Obama administration announces 38-million-acre oil and gas lease sale in the central Gulf of Mexico
WASHINGTON –Secretary of the Interior Ken Salazar and Bureau of Ocean Energy Management (BOEM) Director Tommy P. Beaudreau have announced that BOEM will offer 38 million acres in the central Gulf of Mexico for oil and gas exploration and development. This sale will build on two major Gulf of Mexico lease sales in the last year – a 21-million-acre sale held last December and a 39-million-acre sale held in June.
Proposed Lease Sale 227, scheduled to take place in New Orleans on March 20, 2013, will offer all unleased areas in the central Gulf of Mexico planning area, offshore Louisiana, Mississippi, and Alabama and could lead to the production of up to nearly a billion bbl of oil and nearly 4 Tcf of natural gas. This will be the second sale under the Administration’s new Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 and the first of five annual central Gulf lease sales. Announced in June, the Five Year Program makes offshore areas with more than 75% of the technically recoverable oil and gas resources available for exploration and development.
Since President Obama took office, domestic oil and gas production has increased each year, with domestic oil production at an eight-year high, natural gas production at an all-time high, and foreign oil imports now accounting for less than 50% of the oil consumed in America – the lowest level since 1995.
Lease Sale 227 encompasses about 7,250 unleased blocks covering approximately 38 million acres. The blocks are located from three to about 230 mi offshore, in water depths ranging from nine to more than 11,115 ft. BOEM estimates the proposed lease sale could result in the production of 0.46 billion to 0.89 billion bbl of oil and 1.9 Tcf to 3.9 Tcf of natural gas.
This sale will build on successful lease sales that BOEM has held within the past year. Western Gulf Lease Sale 218, held in December 2011, made 21 million acres available, and received high bids on tracts covering about one million acres, netting nearly $325 million. Central Gulf Lease Sale 216/222, held in June 2012, covered nearly 39 million acres, and attracted more than $1.7 billion in high bids for more than 2.4 million acres. The next sale, Western Gulf of Mexico Lease Sale 229, announced earlier this year, will take place in New Orleans on Nov. 28, 2012.
BOEM conducted an extensive environmental review and published a Final Environmental Impact Statement with analysis to support decision-making for proposed Lease Sale 227 and other Western and Central Gulf of Mexico lease sales scheduled under the new Five Year Program. The terms of this sale include conditions to ensure both orderly resource development and protection of the human, marine and coastal environments. These include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region.
The proposed terms also continue to include a range of incentives to encourage diligent development and ensure a fair return to taxpayers. In addition, BOEM has implemented a new, streamlined format for sale notices, beginning with this sale, making the document more user-friendly and accessible to the public.