NGI The Weekly Gas Market Report / NGI All News Access

Offshore Coalition Urges MMS to Aggressively Pursue Lease 181 Sales

The Bush administration's proposal to hold a 2007 sale in a two-million-acre section of a natural gas-rich offshore area known as Lease Sale 181 is a step in the right direction, but it doesn't go far enough, officials from six offshore groups said last week.

"We...support the sale proposed for 2007 for a portion of the 'original sale 181 area,' but strongly recommend that the agency increase the acreage proposed for that sale and for future sales in this area to include the entire 'original sale 181 area,' that was specifically identified for leasing by the previous two administrations because of [its] importance to national energy supply," the National Ocean Industries Association, Domestic Petroleum Council, Independent Petroleum Association, International Association of Drilling Contractors, Natural Gas Supply Association and U.S. Oil & Gas Association said last Monday in comments filed on the Minerals Management Service's (MMS) proposed offshore leasing plan.

MMS, an Interior Department agency, in February released for comment a draft proposal for its five-year (2007-2012) Outer Continental Shelf (OCS) leasing program that would expand the boundaries of its Central Gulf of Mexico Planning Area eastward to include part of Lease Sale 181, making two million more acres of 181 available for leasing to oil and natural gas producers. The two million acres would be in addition to the 1.5 million acres that Interior offered for leasing in Lease Sale 181 in 2001. That would leave about 2.4 million acres of Lease 181 still off-limits to producers.

Lease Sale 181 is not currently subject to a moratorium, but drilling has been blocked due to protests from Florida lawmakers, who contend that oil and gas activities would foul their beaches. Because no moratorium exists, Interior has said the additional two million acres in 181 could be leased as early as August 2007.

Lease Sale 181 "is an area that holds great potential for future oil and natural gas finds. It may hold over 12 Tcf of natural gas," the six offshore groups told the Interior agency. And "since the area is so close to existing infrastructure, it is also the quickest way to bring new supplies of energy to the American people."

The offshore coalition protested MMS' decision not to analyze any areas in the Eastern Gulf of Mexico Planning Area as part of its upcoming five-year leasing program. "In particular, we strongly object to the proposal to not include and analyze the portion of the 'original sale 181 area' that is still in the Eastern Gulf of Mexico Planning Area," they said.

The six groups also took issue with former Interior Secretary Gale Norton's statement that she had no intention of leasing areas in the eastern Gulf that were within 100 miles of the coast of Florida. "We felt it was inappropriate to declare such an intention at the beginning of the scoping process." They claimed it violated the National Environmental Policy Act process.

The offshore coalition applauded Interior for including a small portion of the Mid-Atlantic Planning Area (offshore Virginia) for analysis in the five-year leasing plan. "However, we strongly object to limiting the areas for analysis and further consideration to this one small section. The entire Mid-Atlantic Region should be included for analysis."

They further called for the South Atlantic, North Atlantic and Straits of Florida to be analyzed, along with the Washington-Oregon and California coastal areas. These areas currently are subject to congressional and presidential moratoriums on oil and gas drilling. But the offshore coalition believes they should be part of Interior's analysis in the event there is a change in policy with respect to the moratoriums.

Interior is expected to issue its draft environmental impact statement on its proposed leasing plan this summer, and then release a final leasing plan and final environmental impact statement in the winter of 2006. It said it hopes to approve the five-year leasing plan by the spring of 2007.

©Copyright 2006 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus