Interior Department wants to increase minimum amounts to encourage bidders to move quickly to develop the resources
WASHINGTON -- The Obama administration is scheduling the first oil and natural gas lease sale in the Gulf of Mexico since last year's BP oil spill.
Ray Nelson, Tim Ford and Tom Young look over a map of oil leases at the Louisiana Superdome during the last oil and gas lease sale on March 17, 2010. A month later the Deepwater Horizon oil rig explosion and subequent oil spill put a temporary halt to the sales. The Interior Department announced Friday it will hold the first lease sale since that disaster in New Orleans on Dec. 14.The sale, scheduled for Dec. 14 in New Orleans, will include all available unleased areas in the Western Gulf Planning Area off the Texas shore.
There is one major change from previous sales.
The Interior Department said today that it wants to increase the minimum bid amount for blocks of water in depths of 1,312 feet and greater to $100, up from $37.50 per acre. The department said that it wants to ensure fair market value for the leases, as well as to encourage bidders who are ready to move quickly to develop the oil and natural gas resources.
Bureau of Ocean Energy Management Regulation and Enforcement Director Michael Bromwich said that the administration is acting after taking "aggressive steps to renew our commitment to the responsible stewardship of the U.S. Outer Continental Shelf" since the BP disaster.
He said the agency is seeking a higher minimum bidding price "to ensure that areas with the greatest resource potential are developed and to decrease the amount of leased acreage that is warehouse and goes unexplored."
He and other Obama administrators have been criticized by oil and gas industry officials, as well as oil state lawmakers, for acting too slowly to restore production since the BP disaster. But some environmental groups said that the agency is moving to resume production before all the needed safeguards have been put into place.
Interior Secretary Ken Salazar expressed confidence the timing of the new lease sale is right.
"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," Salazar said.
The American Petroleum Institute, which represents the major oil companies, praised the administration's announcement.
"We welcome seeing the scheduling of the first oil and gas lease sale in the Gulf in 21 months," said API Upstream Director Erik Milito. "Continued and expanded development of offshore oil and gas resources will bring a much needed infusion of jobs, government revenues, and energy security to the nation."
"We hope that many more lease sales will follow in the Gulf, as well as other offshore regions such as Alaska and the Atlantic.
Rep. Steve Scalise, R-Jefferson, continued to push for more drilling friendly policies.
"While today's announcement is a step in the right direction, this much-delayed lease sale is no substitute for an all-of-the-above energy strategy that allows us to utilize all of our natural resources to create millions of American jobs and eliminate our dependence on Middle Eastern oil," Scalise said. "Nor does this decision reverse the damage that's already been done by President Obama's permitorium that has led to more than 13,000 jobs lost along the Gulf Coast alone."
Sen. Mary Landrieu, D-La., said the lease sale "is an important and encouraging step toward getting the
"Unfortunately, the slow pace of new permits in the Gulf places lingering uncertainty over this critical industry, which brings in billions of dollars a year to the U.S. Treasury and employs hundreds of thousands of Louisianans," Landrieu said. "At this crucial time in our struggling economic recovery, we need a clear vision for safe and reliable domestic energy production and job creation."