mara LiassonBreakfast the following morning also fea-tured a dose of political analysis, this time from Mara Liasson, Political Contributor for Fox News and National Public Radio. Liasson gave a comprehensive run-down of each of the races that had captured na-tional attention, both for the Senate and the House of Representatives, as well as for key Governorships around the coun-try.

Despite varying issues in each specific race, Liasson indicated that the overall, national electorate seemed to be broken down into a competition between Struc-tural Forces versus Anti-Republicanism. Structural forces are mechanisms that had been put in place to secure the sta-tus quo, and include redistricting/gerry-mandering efforts to create “safe” seats for a party, massive Get Out the Vote op-erations that micro-target critical swing voters, and the fundraising advantage generally enjoyed by incumbents. Repub-lican campaign officials tried to build onto these structural forces an additional chal-lenge to the voters to fear the prospect of Nancy Pelosi as Speaker of the House, to attempt to re-link the Iraq War and the War in Terror in the minds of the voters.

On the other side of the equation, Lias-son noted a Democratic machine that was effectively nationalizing the full range of local elections, turning each smaller race into a referendum on the war in Iraq and the scandals that had plagued the Capital throughout 2006. The challenge, as she described it, was to determine whether

this sense of anti-incumbency roiling in the electorate would become enough of a wave to overwhelm the structural impedi-ments to change that protected the Re-publican Majority.

Tim ReidMoving from the domestic political situ-ation to the international realm, NOIA members also heard from Tim Reid, Washington Correspondent for The Times of London. Reid centered his comments on the perceptions of the United States in the rest of the world, and stated that despite American’s concerns about how they are regarded, the overall feelings for the Unit-ed States in the world at large are quite good. There is a significant body of ill will toward the Bush Administration, but this does not necessarily translate into anti-Americanism, according to Reid.

On a more societal level, Reid notes that Western Europe tends to view America as a society where religion plays an excessive role in public life, while Middle Eastern-ers see America as a nation on a crusade. Despite this, however, Reid concluded that the world still largely follows America’s lead because the U.S. economy is so strong and because of the United States’ contin-ued influence in the major international organizations.

energy forum

NOIA members at the Fall Meeting were treated to more than just political analy-sis. The industry’s overall direction and future was addressed during an Energy Forum featuring four NOIA members

noia 2006 fall meeting (CONtINuED fROM P.4)

Mara Liasson, Political Cor-

respondent, fox News and

National Public Radio

tim Reid, Washington Cor-

respondent, the times of

London

6

speaking about their companies’ priori-ties and moderated by Jon Marshall, CEO of GlobalSantaFe and Immediate Past Chairman of NOIA.

Mark Pease of Anadarko spoke first, stressing Anadarko’s commitment to con-tinued operations in the Gulf of Mexico and outlining the company’s formula for success.

“Success stems from the combination of Access, Resources and Relationships,” said Pease. Discussing Access, Pease called on companies to engage their em-ployees and retirees in voting in line with their business interests. On Resources, he described the challenge of finding enough rigs to support expanded deepwater activ-ity. Finally, Pease addressed the issue of Relationships, encouraging communica-tion between industry and regulators, as well as greater intra-industry collabora-tion among drillers, producers and service companies to tackle constraints like those on rig availability.

Melody Meyer of Chevron spoke next, or-ganizing her presentation into three cat-egories. First, she emphasized the impor-tance of maintaining and improving upon the culture of safety. While 2005 was the safest year ever, Meyer argued that work still remains to be done. As an example, she described the work of the Joint Con-tractor Symposium, an initiative to define common safety practices and minimum standards for all of Chevron’s contractors. Additionally, Meyer described Chevron’s work on the SAFEGULF Initiative, which

will develop a system of evaluation and certification for offshore workers.

