Feds get $1.2 billion from Gulf oil, gas sale
The federal government sold off oil and natural gas drilling rights Wednesday for swaths of the Gulf of Mexico, bringing in an expected $1.2 billion as part of what President Barack Obama's administration calls its "all-of-the-above energy strategy."
The sale took place a week after Obama proposed spending $2 billion over 10 years to wean cars and trucks from fossil fuels and to create "clean energy" jobs from solar, wind and geothermal sources. White House officials have said they are encouraged by early bipartisan support for the Energy Security Trust plan, which would require an act of Congress to set up.
In announcing Wednesday's sale, federal officials mentioned the president's commitment to renewable energy and the environment while also describing the central Gulf of Mexico as "one of the cornerstones of the United States' domestic energy portfolio."
"Developing public energy resources in the Gulf of Mexico is good for the Gulf's economy and reflects President Obama's commitment to expand oil and natural gas production safely and responsibly, reducing our dependence on foreign oil, and supporting American energy jobs," said outgoing Interior Secretary Ken Salazar.
Nearly 39 million acres off Louisiana, Mississippi and Alabama were put up for lease, with offshore energy companies submitting 407 bids for more than 1.7 million of those acres, the U.S. Department of Interior announced.
The final amount of money from the sale could change, as each bid must be evaluated to ensure it is "fair market value" before the winner officially gets the lease.
The federal Bureau of Ocean Energy Management estimates the entire area up for sale in the Gulf could lead to the production of up to 890 million barrels of oil and 3.9 trillion cubic feet of natural gas.
The tracts are between three and 230 nautical miles off the Gulf coast, at water depths of between 9 and 11,115 feet. Those who win them are obligated, per the terms of the sale, "to protect biologically sensitive features and provide trained observers to monitor marine mammals and sea turtles."
Wednesday's sale follows others last June and November, when a total of about 60 million acres of the Gulf were made available for exploration and development.
With the oft repeated mantra "drill baby drill," Republicans have criticized President Barack Obama's administration for not doing more to spur oil and gas production in and around the United States.
But since 2006, the country's natural gas production has surged 30%, and its oil production has risen 33%, putting the United States on pace to pass Saudi Arabia as the world's leading oil producer by 2020.
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