For sale: 38 million acres of oil and gas leases in Gulf
Come 2013, more than 38 million acres in the central Gulf of Mexico will be up for grabs by oil and gas companies, marking the second time the federal government has sold leases located near the site of BP’s Macondo well that blew two years ago, according to an announcement made Monday by Interior Secretary Ken Salazar.
Of the 38 million acres included in the lease sale, which is slated for March 20 in New Orleans, 7,250 blocks will be federally owned oil and gas drilling tracts, all located between three and 230 miles off the coasts of Alabama, Louisiana and Mississippi, in water depths ranging from nine to more than 11,000 feet, according to the Bureau of Ocean Energy Management.
Monday’s announcement is part of the Obama administration’s five-year plan to reduce the nation’s foreign oil dependency and will mark the second sale of central Gulf oil and gas leases near the site of the 2010 BP oil spill.
“The Obama Administration is fully committed to developing our domestic energy resources to create jobs, foster economic opportunities, and reduce America’s dependence on foreign oil,” Salazar says in a prepared statement. “We are moving full speed ahead on the President’s all-of-the-above energy strategy because the exploration and development of the Gulf of Mexico’s vital energy resources will continue to help power our nation and drive our economy.”
The first sale of Central Gulf leases — post-BP — was held in June and included 7,434 tracts, many being located hundreds of miles off the coast near the site of the Deepwater Horizon. The result was more than $1.7 billion in high bids from oil and gas companies, which FuelFix — a web-based energy news source — credited to pent up demand caused by the cancellation of a previous lease sale in the wake of the 2010 oil spill.
Louisiana is expected to receive royalties from that money in the coming years, though no firm date for its distribution has been set by the federal government.
For domestic production, next year’s central Gulf lease sale — the first of five to be held over the next five years — could result in 460 million to 890 million barrels of oil and about 4 trillion cubic feet of natural gas, according to BOEM estimates.
Yet according to FuelFix, the president’s plan is lackluster in the eyes of some industry and government officials. Their criticisms mainly focus on domestic oil and gas production not being opened up on an even wider scale:
Industry officials and their allies in Congress have criticized the plan as anemic.
American Petroleum Institute spokesman Reid Porter said that “every lease sale is a positive step.” But, he added, “by bypassing other possible offshore areas the administration is missing opportunities to further build the foundation for our nation’s economic recovery and encourage new investments in U.S. energy resources.”
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