The Gulf of Mexico 259 lease sale reflects the need for a completed lease program, the National Ocean Industries Association (NOIA) said in a statement sent to Rigzone following the conclusion of the sale.
“Lease sale 259 is the first offshore oil and gas lease sale in the Gulf of Mexico since November 2021,” NOIA President Erik Milito said in the statement.
“Mandated by the Inflation Reduction Act, which was signed into law by President Biden, the 259 lease sale and the resumption of Gulf of Mexico oil and gas lease sales have been unnecessarily delayed,” he add.
“The previous gap in leasing underscores why the next federal offshore oil and gas leasing program must be finalized and implemented as soon as possible. Policies that restrict domestic offshore development require imports to beg the deficit, and that the additional production comes from operations with higher emissions in other countries to the detriment of our energy security, economic well-being, emissions and climate progress,” Milito continued.
In the statement, Milito described Lease Sale 259 as an opportunity to strengthen national security interests and develop domestic energy supply in the face of geopolitical uncertainty and tight global demand.
“Companies need rental opportunities to explore and potentially develop domestic energy resources,” Milito said.
“Our national energy needs clearly depend on a commitment to the continued development of US offshore energy. US Gulf of Mexico offshore energy production is a key component of a national energy strategy that will ensure that the Americans can continue to have access to critical home energy that is produced safely, sustainably and responsibly,” he added.
Milito noted that US Gulf of Mexico operations adhere to the highest safety and environmental standards and said the multitude of companies involved in offshore energy development are working collaboratively “to reduce a carbon footprint that is already small.”
“From electrifying operations to deploying innovative solutions that reduce the size, weight and number of parts of offshore infrastructure, thereby increasing safety and decreasing emissions, the US Gulf of Mexico is home to a revolution in high tech,” he said.
“Oil produced from the US Gulf of Mexico is half as carbon intensive as other producing regions. The technologies used in deepwater production, which accounts for 92 percent of the oil produced in the Gulf of Mexico of the US, place this region among the lowest carbon-intensive oil-producing regions in the world,” Milito added.
API response
Also commenting on the 259 lease sale, American Petroleum Institute (API) Upstream Policy Vice President Holly Hopkins said, “while… [this] The lease sale is a belated but positive step toward a more energy secure future, it shouldn’t take an act of Congress to get there.”
“Continued production in the Gulf of Mexico is essential to providing the energy the world needs while supporting carbon reduction goals, but U.S. energy producers need certainty from policymakers to meet growing demand of energy,” added Hopkins.
“It is well past time for the Department of the Interior to end a five-year program for federal offshore leasing that will allow US energy producers to meet the needs of consumers here at home and around the world.” , Hopkins continued.
API noted that 279 days have passed since the Department of the Interior (DOI) allowed the five-year program for federal offshore oil and natural gas leasing to expire without an immediate replacement. The delay and uncertainty over the next offshore leasing program has put the US in the unprecedented position of having a substantial gap between congressionally mandated leasing programs for the first time since the process began in the early 1980s , the organization warned.
Rigzone has asked DOI and the US Department of Energy (DOE) for an update on the federal offshore oil and gas leasing program and comments on NOIA and API statements. The DOI declined to comment, and as of this writing, the DOE has not yet responded to Rigzone’s requests.
GOM 259 lease sale
On Wednesday, DOI’s Office of Ocean Energy Management (BOEM) announced that, as required by congressional direction in the Inflation Reduction Act of 2022, it had completed the Gulf lease sale of Mexico 259, which it said generated $263,801,783 in high bids for 313 sections. covering 1.6 million acres in federal waters of the Gulf of Mexico.
A total of 32 companies participated in the lease sale, submitting $309,798,397 in total bids, BOEM noted, adding that leases resulting from the sale will include stipulations to mitigate potential adverse effects on protected species and avoid potential conflicts with other ocean uses in the region. .
Revenues received from offshore oil and gas leases (including raised bids, rental payments, and royalty payments) are directed to the US Treasury, in certain Gulf Coast states (Texas, Louisiana, Mississippi, and Alabama) and to local governments, the Land and Water Conservation Fund. and the Historic Preservation Fund, BOEM said.
The lease sale offered approximately 13,600 unleased blocks, approximately 73 million acres, in the western, central and eastern Gulf planning areas, BOEM noted.
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