Obama administration extends nearly 1,400 offshore leases

The Obama administration extended nearly 1,400 deep-water oil and gas drilling leases to compensate for delays caused by last year’s Gulf spill and the subsequent moratorium on some offshore exploration.

The Interior Department’s Bureau of Safety and Environmental Enforcement is announcing today that it has concluded the process of vetting requests for extra time, after rejecting just 2.3 percent of the applications.

Ultimately, according to the safety bureau, companies asked the government to grant extensions of up to one year for 1,413 offshore leases. Federal regulators approved 1,381 of those requests.

President Barack Obama broadly announced the lease extension plan in May.

The extensions were aimed at compensating offshore energy companies for a five-month moratorium on deep-water drilling and giving them more time to meet new safety and environmental standards imposed on that work. Companies could get up to an extra year added to leases under the program.

The program was open to non-producing leases in at least 500 feet of water that expire before Dec. 13, 2015. The government may have turned down some companies’ requests because the firms were already producing oil and gas at the sites.

Some congressional Republicans, including Sen. Kay Bailey Hutchison, R-Texas, also had argued for similar extensions for deep- and shallow-water drilling. Shallow-water drilling was not halted after last year’s spill. But oil and gas companies and their allies in Congress complained that those projects were still hurt by a slowdown in government-issued permits as both industry and government adapted to new post-spill safety regulations.

Typically, leases to drill in deep federal waters last about 10 years.

The American Petroleum Institute cheered the administration’s move as offering “much-needed certainty for companies with ongoing operations,” but suggested that expanded offshore drilling opportunities also are necessary.

“Extending these offshore leases is a good decision, supported by the need to increase production in the Gulf of Mexico and produce in other areas,” said Reid Porter, an API spokesman. “Looking ahead, energy security, U.S. job creation and economic growth would all benefit from responsible offshore development in areas not yet opened.”