March sale of Gulf of Mexico drilling tract leases will likely be delayed

In light of this year’s oil spill, a planned March lease-sale of federally owned offshore oil and natural gas drilling tracts in the central Gulf of Mexico will likely be delayed as the Interior Department conducts an environmental review of possible impacts of dilling in the region, according to analysts and other industry observers.

The study is expected to take six months, meaning that it might not be finished by the time the auction is slated to be held, Erik Milito, director of upstream and industry operations for the American Petroleum Institute, told reporters Monday in a conference call.

Milito questioned the necessity of the analysis, saying that the agency has conducted thorough assessments in the past, while cautioning that any delay could “decrease future energy production if we don’t develop new prospects at a regular pace.”

“Without continuing lease sales, it’s more difficult to do that,” Milito said, “and you end up having less leases and less opportunities to find economic resources to produce.”

The federal Bureau of Ocean Energy Management, Regulation and Enforcement, which has not yet announced any delay in the lease sale, has said it plans to auction leases next year for drilling tracts in central and western parts of the Gulf. And any potential delay, Milito said, could put what he described as more than 100,000 jobs tied to the industry into question, and potentially lead to the first year since 1965 that no new tracts are opened in the region.

In May, Interior Secretary Ken Salazar called off the August gulf lease sale in the wake of the April 22 explosion at BP’s Macondo well in the Gulf. The federal government imposed the six-month moratorium on deepwater drilling in the Gulf of Mexico last spring, which was lifted Oct. 12. Read more at www.nola.com