At this point, most of the agency environmental negotiations have 

 occurred. The FWS works within a PDOD "strategy" which reflects its 

 earlier resource report and EIS contributions. The OCS Coordinator works 

 with BLM to make the specific points that the FWS would like to see 

 included in the short PDOD document. 



_ ,At this time, the FWS is also assisting in determining the need for 

 mitigating measures for the initial test well which may be drilled by an 

 industry consortium prior to leasing in a proposed sale area. The primary 

 public management agent of the well, known as a COST (Coastal Offshore 

 Stratigraphis Test) well, is the USGS Area Oil and Gas Supervisor. FWS 

 comments at the regional level and review of tne COST well results pro- 

 vide a practical exercise in defining environmental conditions or miti- 

 gating measures for later operations at this site [63]. 



U.S. Army Corps of Engineers and U.S. Coast Guard permits are also 

 required for the COST well, but review criteria are limited solely to 

 navigation issues. Although FWS receives notices of these permits, 

 ordinarily the limited review criteria preclude substantial comment [64]. 



The other USGS contributions at this point in the decision process 

 are revised tract evaluations and estimated values used later when bids 

 are examined [65]. BLM has an "evaluation review team" that organizes 

 this material and submits findings based on its opinion of data sources, 

 price, discount factors and taxation methods used by USGS in its various 

 value estimates [66]. 



2.5 LEASE SALES 



Specific procedures, conditions and stipulations for each lease sale 

 are set in the Public Notice of Sale by the manager of the regional BLM 

 OCS Field Office, who is the analog of the USGS Area Oil and Gas Supervisor; 

 see Section 2.6 [67]. Industry representatives compete by sealed bid for 

 the tracts that are offered. The bidding formulas are limited by statute 

 and typically leases are sold by cash bonus bid with a one-sixth fixed 

 royalty [68]. 



The Department of the Interior may reject any or all bids. Any bid 

 not accompanied by a check, money order or bank draft for 20 percent of 

 the bonus offered is automatically rejected. BLM then compares properly 

 submitted bids with the USGS final pre-sale evaluation of physical re- 

 sources and tract values. Other factors also contribute to the analysis 

 of bids prior to award. For instance, BLM may review the number of bids 

 per tract; the competitive bidding performance of high bidders ranked by 

 quartiles; and the average number of bids on all tracts on which higli 

 bidders bid [69]. 



Awards are announced by the Department of the Interior. Acceptable 

 bids result in lease issuance after the balance of the bonus and the first 

 year's royalties are paid [70]. 



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