Oil and gas lease sale set for August

Oil and rigs
Oil rigs such as these could be in the future of Florida Gulf coast communities. - File Photo | Sun

The U.S. Department of the Interior’s Bureau of Ocean Energy Management will offer 78 million acres of federal waters in the Gulf of Mexico off Florida, Alabama, Louisiana, Mississippi and Texas for oil and gas exploration and development on Wednesday, Aug. 15, according to an agency press release.

The announcement underscores accusations from critics that Interior Secretary Ryan Zinke’s promise earlier this year to Florida Gov. Rick Scott that Florida would be “off the table” for offshore drilling was an “election-year stunt.”

At a subsequent Senate Energy and Natural Resources Committee hearing, Zinke admitted that “Florida is still in the process,” when asked about the agency’s offshore drilling program, according to Democratic Sen. Bill Nelson, who is defending his Senate seat in a race against Republican Scott.

A proposed amendment to the Florida constitution would prohibit “drilling for exploration or extraction of oil or natural gas” if approved. The proposal is on the ballot for the Nov. 6 general election; it will need at least 60 percent of voters to pass.

“Responsibly developing our offshore energy resources is a major pillar of this administration’s energy strategy,” Deputy Secretary of the Interior David Bernhardt said in the press release announcing the lease sale. “A strong offshore energy program supports tens of thousands of well-paying jobs and provides the affordable and reliable energy Americans need to heat homes, fuel our cars and power our economy.”

“Powering America and protecting the offshore environment are not mutually exclusive,” Counselor to the Secretary for Energy Policy Vincent DeVito said in the press release. “We can do both. American energy production can be competitive while remaining safe and environmentally sound. This lease sale is just one piece of the Administration’s comprehensive effort to secure our Nation’s energy future.”

Lease Sale 251, scheduled to be live-streamed from New Orleans, will be the third offshore sale under the National Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-22. Under the program, 10 lease sales are scheduled for the Gulf, where resource potential and industry interest are high, and oil and gas infrastructure is well established. Two Gulf lease sales will be held each year.

The sale will include approximately 14,622 unleased blocks located from three to 231 miles offshore in the Gulf’s Western, Central and Eastern planning areas in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters). The Gulf of Mexico OCS, covering about 160 million acres, contains about 48 billion barrels of undiscovered technically recoverable oil and 141 trillion cubic feet of undiscovered technically recoverable gas, according to the release.

Successful bidders will pay a 12.5 percent royalty rate for leases in less than 200 meters of water and a royalty rate of 18.75 percent for all other leases.

Terms and conditions for the lease sale are detailed in the Final Notice of Sale (FNOS) information package. The FNOS is available in the Federal Register.