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US raises royalty rate for new deepwater leases to 16.7%
Platts
WASHINGTON
Petroleumworld.com 01 10 07The Bush administration Tuesday raised the royalty rate for most new
offshore deepwater federal oil and gas leases to 16.7% and opened the door to
new leasing in Alaska's Bristol Bay.Bush also lifted a moratorium on leasing in an area of the central Gulf
of Mexico south of the much-disputed Lease Sale 181 area. That move was in
direct response to a bill passed by Congress and signed by the president last
year that opened over 8 million acres in the gulf, including acreage in the
Lease 181 South Area, to new leasing."Together, these actions will enhance America's energy security by
improving opportunities for domestic energy production, and will also increase
the revenues that the federal government collects from oil and gas companies
on behalf of American taxpayers," Interior Secretary Dirk Kempthorne said in a
statement.Both Bristol Bay and the Lease Sale 181 South areas were put under a
federal moratorium through 2012 by then-President Bill Clinton, who renewed
existing bans.By lifting the ban, the Interior Department's Minerals Management Service
could move forward with its proposed plan to hold a lease sale in 2010 in
Bristol Bay, a natural-gas prone area that is home to a vibrant fishing
industry, and in late 2007 in the Lease Sale 181 South area.BRISTOL BAY OFF-LIMITS SINCE EXXON VALDEZ SPILL
Bush has long expressed an interest in opening more lands to energy
development as a way to reduce US reliance on foreign oil. Bristol Bay, placed
off-limits to drilling by Congressional and presidential moratorium following
the Exxon Valdez spill in March 1989 and concerns about the potential of
drilling to harm fisheries, is an area that is favored by industry.In a 2005, the US Minerals Management Service said 11 companies expressed
interest in leasing in the North Aleutian Basin, of which Bristol Bay is a
part, making it the second-most requested area, after the Eastern Gulf of
Mexico. MMS, this summer as part of its five-year drilling plan, proposed two
sales for the basin, one in 2010 and the other in 2012. MMS has estimated the
area could contain 5 Tcf of natural gas and about 200 million barrels of oil
and that development could result in 11,500 jobs and $7.7 billion of "net
benefits."Kempthorne, in his statement, said the new drilling would be subject to
environmental review. "Both [Outer Continental Shelf] areas -- one in the
North Aleutian Basin of Alaska, known as Bristol Bay, and the other in the
Central Gulf of Mexico -- would receive thorough environmental reviews,"
Kempthorne said. "There will be significant opportunities for study and public
comment before any oil and gas development could take place in these areas."Environmental groups are sure to decry lifting of the Bristol Bay
moratorium having blasted Bush when word of the proposal leaked in December.
At the time, 31 local and national environmental and community groups wrote
in an open letter to President Bush, calling the area "one of the most
important and sensitive areas of the nation's Outer Continental Shelf" and
saying development could have "potentially devastating ecological, economic,
social and cultural impacts."--Cathy Landry, cathy_landry@platts.com
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Platts 09 01 07
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