Federal laws establish the OCS leasing program (e.g., OCSLA) and the plan-specific review processes. Under OCSLA, the USDOI is required to manage the orderly leasing, exploration, development, production, and decommissioning of oil and gas resources on the Federal OCS while simultaneously ensuring protection of the human, marine, and coastal environments and assuring receipt of fair market value for the lands leased and the rights conveyed by the Federal government. OCSLA also requires coordination with states and local governments affected by OCS development activities. 

OCSLA creates a four-stage process for planning, leasing, exploration, and production of oil and gas resources in Federal waters (Figure 1.4-1). OCSLA’s four-stage oil and gas review process gives the Secretary a “continuing opportunity for making informed adjustments” in developing OCS energy resources to ensure all activities are conducted in an environmentally sound manner (Sierra Club v. Morton, 510 F.2d 813, 828 (5th Cir.1975)). In the first stage, the Secretary (through BOEM) prepares a five-year leasing program to identify the size, timing, and location of proposed lease sales, and prepares an environmental document under NEPA. In the second stage, BOEM conducts the prelease process for lease sale-specific NEPA reviews. If BOEM proceeds with a lease sale, BOEM conducts a sealed-bid auction, opens the bids it receives, evaluates the bids for fair market value, and issues the leases. The third stage involves exploration of the leased blocks. Prior to any exploratory drilling, a lessee must submit an exploration plan (EP) to BOEM for review and approval. The fourth stage, development and production, is reached if a lessee finds a commercially viable oil and/or gas discovery. For this stage, HAK has submitted a detailed DPP to BOEM. Statutory requirements for the submittal and review of proposed DPPs are provided in Section 25 of OCSLA (43 USC 1351). BOEM's implementing regulations pertaining to review of proposed DPPs are codified at 30 CFR Part 550.  There, BOEM establishes the requirements for submitting DPPs, the process by which BOEM reviews DPPs, and performance standards that the DPP must meet in order to be approved. These performance standards, codified at 30 CFR 550.202 require that the operator's DPP demonstrate that it has planned and is prepared to conduct its proposed activities in a manner that:

• Conforms to OCSLA as amended, applicable implementing regulations, lease provisions and stipulations, and other Federal laws;

• Is safe;

• Conforms to sound conservation practices and protects the rights of the lessor;

• Does not unreasonably interfere with other users of the OCS, including those involved in National security or defense; and

• Does not cause undue or serious harm or damage to the human, marine, or coastal environment.

Pursuant to 43 USC 1351 and 30 CFR 550.270-.271, BOEM would approve the DPP if it complies with all applicable requirements. Conversely, BOEM would require modification of the DPP if it fails to make adequate provisions for safety, environmental protection, or conservation of natural resources or otherwise does not comply with the lease, OCSLA, the regulations prescribed under OCSLA, or other Federal laws. BOEM would disapprove the DPP if the operator failed to demonstrate that it can comply with applicable requirements, or if any of several other specified circumstances apply.

HAK must abide by the requirements of lease stipulations associated with the three Federal leases which make up the Liberty Unit. These leases were issued under three separate lease sales: Beaufort Sea Planning Area Lease Sale 124 (Lease OCS-Y-1585) (USDOI, MMS, 1990), Beaufort Sea Planning Area Lease Sale 144 (Lease OCS-Y-1650) (USDOI, MMS, 1996) and Beaufort Sea Planning Area Lease Sale 202 (Lease OCS-Y-1886) (USDOI, MMS, 2003; 2006). In general, the stipulations for the three lease sales are the same.