U.S. proposes largest ever offshore oil and gas lease sale

U.S. proposes largest ever offshore oil and gas lease sale

U.S. Interior Department led by secretary Ryan Zinke has proposed the largest oil and gas lease sale ever held in the United States –76,967,935 acres in federal waters of the Gulf of Mexico, offshore Texas, Louisiana, Mississippi, Alabama and Florida.

The proposed region-wide lease sale, offering an area about the size of New Mexico, is scheduled for March 2018 and includes all available unleased areas on the Gulf’s Outer Continental Shelf, surpassing last year’s region-wide lease sale by about one million acres, the department said.

“In today’s low-price energy environment, providing the offshore industry access to the maximum amount of opportunities possible is part of our strategy to spur local and regional economic dynamism and job creation and a pillar of President Trump’s plan to make the United States energy dominant,” Secretary Zinke said. “And the economic terms proposed for this sale include a range of incentives to encourage diligent development and ensure a fair return to taxpayers.”

Proposed Lease Sale 250, which will be livestreamed from New Orleans, will be the second offshore sale under the National Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022. Lease Sale 249, held in New Orleans last August, received $121 million in high bids. In addition to the high bids and rental payments, the Department will receive royalty payments on any future production from these leases. Outer Continental Shelf (OCS) lease revenues are directed to the U.S. Treasury, Gulf Coast states, the Land and Water Conservation Fund and Historic Preservation Fund.

Alaska senator and Chairman of the Senate Committee on Energy & Natural Resources Lisa Murkowski said: “In order to strengthen America’s energy dominance, we must anticipate and plan for our needs for decades to come. The administration’s decision to move forward with the largest offshore lease sale in our nation’s history is a key part of that effort. Whether in Alaska or the Gulf of Mexico, we should all support responsible development because it creates high-paying jobs, strengthens national security, and keeps energy affordable for our families and businesses.”

National Ocean Industries Association (NOIA) President Randall Luthi has welcomed the news.

He said: “In announcing the largest ever Gulf of Mexico oil and gas lease sale, the Trump Administration continues to keep its promises regarding the advancement of an ‘all the above’ energy policy leading to U.S. energy dominance. The historic size of lease offerings in Proposed Lease Sale 250 presents an unprecedented opportunity for the industry to safely produce reliable and affordable oil and natural gas for American consumers, bolster the U.S. economy and increase domestic energy security. NOIA applauds Secretary Zinke and the Department of Interior and looks forward to this historic sale.”

“Offshore lease sales are an integral part of a good national policy to provide energy sustainability, but cannot achieve energy dominance alone. NOIA looks forward to working with the Secretary in developing a royalty policy that benefits both the US government and those who actually do the work of exploration and development. In addition, NOIA supports efforts to continue to winnow out the regulations that are there for regulations sake and not to promote and preserve safe and timely development of the OCS.”

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