Upcoming Gulf of Mexico oil and gas lease sale is a welcome step: An editorial

05 28, 2012 by The Times-Picayune

The large sale of oil and gas leases in the Gulf to be held in New Orleans next month is a welcome step in our region's recovery. But the Obama administration needs to also open new areas for exploration and development.

The June 20 sale will make available 38 million acres off the coast of Louisiana, Mississippi and Alabama. The Interior Department estimated that could lead to the production of more than one million barrels of oil and more than 4 trillion cubic feet of natural gas. That's a substantial addition to the nation's domestic energy production.

But the sale is simply the reinstatement of two separate sales that had been set for 2011 and 2012 by the Bush administration. The sales were unnecessarily put on hold after the BP oil spill in 2010. That means these resources could have been developed already.

Still, the nation will surely benefit from the riches estimated in the areas offered in June.

Officials have increased the minimum bid price for deepwater leases to $100 per acre, up from $37.50. They said the change was prompted by an analysis showing that deepwater leases that went for the lowest amounts "experienced virtually no exploration and development drilling" over the past 15 years. That makes the higher price warranted -- and a welcome move to increase public revenues.