Gulf oil lease 30-year record

06 21, 2012 by The Advocate

The federal government generated $1.74 billion Wednesday in high bids on oil-and-gas leases for 454 central Gulf of Mexico tracts, including 43 winning bids from BP.

The lease sale in the Mercedes-Benz Superdome in New Orleans was the largest Gulf lease sale since the 2010 BP oil rig explosion that killed 11 men and resulted in a three-month discharge of 4.9 million barrels of oil into the Gulf and along Louisiana’s coast.

Interior Department Secretary Ken Salazar said in a conference call after the lease sale that the event was the Gulf’s fourth-largest lease sale ever and included the single-largest winning bid in the Gulf in more than three decades.

The $157 million record bid was from Statoil, of Norway, for a tract in the central Gulf’s Mississippi Canyon that is south of Louisiana’s coastline, he said.

“This is a huge number relative of anything we’ve ever seen,” Salazar said of the lease sale.

The overall sale included nearly 600 bids from 48 companies on 454 tracts for deepwater drilling in the Gulf’s Outer Continental Shelf. Nearly 40 million total acres were put up for lease.

“What it does show is the Gulf is back,” Salazar said, adding that he participated in a flyover of the Gulf. “I saw no remnants of the oil and gas, which was so prevalent,” he said.

Salazar insisted that the lessons of the 2010 Deepwater Horizon disaster not be forgotten. He also toured Louisiana’s Breton National Wildlife Refuge and Delta National Wildlife Refuge and he touted the restoration of 1,200 acres of marshland thus far and the need for much more.

But Salazar and his boss, President Barack Obama, also are taking jabs for the lease sale this week from both the political right and left.

Several conservation groups — Oceana, the Natural Resources Defense Council, the Defenders of Wildlife and the Center for Biological Diversity — are suing the federal government in an effort to block the completion of the leases.

The government “fails to adequately consider the impacts of the Deepwater Horizon spill; does not incorporate new analyses of the risks posed by offshore drilling, particularly in deep water; fails to include information essential to a reasoned choice among alternatives and improperly deems missing information nonessential; and fails to assess the environmental impacts of the action using a post-Deepwater Horizon baseline for species and habitats in the Gulf despite the fact that this lease sale covers the precise area where species and habitats suffered the most damage from the Deepwater Horizon incident,” according to the lawsuit, which was filed Monday in federal court.

On the other hand, U.S. Sen. David Vitter, R-La., criticized the Obama administration for not doing enough in moving forward with domestic oil-and-gas production.

“I certainly hope our efforts to knock some sense into the administration about the critical nature of energy production in the Gulf of Mexico are starting to pay off,” Vitter said in a news release. “But until we see a positive trend with lease sales and issuing drilling permits, no one should be remotely convinced that Washington’s off-course energy policy is on the right track. The administration has restricted far more resources than they’ve made available, so while holding a lease sale is a good common-sense act, opening up more of the outer continental shelf and getting permitting back to normal rates also needs to be their focus.”

Vitter also noted that other lease sales were either delayed or canceled in the aftermath of the BP oil leak.

Salazar, however, called the Gulf of Mexico the nation’s “crown jewel” for oil-and-gas production as part of the president’s “all-of-the-above” energy strategy. The Gulf represents roughly one-third of the nation’s domestic oil-and-gas production, Salazar said, and total domestic production is the highest in eight years.

Wednesday’s lease sale was the second one held since the BP oil leak. In December, a much smaller lease sale in the less-developed western part of the Gulf generated nearly $340 million.