Feds propose first central Gulf lease sale since Deepwater Horizon

Taken in the Gulf of Mexico more than 50 miles southeast of Venice on Louisiana's tip, the Deepwater Horizon oil rig is seen burning. A BP scientist identified a previously unreported deposit of flammable gas that could have played a role in the Gulf of Mexico oil spill, but the oil giant failed to divulge the finding to government investigators for as long as a year, according to interviews and documents obtained by The Associated Press. (AP Photo/Gerald Herbert, File)

A federal agency today proposed an oil-and-gas lease sale in the Gulf of Mexico, the second there since the 2010 oil spill and the first since then to involve waters in the central Gulf region where the disaster occurred.

The Bureau of Ocean Energy Management’s announcement came as part of President Barack Obama’s roll-out of the energy component of his new job creation and economic policy proposal that he outlined in his State of the Union address on Tuesday night. Already long in the works, the much-anticipated lease sale on June 20 would round out the Interior Department’s current five-year offshore leasing plan, which expires June 30.

The sale would combine two auctions of potentially attractive tracts in the central Gulf near BP’s ill-fated Macondo well, including one sale that had been postponed because of the oil spill. BOEM recently said it had finished a supplemental environmental study for the central Gulf that incorporated information learned from the disaster, which killed 11 people and spilled an estimated 5 million barrels of crude.

“We are moving forward with this sale based on careful analysis of the best scientific information available and consideration of all of the public comments we have received,” said Tommy Beaudreau, director of the ocean-energy agency.

It would come half a year after a December 2011 western Gulf auction, the first in the Gulf of Mexico since Obama halted leasing there after the oil spill. Obama’s relationship with industry has remained icy, as drilling advocates contend he hasn’t done enough to promote offshore oil-and-gas development since the spill.

Environmentalists quickly criticized the proposed lease sale.

David Pettit, senior attorney with the Natural Resources Defense Council, said his group would file a lawsuit over the lease sale. He contended the Interior Department still hasn’t finished consulting with the Fish and Wildlife Service on risks to endangered species and hasn’t done enough to improve drilling safety since the oil spill.

“We aren’t any safer in terms of preventing a blowout, and we’re not any better in terms of containing one than the day before the Deepwater Horizon [rig] blew up,” said Pettit, whose group also has challenged the December lease. “We shouldn’t be selling new lease tracts until the science is right and we’re confident that it’s safe.”

House Natural Resources Committee Chairman Doc Hastings, R-Wash., accused Obama of claiming the lease sale from a previous administration’s five-year drilling plan as his own.

“Unfortunately, President Obama seems to be in full campaign mode, taking credit for inherited energy successes of his predecessors and attempting to create undeserved fanfare for routine offshore energy lease sales that do not open any new areas for energy production,” Hastings said in a statement.

The sale would involve 38 million acres of parcels, located anywhere from three to about 230 miles offshore and in waters ranging from nine to more than 11,115 feet deep. BOEM, an Interior Department agency, estimated the sale could yield 1 billion barrels of oil and 4 trillion cubic feet of natural gas.

As in December’s lease, the proposed one would come with minimum bids of $100 per acre, up from the previous $37.50 rate. Administration officials contend many companies have failed to develop resources secured at lower bids, but drilling advocates have said the higher rate would curb production. Also rental rates would rise the longer companies don’t act, and lease duration terms would account for difficulties drilling in deeper waters, the Interior Department said.

In his State of the Union address, Obama also said he asked his administration to make 75 percent of the nation’s potentially recoverable offshore resources available for drilling to help reduce foreign-oil reliance and create jobs.

He was alluding to the Interior Department’s proposed 2012-2017 leasing plan, which the department said Thursday it would finalize soon. The plan would set up 15 lease sales in certain Gulf and Arctic waters, but drilling supporters such as Hastings say more offshore areas should be opened up.

Obama took his energy plan out West today as he sought to tack to the center with proposals to boost both fossil fuels and renewable energy. He will speak in Las Vegas and at Buckley Air Force Base in Aurora, Colo., on various aspects of the blueprint, which seeks an “all of the above” approach — a popular GOP phrase — to boost energy security and jobs while reducing pollution. The plan includes:

• Holding 15 oil-and-gas offshore leases in the Gulf of Mexico and Arctic Ocean.
• Continued administration support for shale gas development. Also requiring disclosure of hydraulic fracturing fluids on federal lands.
• Administration approval of enough renewable energy projects on federal lands in 2012 to power 3 million homes.
• Congressional approval of efficiency incentives, especially for manufacturers.
• Congressional action to extend of tax credits for renewable energy production and clean energy manufacturing.
• Congressional passage of a clean-energy standard, requiring 80 percent of U.S. power come from low-carbon sources by 2035.
• Promotion of natural gas vehicles, including with proposed incentives for bus and truck conversion and an Energy Department-sponsored research competition for natural gas technologies.

“Hopefully, congressional leaders will join with, rather than oppose, the president to enact these clean-energy proposals that will create jobs, and reduce oil use and pollution,” Daniel Weiss, climate strategy director for the liberal Center for American Progress, said in a statement.