Bids for offshore drilling rise slightly
Offshore drilling companies submitted slightly higher bids in a Wednesday auction for oil and natural gas drilling rights leases in the Gulf of Mexico when compared with the last sale, in August 2017.
The 33 companies participating in the Trump administration’s auction in New Orleans put in $124.8 million worth of winning bids, said Barry Obiol, deputy Gulf of Mexico regional director for the Interior Department’s Bureau of Ocean Energy Management.
{mosads}The high bid total is an increase of almost 3 percent from August. In that sale, 27 companies submitted $121.1 million in high bids.
But the high bid total is about 54 percent less than the March 2017 sale.
The Wednesday sale offered all potentially available drilling tracts in the Gulf — 77.3 million acres, making it the biggest offshore lease sale in United States history. August’s sale offered 76 million acres.
In total, 14,474 tracts were available for bidding. But only 148 tracts had any bids, just over 1 percent.
The Obama administration held much smaller sales that focused only on areas where oil companies had expressed interest.
The Sierra Club declared that the Wednesday sale fell flat.
“[Interior Secretary] Ryan Zinke has been falling all over himself to recklessly give our public lands and waters away to corporate polluters,” Athan Manual, director of the group’s public lands program, said in a statement.
“The lack of interest at today’s lease sale should make it clear to Zinke that he must scrap his ill-advised offshore drilling plan and protect America’s public lands and waters. Zinke has long made it clear that he values oil and gas interests over the people he is supposed to serve.”
Zinke had set high expectations for the auction, saying it would be a major indicator of oil industry interest in a time when oil prices are still significantly lower than they were four years ago and onshore drilling is booming.
“I think this lease sale will be a bellwether on offshore probably for the next 10 years,” he told a Senate committee last week.
“It will be interesting to see the level of interest. We think the interest is good.”
Of the 148 tracts sold Wednesday, all but 10, or 98 percent, only had one bid. Usually, only 76 percent of tracts have just one bidder, according to data compiled by the Project on Government Oversight.
The Trump administration has set an aggressive “energy dominance” agenda, in which it is seeking to dramatically boost domestic production of energy, with a strong focus on fossil fuels.
Big offshore lease sales are a key part of the agenda. Interior is currently working on its plan for lease sales between 2019 and 2024 and rolled out a controversial proposal in January to allow drilling all along the Pacific, Atlantic and Gulf coasts, as well as all around Alaska.
But officials are also looking to bring down what they see as barriers to energy production and use.
In December, Interior proposed rolling back part of an Obama administration rule meant to boost safety in oil and natural gas production from offshore wells.
Interior is also likely soon to propose easing a more high-profile Obama regulation that set new standards for the drilling process itself. It incorporates various lessons learned from the 2010 BP Deepwater Horizon disaster and ensuing 87-day oil spill.