Moving from safety to strategy, Meyer then indicated that Chevron continues to see the Gulf of Mexico as a region with un-tapped potential that will keep its central importance to Chevron’s overall growth strategy. Specifically, Meyer indicated that in addition to the recent finds in the Lower Tertiary portion of the deepwater, Chevron still believes the shelf holds addi-tional resources for future development.

In conclusion, Meyer exhorted fellow NOIA members to remember that, “if you work in the Gulf of Mexico, you must also work in Washington, DC and in Baton Rouge. Political engagement is critical to successful energy development.”

NOIA members next heard from two rep-resentatives of the services sector: Cris Gaut of Halliburton and Jan Rask of The Offshore Drilling Company (TODCO), who described a competitive environment marked by increasing pressure on service companies to become ever-more efficient at delivering successful completions and returning optimal oil and gas recovery from wells.

federal government

perspectives

Lynn ScarlettLynn Scarlett, Deputy Secretary of the Interior, addressed the NOIA membership and discussed a number of key regulatory issues for the offshore industry. Scarlett

noia 2006 fall meeting (CONtINuED fROM P.5)

Jon Marshall, GlobalSantafe;

Mark Pease, Anadarko;

Melody Meyer, Chevron; Cris

Gaut, Halliburton; Jan Rask,

tODCO

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began by acknowledging the important clean-up work the industry accomplished in the Gulf region after last year’s hur-ricanes before turning to the question of access to OCS resources.

Scarlett acknowledged the important con-tributions by the offshore energy sector to the nation, citing the 107 trillion cubic feet of natural gas produced and $110 billion in revenue generated since 1982. Scarlett continued on to note that there remains vast untapped potential on the OCS.

“Scarcity,” Scarlett noted, “is not the prob-lem. Access is.”

Scarlett defined the scope of the access challenge as being driven by perceptions, performance and public will. Industry and government were urged to work on all three of these factors in order to gain further access. She then turned to a dis-cussion of the principal issues to address in order to secure greater access.

First among these was a discussion of the forthcoming 5-Year Leasing Plan for 2007-2012. Scarlett encouraged compa-nies to comment on the Proposed Pro-gram before the completion of the current comment period (which ended on Novem-ber 22) and specifically noted that the pro-posal includes new areas for leasing in the “181 South” and Chukchi Sea regions, as well as plans to consider offshore Virginia should moratoria be reconsidered.

Next, Scarlett described the outcome of the lawsuit settlement between the Min-

erals Management Service (MMS) and the State of Louisiana. The terms of the settlement dictate that no additional lease sales will take place until a new Envi-ronmental Impact Statement is completed that accounts for potential impacts of the hurricanes of 2005 on the marine environ-ment. The lease sale scheduled for March 2007 has been cancelled and that acreage will be added to the lease sale scheduled to take place under the new 5-Year Plan in September 2007. In addition, new En-vironmental Assessments will need to be completed before exploration plans can be approved for leases awarded in Lease Sale 200. Successful settlement of this suit al-lows offshore leasing to move ahead with minimal disruption and forestalls the risk of a protracted dispute shutting down cur-rent offshore activity.

Third, Scarlett discussed the staffing challenges MMS continues to address as a result of last year’s hurricanes. At pres-ent, over 60 technical positions in MMS remain vacant, resulting in a slowdown of necessary permitting. MMS will continue to work hard to minimize any disruptions to company activities offshore.

Scarlett then turned to the ongoing dis-pute over royalty collections, indicating that the new Assistant Secretary for Land and Minerals Management, Stephen All-red, would be taking a fresh look at the entire issue. (See related article on Roy-alty Policy Committee in this issue of the Washington Report.) Scarlett underscored that the Federal Government must act as a reliable business partner – acknowledg-

noia 2006 fall meeting (CONtINuED fROM PAGE 6)

Lynn Scarlett, Deputy Secre-

tary of the Interior

8

ing the importance of contract sanctity – and also must serve as a respected pub-lic steward. MMS and the entire Depart-ment of the Interior recognize they must balance these two competing interests in resolving the issue of missing price thresholds from 1998 and 1999 leases.

