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Historic Lease Sale Is Important Step Toward America’s Energy Dominance
Today’s historic Central Gulf of Mexico Outer Continental Shelf (OCS) Lease Sale – the largest lease sale in U.S. history - is a significant step in achieving this nation’s goal of energy dominance, according to the Louisiana Mid-Continent Oil and Gas Association (LMOGA). Lease Sale 250 includes all available unleased areas on the Gulf OCS for a total of 76,967,935 acres.
“The immense size of today’s lease sale clearly reflects our nation’s new commitment to not merely be energy independent, but to be a dominant producer of oil and gas on a global scale,” says LMOGA President Chris John.
“Access to America’s OCS resources is key to increasing offshore energy development and LMOGA is pleased to see this Administration recognize the significance of our offshore oil and gas industry in fueling this nation and the world,” John says.
The Gulf of Mexico is a prominent energy basin, providing 98 percent of all energy produced from available OCS areas. In 2016, offshore oil and natural gas production from the Gulf accounted for approximately 18.2 percent and 4.4 percent of all U.S. oil and gas production respectively. This production is a critical component to ensuring a dominant U.S. oil and natural gas industry in the future.
While today’s sale is the second Gulf sale under the National Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022, LMOGA is looking forward to adoption of a proposed new 2019-2024 OCS leasing program currently being developed by BOEM, which could open 90 percent of America’s OCS for development.
“Under the current federal leasing program, 98 percent of our nation’s OCS areas currently off-limits to future development. Expanding the OCS available for oil and gas production is critical to strengthening our nation’s energy and economic security, creating good-paying jobs and bolstering our local, state and national economies. Furthermore, offshore revenue sharing helps states and communities improve infrastructure and fund important environmental and coastal protection and restoration efforts,” says John.
“In addition to region-wide lease sales and increasing OCS access, LMOGA also supports the recommendation by the DOI Royalty Policy Committee to establish a reduced uniform royalty rate of 12.5 percent on federal lands and the willingness to work with operators on royalty matters to spur production. While BOEM has reduced royalty rates to 12.5 percent on leases in water depths less than 200 meters, an across-the-board royalty relief is necessary especially in the deepwater Gulf during this low-price environment. Royalty relief in the deepwater is good for America and will further support our nation’s energy dominance.”