Environmental groups and local activists barged into an auction being held in New Orleans on March 23, disrupting a lease sale for oil and gas drilling rights in the Gulf of Mexico.
Chanting "shut it down" and "keep it in the ground", protesters overwhelmed government officials trying to conduct the auction. Led by environmental groups such as Rainforest Action Network and 350.org, the protesters succeeded in bringing a spectacle to the lease sale. Related: $40 Billion LNG Project In Australia Cancelled Amid Low Prices
Nevertheless, the Bureau of Ocean Energy Management (BOEM), an agency housed within the Department of the Interior, completed the sale. However, it was largely a failure.
Due to low oil prices, very few bids were submitted for tracts on the Gulf of Mexico. The lease sale only attracted $156 million across 128 blocks, the fourth worst result for the region dating back to the early 1980s. The successful bids were concentrated in the central Gulf of Mexico. A second lease sale for sections in the eastern Gulf of Mexico received no bids at all. Related: Record Loss For Petrobras As Political And Economic Crisis Worsen
BOEM put on a brave face. "As one of the most productive basins in the world, the Gulf of Mexico continues to be the keystone of the Nation's offshore oil and gas resources," BOEM Director Abigail Ross Hopper said in a statement. "The decline in oil prices and low natural gas prices obviously affect the industry's short-term investment decisions, but the Gulf's long-term value to the nation remains high and the President's energy strategy continues to offer millions of offshore acres for development while protecting the human, marine and coastal environments, and ensuring a fair return to the American people."
For now, low oil prices are doing much more than environmental groups to kill off interest in offshore drilling. "I think the industry is proceeding cautiously," said Janice Schneider, Assistant Secretary for Land and Minerals Management. "When market conditions improve I think we're going to see robust participation by the industry."
By Charles Kennedy of Oilprice.com
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