Daily GPI / Regulatory / NGI The Weekly Gas Market Report / Regulatory / NGI All News Access

BOEM Schedules Another Region-Wide GOM Oil, Gas Auction for March

The Interior Department is planning yet another region-wide lease sale in the Gulf of Mexico (GOM) next March, when it plans to auction about 78 million acres for oil and natural gas development. 

The blocks to be offered by Interior’s Bureau of Ocean Energy Management (BOEM) in Lease Sale 252, scheduled for March 20, continues a trend by the Trump administration to offer for development every available tract in the GOM.

The sale is to include 14,696 unleased blocks that are three to 231 miles offshore, in the Western, Central and Eastern planning areas in water depths from nine to more than 11,115 feet.

“Developing our nation’s offshore energy resources is essential to our economy and energy security,” said Acting BOEM Director Walter Cruickshank. “BOEM has a vital role to ensure this is done in an environmentally responsible manner.”

The upcoming lease sale would exclude 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 boundaries of the Flower Garden Banks National Marine Sanctuary.

The sale would be the fourth of 10 under the Obama administration’s original 2017-2022 Outer Continental Shelf (OCS) Oil and Gas Leasing Program, in which two lease sales are to be held each year.

All available blocks in the combined Western, Central, and Eastern GOM Planning Areas now are offered for lease in each sale. The region-wide sales implemented when Trump took office so far have done nothing to boost participation in the GOM auctions.

A region-wide sale held in March, which Interior Secretary Ryan Zinke said would be a “bellwether” for future offshore exploration, barely managed to surpass one that offered fewer blocks for leasing in March 2017. In another region-wide auction held last month, less than 1% of the blocks received bids, although the high bids eclipsed offers in the March sale.

In January, the Trump administration proposed revising the OCS program to open every available area offshore the U.S. coasts for oil and gas development. If enacted, the leases would run from 2019-2024; the 60-day public comment period ended in March. The Trump administration initially looked to expand leasing to politically sensitive areas including the Pacific and Atlantic coasts and consider nearly all of the OCS for energy development, including offshore Alaska, California, Florida and Maine, areas heretofore protected by state legislators and previous administrations.

The proposal has so far attracted nationwide scorn from affected state leaders, in part because Florida has since been exempted. In any case, BOEM is expected to publish for public comment the draft proposal by the end of the year, followed by a final proposed program in 2019. Until the program is revised, BOEM would continue to implement the 2017-2022 OCS Program.

The GOM OCS, covering about 160 million acres, is estimated to contain about 141 Tcf of undiscovered, technically recoverable natural gas and 48 billion bbl of undiscovered technically recoverable oil.

Leases would 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 fiscal terms being offered by BOEM include a 12.5% royalty rate for leases issued in shallow water, defined as less than 200 meters deep, and a royalty rate of 18.75% for all other leases.

Terms and conditions are detailed in the Proposed Notice of Sale (PNOS) package. Copies of the PNOS maps may be requested from the GOM Region’s Public Information Unit, 1201 Elmwood Park Blvd., New Orleans, LA 70123, or at (800) 200-4853. The Federal Register notice is to be published on Thursday.

Copyright ©2019 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231 | ISSN © 1532-1266

Recent Articles by Carolyn Davis

Comments powered by Disqus