This paper reviews the cooperative efforts between the Federal Government and the offshore energy industry to identify and evaluate the technical and environmental issues related to the potential use of floating production, storage, and offloading (FPSO) systems and supporting shuttle tankers on the Gulf of Mexico Outer Continental Shelf (OCS). FPSO's are floating production systems that store crude oil in tanks located in the hull of the system and offload the crude to shuttle tankers or ocean-going barges for transport to shore. FPSO's may be used as production facilities to develop oil fields in the deepwater areas of the Gulf of Mexico OCS.

This paper also discusses the effort to obtain resources and information for performing an environmental impact statement (EIS), as well cooperative efforts with the MMS contractor to develop the EIS. The initiation of the National Environmental Policy Act (NEPA) EIS process was the first step in the Minerals Management Service's (MMS) fulfillment of its regulatory mandates to address the technical and environmental implications of this technology, which is new to the Gulf of Mexico. In addition to cooperative efforts in support of the EIS, the MMS, the U.S. Coast Guard (USCG), and industry have cooperated in support of a Comparative Risk Assessment and in the identification of regulatory requirements that would be applicable to FPSO's. These components will provide the basic framework for the evaluation of site-specific proposals for the use of FPSO's in the Gulf of Mexico.

Introduction and Background

The western and central portions of the northern Gulf of Mexico constitute one of the world's major oil-and gasproducing areas, and have proved a steady and reliable source of crude oil and natural gas for more than 50 years. The pace of exploration and development in the deepwater Gulf of Mexico has accelerated rapidly in the last few years. The passage of the Deep Water Royalty Relief Act, specifically designed to encourage the development and production of deepwater tracts, resulted in the MMS receiving record bids in both the 1996 and 1997 lease sales. As reported at the 1998 OTC, "Deepwater GOM has reemerged as one of the principal offshore oil and gas basins in the world, a welcomed change after the slowdown during the late 1980s and early 1990s. With this move into deepwater came new challenges for both MMS and the energy industry."1 In water depths exceeding 1,000 feet, the use of conventional, bottom-founded (fixed) platforms quickly becomes uneconomic. As new discoveries are made in progressively deeper water, technologies continue to evolve to meet technical, environmental, and economic needs of deepwater development.

The MMS formalized a deepwater strategy in 1997 to address the many technological, environmental, and regulatory issues associated with increasing deepwater activities. Many of the components of the deepwater strategy existed in part but had not been evaluated from the broader needs of MMS and industry.

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