WASHINGTON, D.C. – The Department of the Interior announced last week that it will offer more than 21 million acres offshore Texas for oil and gas exploration and development in a lease sale that will include all available unleased areas in the Western Gulf of Mexico Planning Area.
Proposed Lease Sale 233, scheduled to take place in New Orleans in August, will be the third offshore auction under the Obama administration’s Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five Year Program). The sale builds on the first two auctions in the current Five Year Program – a 39-million-acre sale held in March, which attracted more than $1.2 billion in high bids and a 20-million-acre sale held last November that netted nearly $134 million.
“The Gulf of Mexico is a cornerstone of the United States’ energy portfolio,” said Secretary of the Interior Sally Jewell. “This proposed lease sale reflects President Obama’s continued commitment to safely and responsibly develop our domestic energy resources to help create jobs, foster economic opportunities and reduce America’s dependence on foreign oil.”
Domestic oil and gas production has grown each year President Obama has been in office, with domestic oil production currently higher than any time in two decades. Natural gas production is at its highest level ever and renewable electricity generation from wind, solar, and geothermal sources have doubled. Combined with recent declines in oil consumption, foreign oil imports now account for less than 40 percent of the oil consumed in the U.S. – the lowest level since 1988.
Lease Sale 233 will include 3,953 blocks, covering about 21.1 million acres, located from nine to 250 miles offshore, in water depths ranging from 16 to more than 10,975 feet (five to 3,346 meters). The Bureau of Ocean Energy Management (BOEM) estimates the proposed sale could result in the production of 116 to 200 million barrels of oil and 538 to 938 billion cubic feet of natural gas.
The decision to move forward with plans for this auction follows extensive environmental analysis, public comment, and consideration of the best scientific information available. BOEM published a Final Supplemental Environmental Impact Statement to update the environmental analysis completed for proposed Lease Sale 233 and other Western and Central Gulf of Mexico lease sales scheduled under the current Five Year Program. The assessments can be found on the web at: http://www.boem.gov/Environmental-Stewardship/Environmental-Assessment/NEPA/nepaprocess.aspx.
The proposed terms of this sale include conditions to ensure both orderly resource development and protection of the human, marine and coastal environments. These include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development and other uses in the region.
BOEM’s proposed economic terms include the same range of incentives to encourage diligent development and ensure a fair return to taxpayers as used in previous sales, with one exception. The provision for deep gas royalty relief under the Energy Policy Act of 2005 (EPAct) will sunset on May 3, and, therefore, will not be offered. Ultradeepwater gas royalty relief required under EPAct will still be available.
The Notice of Availability of the Proposed Notice of Sale is available for inspection in the Federal Register at: http://www.archives.gov/federal-register/public-inspection/index.html.