Fifth, Scarlett spoke of the ongoing work at the Interior Department to comply with the provisions of the Energy Policy Act of 2005, including developing a mechanism for permitting alternative offshore activ-ity like wind farms, completing a major offshore mapping initiative, and develop-ing a system of coastal impact assistance.

Finally, the Deputy Secretary spoke about the current status of the two offshore pieces of legislation passed by the House of Representatives and the Senate earlier this year. (See related article in this issue of the Washington Report.)

In wrapping up, Scarlett cited five ques-tions the Department of the Interior feels frame the entire issue of offshore access. 1) who benefits from more access? 2) what and where are the impacts of more OCS activity? 3) who makes the decisions? The Federal agencies, states, local com-munities, industry? 4) how does MMS as-sure performance accountability? 5) how does OCS production fit into the larger national energy picture?

William HogarthNOIA members at the meeting also had the opportunity to dialogue with the head of another key federal agency regulating

offshore energy activity. William Hog-arth, Director of the National Marine Fisheries Service (NMFS) at the National Oceanic and Atmospheric Administration (NOAA). Hogarth provided an overview of how the work of his agency relates to the offshore energy sector and issued a call for close collaboration between industry and government to prevent environmental conflicts from creating policy gridlock.

Hogarth also addressed a specific concern of the industry relating to the completion of an important Environmental Impact Statement (EIS) pertaining to seismic ac-tivity in the Gulf of Mexico. Hogarth an-nounced that the EIS is now scheduled to be released in April 2007 and a workshop will be organized at that time in Anchor-age to discuss future similar activities in Alaska.

Hogarth cited some success in NMFS’ permitting processes, pointing to an 80 percent approval rate for permit applica-tions and noting that the number of law-suits has been reduced from over 200 to around 70 in the past few years.

Hogarth also addressed concerns that had been raised over the NMFS guidelines governing the removal of offshore struc-tures and indicated that any modifica-tions to the Draft Restrictions published in May 2005 would likely cause problems. NMFS feels strongly that the habitats be-neath the existing structures are vital to the marine ecosystem, but Hogarth indi-cated a willingness to continue working to address industry’s concerns.

noia 2006 fall meeting (CONtINuED fROM P.7)

William Hogarth, Director,

National Marine fisheries

Service, NOAA

washington report

9

Hogarth concluded with a call for assis-tance from the industry, particularly as they seek the funding from Capitol Hill that is required for prompt completion of required permitting.

committee meetings

In addition to the general sessions de-scribed above, NOIA members also par-ticipated in a number of working commit-tee meetings.

Government AffairsThe Government Affairs Committee Meeting was chaired by Charles Fabri-kant of SEACOR Holdings and featured presentations by Kim Harb, Nolty Theriot and Jeff Krauss of the NOIA staff.

Kim Harb, Director of Policy and Govern-ment Affairs, provided an overview of the ongoing efforts by NOIA and its member companies to help the Minerals Man-agement Service develop the 2007-2012 5-Year Leasing Program. (This issue is discussed in greater detail in a related article in this issue of the Washington Re-port.)Nolty Theriot, Director of Congressional Affairs, proffered an analysis of the ongo-ing legislative battles that loom before the close of the 109th Congress, as members of the Senate and the House of Representa-tives jockey over which of two separate off-shore bills to support. (See related article in this issue of the Washington report.)Finally, Jeff Krauss, Director of Exter-nal Affairs, updated the membership on the state-level advocacy outreach he has spearheaded over the past year. The

National Ocean Industries Association (NOIA) has participated in a national ef-fort to inform state houses and business leaders of the importance of OCS access.

