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The BOEM issued on Thursday its final notice for the oil and gas lease sale in the Gulf of Mexico on March 29, 2023, as required by the Inflation Reduction Act of 2022.
The BOEM is offering up for sale 13,600 blocks across 73.3 million acres for Lease Sale #259, covering Western, Central, and Eastern Planning Areas on the Outer Continental Shelf.
The Inflation Reduction Act gave the BOEM until March 31 to hold the sale.
“BOEM’s proposed economic terms are designed to encourage diligent development while ensuring fair market value to taxpayers and maintaining compliance with the IRA. A full list of terms and conditions are in the Final Notice of Sale (FNOS). As indicated in the FNOS, the lease sale is specific for oil and gas exploration and development, not other uses,” BOEM’s press release stated.
The Gulf of Mexico is America’s primary offshore source of oil and gas, generating about 97% of all oil and gas production on the U.S. Outer Continental Shelf. The Gulf of Mexico federal offshore oil production accounts for 15% of total U.S. crude oil production, while federal offshore natural gas production in the Gulf accounts for 5% of total U.S. dry production, per estimates from the Energy Information Administration (EIA). Around 47% of all U.S. refining capacity is positioned along the U.S. Gulf Coast, along with 51% of the total U.S. natural gas processing plant capacity.
Another lease sale must be held no later than September 30, 2023, according to the IRA.
The subject of oil and gas lease sales has created more tension between the Biden Administration and the oil and gas industry, with President Biden saying on the campaign trail that there would be “no more drilling”, and the oil and gas industry pressing for more clarity on future lease sales.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.