In support of President Donald J. Trump’s America-First Offshore Energy Strategy, Deputy Secretary of the Interior David Bernhardt and Bureau of Ocean Energy Management (BOEM) Acting Director Walter Cruickshank today announced that BOEM proposes to offer 78 million acres for a region-wide lease sale scheduled for March 2019. The sale would include all available unleased areas in federal waters of the Gulf of Mexico.
“The development of our offshore energy resources is a major pillar of this Administration’s energy strategy,” said Mr Bernhardt. “We all benefit from a strong offshore energy program, which provides thousands of well-paying jobs, as well as affordable and reliable energy Americans need to heat homes, fuel our cars, and power our economy.”
Lease Sale 252, scheduled to be livestreamed from New Orleans, will be the fourth offshore sale under the 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program (2017-2022 OCS Program). Under this program, ten region-wide 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 and include all available blocks in the combined Western, Central, and Eastern Gulf of Mexico Planning Areas.
In January, Secretary of the Interior Ryan Zinke announced a draft proposed program for a new National OCS Program for years 2019-2024. The 60-day public comment period for the draft ended on March 9. After considering all public comments received in response, BOEM will develop and publish a proposed program for public comment later this year, followed by the proposed final program expected in 2019.
BOEM will continue to implement the 2017-2022 OCS Program until the new National OCS Program is approved.
Lease Sale 252 will include approximately 14,696 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 ft (three to 3,400 m). Excluded from the lease sale are: blocks subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks 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 boundaries of the Flower Garden Banks National Marine Sanctuary.
The Gulf of Mexico OCS, covering about 160 million acres, is estimated to contain about 48 billion bbl of undiscovered technically recoverable oil and 141 trillion cubic ft of undiscovered technically recoverable gas.
Revenues received from OCS leases (including high bids, rental payments and royalty payments) are directed to the U.S. Treasury, certain Gulf Coast states (Texas, Louisiana, Mississippi, Alabama), the Land and Water Conservation Fund, and Historic Preservation Fund.
“Developing our nation’s offshore energy resources is essential to our economy and energy security,” Acting BOEM Director Dr. Walter Cruickshank, said. “BOEM has a vital role to ensure this is done in an environmentally responsible manner.”
Leases resulting from this proposed sale would 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.
Additionally, BOEM has included appropriate fiscal terms that take into account market conditions and ensure taxpayers receive a fair return for use of the OCS. These terms include a 12.5% royalty rate for leases in less than 200 m of water depth, and a royalty rate of 18.75% for all other leases issued pursuant to the sale, in recognition of current hydrocarbon price conditions and the marginal nature of remaining Gulf of Mexico shallow water resources.