Over the past year, NOIA staff visited 13 states to promote lifting of OCS moratoria and coordinate outreach, working with the manufacturing, chemical and pharmaceu-tical industries. NOIA has also worked with the Agriculture Energy Alliance, a broad coalition of more than 110 farm groups and agribusinesses including the US Farm Bureau, wheat and corn grow-ers, agrichemical and fertilizer firms. These groups visit with governors’ offices, state legislators, county and business of-ficials, and farmers and agribusiness di-rectors. The promise of OCS development versus the hurdles imposed by high ener-gy prices is a message that resonates.

Visits like these helped to pass four sepa-rate state resolutions in Idaho, Kansas, Oklahoma and Tennessee, and generated two legislative letters (in Arizona and Utah). In 2007, such efforts will push for more state resolutions and letters. Next year, South Carolina’s legislature is ex-pected to introduce an offshore energy study bill, based on Virginia’s example. Neighboring Georgia may also roll out a comprehensive energy strategy that in-cludes an offshore component.

Public Affairs and EducationThe Public Affairs and Education Com-mittee, chaired by Paul Kelly, consultant to Rowan Companies, convened for a dem-onstration of the newly redesigned NOIA

noia 2006 fall meeting (CONtINuED fROM P.8)

10

website. Michael Kearns and Jeff Krauss each walked the members through a sam-pling of the information that is being ar-chived to the site in an effort to illustrate how noia.org can be used as a central repository of information and graphics, briefing papers and polling data, news updates and member contact information. The intent of the redesign was to improve the look-and-feel of the site as well as make it more of a working tool than sim-ply an electronic brochure.

The Committee then heard a report from Mary Spruill, Acting Director of the NEED Project, who reported that NEED continues to increase its outreach to stu-dents and teachers in classrooms around the country to ensure that energy is in-cluded in science curricula. NEED is now in approximately 47,000 classrooms across the nation.

Technology Policy CommitteeThe Technology Policy Committee, chaired by Thomas Chance of C&C Technologies, featured a presentation by Peter Bale of Aerosonde, an Australian company that has developed a line of unmanned aerial vehicles (UAV) for use by the Coast Guard and with possible applications for the off-shore energy industry. Bale related how the UAVs, which weigh just 33 pounds, can be launched from a ship’s deck and can travel thousands of miles at a time, could find application for companies involved in seismic activity, facility monitoring, or searches for marine mammals.

The Committee also agreed to develop a new series of educational sessions for reg-ulators that would focus on the technology of seismic exploration. The Committee will work to develop this presentation to deliver before relevant regulatory bodies in 2007.

Health, Safety, Security, and Envi-ronmentThe Health, Safety, Security and Environ-ment Committee, chaired by Dick Alario of Key Energy Services, convened to hear from the winner of the 2006 Safety in Seas Award. MI-SWACO won the award in recognition of its Clean Cut™ Technol-ogy which simplifies the process by which drill cuttings are stored and transferred to shore, removing the need for complex liftings from rig to supply vessel. Since lifting-related incidents comprise approxi-mately 20 percent of all offshore accidents, this technology offers an important step toward improving overall offshore safety.

Board of DirectorsAfter a report on NOIA’s activities throughout 2006 by President Tom Fry to the NOIA Board of Directors, the mem-bership discussed and approved the 2007 budget, formalized two interim appoint-ments to the Board that had been made by Chairman Chris Seaver: Mark E. El-lis, President, Lower 48, ConocoPhillips; and Jim Massey, Vice President United States, ExxonMobil Production Company.

The Board also approved the appointment of four members to the nominating com-mittee: Peter Atkinson, Global Industries;

noia 2006 fall meeting (CONtINuED fROM P.9)

washington report

11

Mark Pease, Anadarko; Bob Potter, FMC Technologies; and Jim Wicklund, Banc of America Securities.

Membership The meeting of the Membership Commit-tee was chaired by Dean Taylor, Chair-man, President, CEO, Tidewater Inc., in his role as Executive Committee Liaison from the Committee.

