The Trump administration will hold the largest-ever sale of offshore oil and gas drilling leases in U.S. history, the Interior Department announced Tuesday.
Interior Secretary Ryan Zinke said the record-setting lease sale was part of the Trump administration’s plan to make the U.S. “energy dominant” and spur economic growth.
“In today’s low-price energy environment, providing the offshore industry access to the maximum amount of opportunities possible is part of our strategy to spur local and regional economic dynamism and job creation and a pillar of President Trump’s plan to make the United States energy dominant,” Zinke said in a statement.
The Interior Department’s announcement could be a preview of future lease sales offered under President Donald Trump.
While the Interior Department is still operating under a broader lease plan put in place under the Obama administration, Zinke ordered in June a new five-year leasing plan be drafted to open up more areas to drilling.
Trump signed an executive order in April to reverse Obama administration restrictions on offshore energy production. Officials said 94 percent of U.S. offshore areas are off-limits to development.
Offshore areas are estimated to hold 90 billion barrels of oil and 127 trillion cubic feet of natural gas.
Environmentalists were successful in convincing the Obama administration to curb offshore drilling, including in the Arctic and Atlantic oceans. Many such policies are now being reviewed.
The big question, however, is: Will oil companies bite? Oil prices are still relatively low, making massive investments in offshore capability not as attractive as before prices collapsed.
The Trump administration is optimistic energy companies will be interested in the Gulf of Mexico.
The Interior Department’s Gulf of Mexico lease sale in August raised $121 million in high bids. Twenty-seven energy companies took part in the sale.
“And the economic terms proposed for this sale include a range of incentives to encourage diligent development and ensure a fair return to taxpayers,” Zinke said.
Interior announced nearly 77 million acres of ocean will be made available in the Gulf of Mexico in March 2018. The planned lease oil and gas lease offering will be about one million more acres larger than last year’s sale.
Energy companies can purchase blocks of land ranging from three to 230 miles off the Gulf Coast. Interior estimates this part of the Gulf holds up to 1.12 billion barrels of oil and 4.42 trillion cubic feet of natural gas.
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