Industry welcomes Obama administration lease sale in Gulf of Mexico

Washington, DC, United States (AHN) – Oil and gas pundits on Tuesday welcomed the announcement from the Obama administration of the sale of major oil and gas leases in the Gulf of Mexico on Wednesday.

The White House, in a communique, announced the Wednesday trip of Secretary of the Interior Ken Salazar “to New Orleans to hold a major oil and gas lease sale covering more than 21 million acres in the Gulf of Mexico that are currently not leased.”

Welcoming the move, Jim Noe, executive director of the Shallow Water Energy Security Coalition, said, “Doing so in an effective manner is not just good policy – it also means job creation and greater revenue flowing into the Gulf region and U.S. Treasury. We look forward to getting back to work in the Gulf in 2012 in earnest.”

Noe, whose coalition of groups of drilling and service companies works in the Gulf of Mexico, commended the administration for fulfilling the President’s “long-term plan to reduce our reliance on foreign oil.”"

Citing the sale on Wednesday as “a good sign for those companies and workers that really want to get back up to full speed drilling for oil and natural gas in the Gulf of Mexico,” Frank Maisano, energy analyst with Bracewell & Giuliani called for more open procedures.

“Unfortunately, it is only a small step, and while the permitting process is improving, it still remains the real roadblock to getting workers back on the job in the Gulf region,” Maisano said.

According to estimates of the Department of the Interior, the latest lease sale could result in the production of 222 to 423 million barrels of oil and 1.49 to 2.65 trillion cubic feet of natural gas.

Noting that oil production from the federal Outer Continental Shelf in the last two years went up by more than a third, from 446 million barrels in 2008 to an estimated more than 600 million barrels in 2010, the U.S. Energy Information Agency (EIA) projected that U.S. crude oil production increased by roughly 200,000 barrels per day in 2011, and estimated a similar increase in 2012.

Noe noted that since the 2010 Gulf spill, applications to conduct energy activities “mushroomed from 50 to as much as 3,600 pages,” adding, “the window of time it takes for a plan to move from initial submission to final approval has roughly quadrupled.”

Looking forward from the perspective of industry, Noe said, “We trust …the administration is also vested in the less grandiose short- and medium-term work of processing permits for Gulf energy activity in a consistent and transparent manner.”

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