Member development results for the first three quarters of the year were reviewed with the following items worthy of note:• 20 new members with new revenue of $161,975• 15 voluntary dues increases for additional revenue of $136,200•5 membership cancellations due to non pay-ment of dues for a loss of $37,100 – (Note that one cancellation was the result of a company selling off its GOM properties creating over $30,000 of the above loss.)• 1 merger resulted in an additional loss of $32,700•The net result for the year to date is a gain of $228,375

Dues collection at October 30 was $2,190,875. That exceeds our budgeted goal of $2,016,000 by $174,875. While we are ahead of our dues collection goal, Tay-lor did point out that there are still over $90,000 in 2006 dues outstanding. He encouraged all who had yet to pay their dues to do so as soon as possible in order for NOIA management and staff to more effectively project and monitor income versus expense and plan program activi-

ties that will best utilize members’ dues dollars.

FinanceNOIA Treasurer, Allen Parks, Partner, Parks Paton Hoepfl & Brown chaired the meeting of the Finance Committee.

The committee reviewed a detailed pre-sentation Parks had prepared outlining the association’s financial position to date with projections to 2008. The presenta-tion also included the proposed budget for 2007 which the committee approved and sent forward to the Executive Committee and Board of Directors where it also re-ceived approval.

Barring any unforeseen circumstances the association’s financial position is pro-jected to remain robust and investments will continue to meet the Board mandated position of having at least one year’s oper-ating in reserve.

The document was too extensive to chron-icle here, however copies of Park’s presen-tation, all Financial Statements and the 2007 budget detail are available to all members and can be obtained by calling the NOIA office.

noia 2006 fall meeting (CONtINuED fROM P.11)

12

Stephen Snider, universal Compression; New Member Peter

fortier, International Offshore Services; Justin Davy, Pogo Produc-

ing Company

Charlie Jones, Chris Seaver, Hydril Company; Larry Dickerson, Diamond

Offshore Drilling; Bud Baker, Chickasaw Properties, LLC.

New Member Pat Bond, Weatherford International; Ronnie

Murphy, Venture transport Logistics; New Member Kristi Schiller,

Energy XXI

John Pope, taylor Energy Company; Bob Deason and Bill Robinson, J.

Ray McDermott

Mark Pease, Anadarko Petroleum; Melody and Kim Meyer,

Chevron Corporation

former NOIA Chairman, George Boyadjieff; Joe Netherland, fMC

technologies; Len Paton, Parks Paton Hoepfl & Brown; Jim Wick-

lund, Banc of America Securities; Bob Potter, fMC technologies

noia 2006 fall meeting photos

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Kirk Headley, Cindy & Rick Lazes, Brenda Headley, AMPOLGilbert Nance, Howard Hughes, Oil States Industries; Kenny Lang, BP

Bruce Gresham, Heerema Marine Contractors; new member

Greg Rhodes, Atlantia Offshore Limited; Bob Deason, J. Ray

McDermott

Jim Looke, Walter Oil & Gas; Dick Alario, Key Energy Services

Chris Wilson, NAtCO Group; Sandi Gresham, Heerema; new

member Peggy Rhodes, Atlantia Offshore Limited

New members Mary & Dennis Jahde, Enterprise Products

14

Bob Long, transocean; Nick Swyka, Simmons & Company InternationalLouisiana State Representative Loulan Pitre & tiffany Pitre,

Gordon Arata, et al

Cheryl & Charlie Jones, Hydril Co. Jeff & Janice Sides, C & C technologies

Otto Candies, Otto Candies, L.L.C.; Joe Slattery, W&t Offshore Bret West, Wells fargo Energy; fiona & Peter Atkinson, Global

Industries

noia 2006 fall meeting photos

washington report

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Jodi Adams, Oil & Gas Rental Services; Susan & Kirby Arceneaux,

