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Interior's August GOM Lease Sale Offering 73M Acres for Development

Seventy-three million acres offshore Alabama, Florida, Louisiana, Mississippi and Texas will be auctioned in August to kick off the 2017-2022 federal oil and natural gas leasing program, the Department of Interior said Monday.

The proposed blocks in the Gulf of Mexico (GOM) for Lease Sale 249 include about 13,725 unleased blocks from three to 230 miles offshore, in the Western, Central and Eastern planning areas in water depths of nine to more than 11,115 feet (three to 3,400 meters).

"Opening more federal lands and waters to oil and gas drilling is a pillar of President Trump's plan to make the United States energy independent," Interior Secretary Ryan Zinke said. "The Gulf is a vital part of that strategy to spur economic opportunities for industry, states, and local communities, to create jobs and home-grown energy and to reduce our dependence on foreign oil."

Excluded from the sale are blocks subject to the Congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks that are 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.

The lease sale, to be livestreamed from New Orleans, would be the first sale under the new five-year Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022, which the Obama administration finalized last year. Under the new program, 10 region-wide lease sales are scheduled for the GOM. Two GOM lease sales are scheduled each year and include all available blocks in the combined Western, Central, and Eastern GOM Planning Areas.

The estimated amount of resources that could be developed is 0.211-1.118 billion bbl of oil and 0.547-4.424 Tcf of natural gas. The sale could potentially result in 1.2-4.2% of the forecasted cumulative OCS oil and gas activity in the GOM, Interior said. Up to 83% of future production is expected to occur in the Central Planning Area.

"To promote responsible domestic energy production, the proposed terms of this sale have been carefully developed through extensive environmental analysis, public comment, and consideration of the best scientific information available,” said Interior's Walter Cruickshank, acting director of the Bureau of Ocean Energy Management (BOEM). "This will ensure both orderly resource development and protection of the environment."

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. BOEM's proposed economic terms include a range of incentives to encourage "diligent development and ensure a fair return to taxpayers."

As of March 1, about 16.9 million acres on the U.S. OCS were under lease for oil and gas development (3,194 active leases) and 4.6 million of those acres (929 leases) are producing oil and natural gas. More than 97% of these leases are in the GOM; about 3% are offshore California and Alaska.

One final GOM lease sale within the 2012-2017 program is scheduled on March 22 for Central Planning Area Sale 247, when 48 million acres are to be auctioned. The sale includes 9,118 blocks from three to about 230 miles offshore, in water depths ranging from 9 feet to more than 11,115 feet (3-3,400 meters). The 2012-2017 program in total has offered about 73 million acres, netted more than $3 billion in high bids for U.S. taxpayers and awarded more than 2,000 leases.

Final terms and conditions for the proposed notice of sale in August are to be published at least 30 days before the auction. Copies of the proposed sale maps may be requested from the GOM Region's Public Information Unit, 1201 Elmwood Park Blvd., New Orleans, LA 70123, or at 800-200-GULF (4853). The notice of availability also is being published in the Federal Register on Tuesday.

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