U.S. to sell 38M Mexico gulf acres for oil

The Obama administration plans to sell 38 million central Gulf of Mexico acres for oil exploration to expand domestic energy supplies, officials said Thursday. The June 20 sale of all available unleased areas in the so-called Central Planning Area off Louisiana, Mississippi and Alabama follows President Barack Obama's State of the Union speech Tuesday, in which he said a major part of his agenda this year would be to develop domestic energy supplies, from traditional fuels such as oil and natural gas to renewable energy sources such as wind and the sun. Obama was to discuss the planned sale around 10 a.m. PST Thursday when he speaks at a Las Vegas United Parcel Service Inc. hub about the economic importance of developing "American-made energy," the Interior Department and White House said. "Expanding offshore oil and gas production is a key component of our comprehensive energy strategy to grow America's energy economy, and will help us continue to reduce our dependence on foreign oil and create jobs here at home," Interior Secretary Ken Salazar said. The lease sale -- involving about 7,250 unleased blocks covering nearly 38 million acres -- "is part of our commitment to safe and responsible development of the Outer Continental Shelf," he said. The Outer Continental Shelf is part of the underwater U.S. continental shelf beyond the shoreline that does not fall under the jurisdiction of individual states. The blocks are located from 3 to about 230 miles offshore, in water depths ranging from 9 feet to more than 11,000 feet, the Interior Department said. The sale could result in production of 1 billion barrels of oil and 4 trillion cubic feet of natural gas, the department's Bureau of Ocean Energy Management estimated. Sale terms will reflect reforms "to ensure fair return to taxpayers and encourage diligent development," such as escalating rental rates to encourage prompt exploration, an Interior Department statement said. The terms reflect environmental stipulations "to protect biologically sensitive resources, mitigate potential adverse effects on protected species and avoid potential conflicts associated with oil and gas development in the region," the statement said. David Pettit, senior attorney with the Natural Resources Defense Council, told United Press International the environmental advocacy group would file a lawsuit to have the sale declared illegal "if it looks like the last lease sale," which the group also sought to declare illegal. "We don't think there are enough safeguards in place to protect the people and the economy in the gulf," Pettit told UPI, alleging the Interior Department has done "very little to make drilling any safer now than it was before the Deepwater Horizon blew up." The oil rig 40 miles southeast of the Louisiana coast exploded and caught fire in April 2010, causing about 4.9 million barrels of crude oil to spill into the gulf in the largest accidental marine oil spill in history. "In addition, the feds have done very little science to determine what's out there and what the risks are to marine mammals," Pettit told UPI. The Interior Department is consulting with the U.S. Fish and Wildlife Service to establish what species are at risk, "but they haven't completed their studies," Pettit said. "So, literally, the science isn't there to know what the real risks are." The gulf region is a major source of U.S. oil and gas, and the Interior Department is finalizing a five-year program to sell a suite of new leases to make more than 75 percent of undiscovered, technically recoverable oil and gas available for development. The new plan, focusing on resource-rich areas in the western and central gulf, will include lease sales off Alaska's northern coast in later years, but will not include leasing in the eastern gulf or off the Atlantic coast, the department said.