Largest US Oil and Gas Lease Sale Announced
US Secretary of the Interior Ryan Zinke has announced that the Department is proposing the largest oil and gas lease sale ever held in the United States: around 311,478km2 in federal waters of the Gulf of Mexico, offshore Texas, Louisiana, Mississippi, Alabama and Florida. The proposed region-wide lease sale, offering an area about the size of New Mexico, is scheduled for March 2018 and includes all available unleased areas on the Gulf’s Outer Continental Shelf, surpassing last year’s region-wide lease sale by about one million acres. Proposed Lease Sale 250 will be the second offshore sale under the National Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022. Lease Sale 249, held in New Orleans last August, received EUR 104 million in high bids. In addition to the high bids and rental payments, the Department will receive royalty payments on any future production from these leases. Outer Continental Shelf (OCS) lease revenues are directed to the US Treasury, Gulf Coast states, the Land and Water Conservation Fund and Historic Preservation Fund.
The estimated amount of resources projected to be developed as a result of the proposed region-wide lease sale ranges from 0.21 to 1.12 Bbbl of oil and from 0.55 to 4.42Tcf. Most of the activity (up to 83% of future production) from the proposed lease sale is expected to occur in the Central Planning Area.
Proposed Lease Sale 250 includes 14,375 unleased blocks, located from 5 to 370 km offshore, in the Gulf’s Western, Central and Eastern planning areas in water depths ranging from 3 to more than 3,400m. Excluded from the lease sale are blocks subject to the Congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks that are adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the current boundary of the Flower Garden Banks National Marine Sanctuary.
The lease sale terms include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region. The terms and conditions for Lease Sale 250 in the Proposed Notice of Sale are not final. Different terms and conditions may be employed in the Final Notice of Sale, which will be published at least 30 days before the sale.