Bellwether lease sales cause worry. The Trump administration heralded the government’s sale last month of U.S. drilling leases in the Gulf of Mexico as a bellwether. If that is the case, a Reuters analysis of the sale’s results shows reason to worry about demand in future offshore auctions. The sale brought in $124.8 million, as just 1 percent of the 77 million acres (31.2 million hectares) offered, found bidders. Reuters examined the acreage offered and leased, and nearly all the purchases show big drillers stuck closest to existing infrastructure, shunning the most far-flung areas. While U.S. crude oil production reached a record last year at more than 10 million barrels a day, most new development is in onshore shale regions. The U.S. Interior Department has said it wants to open all U.S. coasts for drilling, including the Atlantic and Pacific. But the Gulf result indicates limited interest even in already-developed areas, never mind unexplored coasts. The March auction included 9,088 deepwater blocks, each comprising roughly nine square miles. Only 105 of these blocks received bids and all but three of these were close to existing infrastructure and leases. “It kind of looks like they’re just shoring up their existing prospects right now,” said John Filostrat, a spokesman for the U.S. Bureau of Ocean Energy Management, the division of Interior that manages the auctions. Filostrat said the administration is still optimistic about future auctions and believes more auctions are needed to show the current trends.
From today’s Washington Examiner, Daily on Energy:
PRUITT TAKES OVER ALL BIG DECISIONS ON AMERICA’S WATERWAYS: The EPA chief has placed himself in charge of all decisions regarding the nation’s waterways, throwing to the wayside the agency’s regional offices that used to have some say on the matters, according to a leaked memo. In the new directive, Pruitt states he will be making all final critical decisions when it comes to the preservation of streams, ponds and wetlands. The group Public Employees for Environmental Responsibility provided CNN with a copy of the memo, which was dated March 30. The memo states: “With this revised delegation, authority previously delegated to regional administrators to make final determinations of geographic jurisdiction shall be retained by the administrator.”
Oil giants stay in their own backyards in U.S. auction
Reuters, Jessica Resnick-Ault, April 3, 2018