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Interior’s Proposed GOM-Wide Auction to Offer 77 Million Acres for Oil, NatGas Exploration

The Interior Department on Tuesday proposed to offer for oil and natural gas exploration nearly 77 million acres, the most ever, in the next Gulf of Mexico (GOM) lease sale scheduled for next March.

Proposed Lease Sale 250, to cover areas offshore Texas, Louisiana, Mississippi, Alabama and Florida, would include all available unleased areas on the Outer Continental Shelf (OCS), surpassing last year’s region-wide lease sale by about one million acres. Nine region-wide lease sales planned by the administration through 2021 combine all three planning areas in the GOM.

The estimated amount of resources projected to be developed from the proposed lease sale is 0.55-4.42 Tcf of natural gas and 0.21-1.12 billion bbl of oil.

The sale, as proposed, would include 14,375 unleased blocks from 3-230 miles offshore, in the Western, Central and Eastern planning areas in water depths of 9-11,115 feet-plus. Up to 83% of future production is expected to occur in the Central Planning Area, where exploration and production activity is highest.

“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,” said Interior Secretary Ryan Zinke. “And the economic terms proposed for this sale include a range of incentives to encourage diligent development and ensure a fair return to taxpayers.”

The auction, to be livestreamed from New Orleans, would be the second under the OCS Oil and Gas Leasing Program for 2017-2022. Lease Sale 249, held in August, also covering the entire GOM, received $121 million in high bids, mostly centered on the Lower Tertiary Trend in the Central Planning Area. High bids were made for 90 tracts covering more than 508,000 acres; almost 76 million acres total had been on offer.

Excluded from the March lease sale are blocks subject to the congressional moratorium established by the GOM Energy Security Act of 2006; blocks adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the current boundary of the Flower Garden Banks National Marine Sanctuary.

Republican leaders heralded the sale.

“In order to strengthen America’s energy dominance, we must anticipate and plan for our needs for decades to come," said Alaska Sen. Lisa Murkowski, chairman of the Senate Committee on Energy & Natural Resources. "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.”

GOP Rep. Rob Bishop, who is chair of the Committee on Natural Resources, said, “If we’re serious about energy dominance and long-term energy affordability, we must create certainty about future access in the Outer Continental Shelf…

“Congressionally, we will continue to move forward on a comprehensive overhaul of onshore and offshore federal lands energy policy to help Interior expand even greater access, streamline permitting and increase revenues to both states and the U.S. Treasury.”

House Majority Whip Steve Scalise of Louisiana also weighed in.

"President Trump has stated that he wants our country to exert 'energy dominance' throughout the world, and this lease sale is another bold step in that direction," Scalise said. "This bold action helps us continue fighting for the responsible development of our natural resources that bring critical dollars to restore our coast."

The lease sale terms 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 notice about the proposed sale is scheduled to be published in the Federal Register on Thursday. Terms and conditions would not be finalized until at least a month before the sale. For information contact Interior’s Bureau of Ocean Energy Management. Maps may be requested from the GOM Region’s Public Information Unit at 1201 Elmwood Park Blvd., New Orleans, LA 70123, or at (800) 200-4853.

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