February 27, 2021

U.S. Plans First Sale of Offshore Oil Leases Since Gulf Disaster

The proposed sale, encompassing more than 20 million acres of the Western gulf, is scheduled for Dec. 14. It will be the first sale in the part of the gulf bordering Texas since the summer of 2009 and the first sale of any kind in the gulf since March 2010.

President Obama suspended leasing in the gulf after the Deepwater Horizon accident in April 2010, which killed 11 workers and spilled an estimated 4.9 million barrels of oil into the sea. He announced earlier this year that lease sales would resume later this year, but all drilling will be conducted under stricter environmental and safety regulations.

“This sale is an important step toward a secure energy future that includes safe, environmentally-sound development of our domestic energy resources,” Ken Salazar, the Interior secretary, said. “Since Deepwater Horizon, we have strengthened oversight at every stage of the oil and gas development process, including deepwater drilling safety, subsea blowout containment, and spill response capability.

“Exploration and development of our western gulf’s vital energy resources will continue to help power our nation and drive our economy,” he added.

The lease offering includes parcels from nine to 250 miles offshore and in water depths from 16 to nearly 11,000 feet. The Interior Department estimates that the tract could produce 222 to 423 million barrels of oil and 1.49 to 2.65 trillion cubic feet of natural gas.

The agency is raising the minimum bid on leases in water deeper than 1,312 feet to $100 from $37.50 to encourage companies to actively explore those areas and to compensate for the higher costs of dealing with a spill. Obama administration officials have complained that oil companies have locked up millions of acres of onshore and offshore oil resources but have not produced oil from them.

Officials said the change was based on an analysis of the last 15 years of lease sales in the gulf, which found that leases that received high bids of less than $100 per acre have experienced virtually no exploration and development. Regulators said they concluded that raising the minimum bid would discourage companies from purchasing leases and then sitting on them for years. 

Officials of the Bureau of Ocean Energy Management, Regulation and Enforcement said they could not yet gauge industry interest in the parcels to be offered. Nor could they estimate how much money the government would reap from the auction, known as lease sale 218.

The last western gulf sale, held in August 2009, covered 18.4 million acres and brought in $111 million.

The last lease sale before the BP blowout and spill was in the central Gulf of Mexico. It covered almost 37 million acres and yielded $920 million.

“B.O.E.M.R.E. has taken aggressive steps to renew our commitment to the responsible stewardship of the U.S. Outer Continental Shelf,” said Michael R. Bromwich, director of the agency, which is responsible for monitoring offshore operations. “The decision to hold this sale was made after careful analysis of the best scientific information available and consideration of all public comments received.”

Article source: http://feeds.nytimes.com/click.phdo?i=86fd8a790d3e811cadd9820492a535b5

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