Wellbore Energy Solutions; Burt Adams

Alan Parks, PPHB; Cindy taylor, Oil States Industries; Sarah

Parks; Bob & Alison Hogan, AmerCable; Robert Saltiel, trans-

ocean

tom Young, Deep Gulf Energy; thomas Chance, C & C technolo-

giesDean taylor, tidewater Inc.; Allen Brooks, PPHB

Carl Davis, Davis-Lynch; Mark Ellis, ConocoPhillips; tom fry Jackie Smith, Smith International; Bev Boyadjieff; Barbara Mar-

kum, Pennwell

16

On November 21, 2006, NOIA, along with six allied trade associations, submitted its comments on the 5-Year Draft Proposed Program for 2007-2012. The full content of the comments can be found on the NOIA website (www.noia.org), but the comments can be summarized through the excerpt that follows:

NOIA, DPC, IPAA, IADC, NGSA, PESA, and USOGA strongly support the inclusion of the areas that the Min-erals Management Service (MMS) has identified for leasing in the Proposed Program, including areas in the Cen-tral and Western Gulf of Mexico, Cook Inlet, Beaufort Sea, Chukchi Sea, and North Aleutian Basin in Alaska, and the small area identified off the Vir-ginia coast. However, we reiterate our concern that the agency is being much too conservative, only proposing to pos-sibly lease less than 12 percent of the 1.7 billion acres it manages. We urge the agency to expand the potential lease sale areas to include all areas of the OCS where there is an interest in hy-drocarbon development. In particular, we strongly urge the agency to include all of the area in the “original sale 181 area” rather than just the bulge area, as well as all of the area off the East Coast.

Public comments are not the only way in which MMS solicits input from the public. Over the past three months, the Minerals Management Service (MMS) held 19 pub-lic meetings in five states to solicit com-

ments on the Draft Environmental Im-pact Statement (DEIS) for the Proposed 5-year Outer Continental Shelf Oil and Gas Leasing Program for 2007-2012. The majority of the comments received dur-ing the public meetings were in support of offshore leasing, coming from agribusi-ness, chambers of commerce, oil and gas representatives and service industries, shipbuilding industries and economic de-velopment councils.

In Alaska, 14 public meetings were held throughout the state, with support for off-shore development overwhelmingly posi-tive. At the Anchorage public meeting, there were 15 positive comments as op-posed to one negative.

In Houston, Texas, 13 people attended the meeting, with six testifying all in favor of MMS’s 5-year plan. NOIA members testifying at the public meeting included NOIA Chairman Chris Seaver from Hy-dril and members from Shell and Devon.

In Mobile, Alabama, 14 people were in attendance with four speaking, three in support of MMS’s Draft EIS and one op-posed.

At the New Orleans, Louisiana meeting 13 organizations provided comments, all in support of the DEIS. Some of the or-ganizations commenting included the Ammonia Produces, Science Solutions representing the chemical users, LA 1 Co-alition, Port of Fourchon and the South-ern Louisiana Economic Council.

mms conducts public hearings, nears completion of 2007-2012 5-year leasing program

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In Norfolk, Virginia, 42 people addressed the offshore leasing plan, 27 in support and 15 against. Speaking in favor of off-shore development were staffers from Sen. George Allen’s and Representative Thel-ma Drake’s office, and VA State Senator Frank Wagner. Others included the VA Manufacturing Association, Anadarko, Dominion, Hampton Roads Chamber of Commerce, Consumer Energy Alliance, 60 Plus, Qualified Gas Contractors, Na-tional Defense Security Foundation, VA Petroleum Council, Virginia Natural Gas, Hampton Roads Technology Council, a professional geologist, and Norfolk and Virginia Beach residents and VA retir-ees. Sierra club members and Virginia Beach residents made up the opposition. Most of the people opposed said we need to focus more on renewables and less de-pendence on oil.

