Background on the Gulf of Mexico Lease Sale
The US government, under President Donald Trump’s administration, plans to hold an oil and gas lease sale covering approximately 80 million acres (about 324,000 square kilometers) in the Gulf of Mexico on December 10, according to the Bureau of Ocean Energy Management (BOEM) of the United States.
President Trump has renamed the Gulf of Mexico as the “Gulf of the United States.”
Part of a Larger Program
This sale is the first of three planned auctions in President Joe Biden’s five-year offshore drilling program, which was set to have the fewest oil and gas lease sales in history.
Details of the Lease Sale
The government intends to offer around 15,000 unleased blocks situated between 4.8 and 372 kilometers offshore, as per the BOEM, a division of the Department of Interior. The BOEM proposes a royalty rate of 16.67%, the lowest since 2007.
Importance of Offshore Oil and Gas
Matt Giacona, the Principal Deputy Director of BOEM, stated in a press release: “Offshore oil and gas play a critical role in our nation’s energy portfolio, as the Gulf of Mexico accounts for 14% of the oil produced in the country.”
“This proposed lease sale demonstrates BOEM’s commitment to advancing U.S. energy dominance and encouraging the production of affordable and reliable energy resources for the nation,” Giacona added.
Key Questions and Answers
- What is the purpose of this lease sale? The US government aims to offer oil and gas leases for exploration and production in the Gulf of Mexico, which accounts for 14% of the country’s oil production.
- How many acres will be up for lease? Approximately 80 million acres (324,000 square kilometers) will be available for lease.
- How far offshore are the proposed leases located? The leases will be situated between 4.8 and 372 kilometers from the coastline.
- What royalty rate has been proposed for these leases? The BOEM has suggested a royalty rate of 16.67%, which is the lowest since 2007.
- Why is this lease sale significant? This sale is the first of three planned auctions in President Biden’s five-year offshore drilling program, which was intended to have the fewest oil and gas lease sales in history.
