The Bureau of Ocean Energy Management (“BOEM”) held their most recent Gulf lease sale, Western Sale 248, last Wednesday. This was the first federal offshore oil and gas auction to be broadcast live on the internet. At the lease sale 23.8 million acres in the western Gulf planning region were offered up for auction to the highest bidders. Unfortunately, while this sale is an important part of the process to maintain our nation’s energy security, a desperate group of environmental activists clamored to block industry’s investment. Their efforts to end all new drilling in the Gulf highlight the true lack of competence behind their strategy and more importantly, their genuine lack of understanding about the industry.
At the beginning of the week, these activists blocked the entry to the BOEM offices with flood debris and held a large blue banner that read “President Obama: More Drilling = More Floods.” What a shameful ploy, attempting to connect the tragedies of the recent flood to drilling. The message was not only highly insensitive but their claim was also illogical and severely lacked scientific evidence. Not only has industry joined together to help their community by providing the energy that powers homes but also, by fueling the boats and trucks that provided much needed relief, and to some, the only means of escape during the flood.
Louisiana’s strategic position on abundant natural resources and location on the Gulf has allowed industry to be that backbone of our state, and that is a direct result of drilling. According to the U.S. Chamber of Commerce, a policy to enact ban on federal offshore energy production could cost 110,200 jobs, $24.2 billion in annual GDP and $28 million in state royalties.
Mike Celata, the Gulf of Mexico Regional Director of the BOEM exclaimed, “The Gulf of Mexico has proven to be one of the world’s most prolific hydrocarbon basins and is the primary offshore source of hydrocarbons for the United States.” In his praise of the Gulf he continued to explain its importance by outlining that “the Gulf [of Mexico] supplie[s] the Nation with 16 percent of the total oil and 4.5 percent of the total gas.” This production is undeniably a benefit to those working in the industry, our state and our nation.
Western Sale 248 attracted the fewest bids since 1983 with three companies in attendance, submitting 24 bids totaling a mere $18 million. While, this is due to the downturn in the market, overly burdensome regulations in the Gulf exacerbate the situation.
While Western Sale 248’s outcome was not what we had hoped, it is still an investment in the Gulf. This investment is a necessary first step toward the commencement of new wells. Only drilling leads us down the path toward continued energy security and provides a route to energy independence. Continued activity in the Gulf provides high paying employment opportunities and financially healthy oilfield service industries contribute to Louisiana’s annual GDP.