In Panama City, Florida, there were 21 speakers, all in favor of the MMS’s 5-year plan. Some of those speaking at the pub-lic meeting included SEACOR Holdings, Eastern Shipbuilding, Rowan Companies, Associated Industries of Florida, Florida Fertilizer and Agrichemicals Association, CF Industries, Florida Chamber of Com-merce, James Madison Institute and Flor-ida Natural Gas Association. While the MMS was holding their public hearing in the Florida Panhandle, four environmen-tal groups boycotted the public meeting saying they believe voicing opposition at the hearing would do little good. Instead, they held a press conference urging Gov-ernor-elect Charlie Crist and Florida’s

congressional delegation to oppose any efforts to reach a compromise on offshore drilling legislation in Congress before the new Democratic majority takes over in January.

The MMS also held a listening session in Atlantic City, New Jersey at the be-hest of New Jersey lawmakers. Over the two sessions, 28 people spoke with com-ments almost evenly split. Many of those opposed to the MMS plan ranged from federal, state and local legislators to en-vironmental groups. Representatives from Congressman Jim Saxton, Frank Lobiondo, Chris Smith and Senator Rob-ert Menendez’s office said that the plan is shortsighted and that Virginia oil and gas development would be less than 75 miles from the tip of Cape May, putting at risk some of the nation’s most sensitive coastal and marine resources. Those speaking in support of offshore development includ-ed the American Gas Association, AGL Resources, Anadarko, API, New Jersey Chemistry Council, 60 plus, and the New Jersey Chamber of Commerce.

The MMS plans to have its proposed leas-ing program approved by May 2007, and in effect by July 1, 2007.

mms conducts public hearings, nears completion of 2007-2012 5-year leasing program (CONtINuED)

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With the 2006 midterm elections now be-hind us, NOIA is actively preparing for the 110th Congress to get underway in January with the Democrats holding ma-jorities in both houses for the first time in 12 years. Despite the significant electoral shift delivered by voters on November 7, however, there is still a chance for impor-tant work to be done in the existing Con-gress before the holiday recess.

In a promising move in the days following the November election, the Senate Demo-cratic leadership promised to work with Republicans in the “lame duck” session of Congress on legislation to expand off-shore oil-and-gas drilling before breaking for the year.

“I think it’s so important that we complete the work we did in the offshore drilling,” said newly-elected Senate Majority Lead-er Harry Reid (D-NV). Reid has been supportive of expanding offshore drilling, having backed the Senate-passed bill that would open the eastern Gulf of Mexico’s Lease Sale 181 area and a tract to its south to new development. It contains a plan to share production royalties with the four Gulf Coast states that have off-shore leasing -- Alabama, Louisiana, Mis-sissippi and Texas.

Sen. Mary Landrieu (D-LA) has also called for passage of the Senate offshore drilling plan in the lame duck. She said it should not be held over and wrapped into another energy package in the next Congress, saying it is more appropriate to handle the issue separately. She has fre-quently stressed the need for revenues the

bill would provide to help with Gulf Coast rebuilding.

Incoming Speaker of the House Nancy Pe-losi (D-CA) has also indicated that she could support passage of the Senate plan in the lame duck, but the San Francisco Democrat does not want to set a precedent for expanding drilling elsewhere.

The Senate passed legislation in August that would open 8.3 million acres in the Gulf of Mexico to new leasing, encompass-ing part of the Lease Sale 181 area and a region to its south. The more expansive House bill passed in June would expand gulf access but also relax offshore leasing bans that now cover most coastal areas outside the Gulf. The House plan allows drilling in all areas beyond 100 miles from state shores, while states would have the flexibility to allow or block drilling closer to shore.

House drilling advocates had offered a compromise plan that would allow sever-al East Coast states to opt-out of coastal leasing moratoria, while Senate negotia-tors have said they could seek a smaller amount of additional leasing beyond what’s in their bill. Talks have also ad-dressed how to reform the offshore royalty relief incentive program.

Even if the lame duck session fails to pro-vide concrete successes on OCS legislation or not, it seems to indicate a positive in-clination among the incoming Democratic leadership. For more information on this legislation and the prospects for the next Congress, please contact Nolty Theriot at (202) 347-6900 or Nolty@noia.org.

ocs legislation possible before year-end