Salazar urged to not delay upcoming OCS lease sale

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Mar. 6 -- Fifteen US House Republicans asked US Interior Secretary Ken Salazar in a Mar. 5 letter not to delay a Gulf of Mexico oil and gas lease sale that is scheduled for Mar. 18.

"Later this month, the Department of the Interior will conduct a lease sale in what is believed to be one of America's best untapped areas, the 181 South Area of the Gulf of Mexico," said Doc Hastings (R-Wash.), ranking minority member of the House Natural Resources Committee. "Today, I lead a number of my colleagues in sending a letter to Secretary Salazar stressing the importance of moving forward with this critical lease sale."

In his opening statement at a Mar. 5 hearing by the committee's Energy and Mineral Resources subcommittee on energy outlooks and the role of federal onshore and offshore resources in meeting future energy demand, Hastings said that Salazar's Feb. 4 cancellation of successful leases from a December lease sale in Utah, his Feb. 10 announcement that he would delay development of a 5-year Outer Continental Shelf plan begun last summer, and his Feb. 25 withdrawal of a Jan. 14 oil shale lease solicitation "show a clear trend against oil and gas development and job creation."

Hastings said, "My colleagues and I are concerned that should the department act to delay [Lease Sale 208], it will further establish a dangerous trend of blocking new American-made energy and the creation of new American jobs. Additionally, a delay of this sale would throw obstacles in the way of providing American oil and gas that the [US] Energy Information Administration says the nation will need well past 2030 and also discourage energy companies from pursuing new opportunities in our country," Hastings maintained.

The letter, which also was signed by Doug Lamborn (R-Colo.), the ranking minority member of the subcommittee, and 13 other House Republicans, said that the sale "may bring in billions of dollars to the US Treasury, open an entirely new frontier of the Gulf for oil development, and save and create thousands of jobs."

Revenue from this initial leasing in the gulf's 181 South Area will be shared with Alabama, Mississippi, Louisiana, and Texas, thereby helping the states deal with the current economic downturn, it continued. The US Minerals Management Service's own estimates say that this lease sale could result in production of 800 million to 1.3 billion bbl of oil and 3.3-5.4 tcf of natural gas, "resources that are critically needed by American consumers and which will help us offset our future energy needs," the letter said.

Not proceeding with this lease sale on schedule could threaten not only future leasing in that part of the gulf but also the entire OCS program, it warned.

"Preparation for a lease sale as large as [Sale 208] requires a massive commitment of human and financial capital by dozens of companies. If these companies no longer trust that the government will hold the lease sales that it announces, many will no longer bid or they will reduce their bids, resulting in lower government receipts and less energy produced," the 15 House Republicans told Salazar in their letter.

A spokeswoman for Salazar told OGJ on Mar. 7 that the sale remains on the secretary's schedule and that he plans to attend.

Contact Nick Snow at nicks@pennwell.com.

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