President Obama to announce new Gulf of Mexico oil and gas lease sale today

President Barack Obama will announce today a new oil and gas lease sale in the central Gulf of Mexico to be held in New Orleans on June 20. The lease sale, which will include all available unleased areas in the Central Planning Area off of Louisiana, Mississippi and Alabama, will make about 38 million acres available, and could result in the production of 1 billion barrels of oil and 4 trillion cubic feet of natural gas, according to Interior Department estimates.

The announcement will come as part of a day of events in Nevada and Colorado in which the president will put some flesh on the bones of the administration "Blueprint for An America Built to Last," committed to an "all-of-the-above" approach to developing all available sources of American energy.

In his State of the Union, the president directed the Department of Interior to finalize a national offshore energy plan to make three quarters of potential offshore resources available for development by opening new areas for drilling in the Gulf and Alaska.

"Expanding offshore oil and gas production is a key component of our comprehensive energy strategy to grow America's energy economy, and will help us continue to reduce our dependence on foreign oil and create jobs here at home," said Secretary of the Interior Ken Salazar.

"The President has made it clear that developing our domestic oil and gas resources is a significant part of this administration's efforts to grow our economy and create jobs. This lease sale is part of our commitment to safe and responsible development of the Outer Continental Shelf."

Lease Sale 216/222 in June will be the last remaining sale scheduled in the 2007 - 2012 Outer Continental Shelf Oil and Natural Gas Leasing Program. In the meantime, Interior is finalizing the next five-year program for 2012-2017, which will make more than 75 percent of undiscovered technically recoverable oil and gas estimated on the OCS available for development. The plan is for there to be 12 lease sales in the Gulf in those five years.

"The Central Gulf of Mexico remains the area with the greatest offshore oil and gas potential in the entire United States outer continental shelf, and this proposed sale is another important step in making this area available for safe and environmentally responsible exploration and development," said Bureau of Ocean Energy Management Director Tommy Beaudreau. "We are moving forward with this sale based on careful analysis of the best scientific information available and consideration of all of the public comments we have received."

The terms of the sale are designed, according to administration officials, to encourage "diligent development," including rental rates that escalate the longer it takes to move forward with exploration and development, while acknowledging the additional time necessary to satisfy more stringent regulatory requirements in the deeper waters.

BOEM also has increased the minimum bid for deepwater to $100 per acre, in part to provide leaseholders with an added incentive to invest in leases that they are truly interested in developing. BOEM had found that over the last 15 years, the lowest-priced leases experienced almost no actual exploration and drilling.

According to BOEM, the proposed lease sale includes about 7,250 unleased blocks covering nearly 38 million acres. They are located anywhere from three to about 230 miles offshore, in water up to 11,115 feet deep in the Central Gulf of Mexico, a region that BOEM estimates contains close to 31 billion barrels of oil and 134 trillion cubic feet of natural gas that are currently undiscovered and technically recoverable.

BOEM also noted that it had completed a supplemental environmental impact state on the sale, mindful of the latest information available on the Central Gulf of Mexico Planning Area following the Deepwater Horizon Oil Spill.

In his State of the Union, Obama promised, "I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf two years ago."