The Minerals Management Service plans to shorten the terms of a previously discussed lease sale on nearly 36 million acres in the Gulf of Mexico off the coasts of Louisiana, Mississippi, and Alabama.
The proposed terms over the lease sale (No. 213) would make leases in water depths between 400 meters and 800 meters run for five years instead of the eight-year term that has been typical for Gulf of Mexico leases. Leases in water depths of 800 meters to 1,600 meters would run for seven years intead of 10.
| Drill here! But make it quick. Area for proposed Lease Sale 213.
In both cases if a company started an exploratory well the lease would extend by three years.
“This new approach to lease terms will better ensure that taxpayer resources are being developed in a timely manner,” said Interior Secretary Ken Salazar, whose department oversees the Minerals Management Service.
The American Petroleum Institute‘s Presidet Jack Gerard called the shortened lease times “one more impediment to the development of the domestic oil and natural gas necessary for the American economy to prosper.”
“We wrote to Secretary Salazar three days ago reminding him that this administration has set up a series of roadblocks that discourage the investment necessary to increase domestic energy supplies, create well-paying American jobs, and provide additional government revenues at a time when we desperately need all of them. The shortening of lease terms does nothing to guarantee more discoveries but rather takes away from companies the flexibility necessary to operate in an extremely challenging and risky environment.
Here’s a link to Gerard’s letter to Salazar.
The acreage is located from three to 230 miles offshore in water depths ranging from about 10 feet (three meters) to more than 11,200 feet (3,400 meters). If the lease sale goes off in March 2010, as tenatively planned, it could let drillers tap into areas that MMS estimates could produce up to 1.3 billion barrels of oil and 5.4 trillion cubic feet of natural gas.