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Drilling leases to go to auction in December

The expected announcement from the Mineral Management Service should bring in $136-million in sales.

By JOHN BALZ

© St. Petersburg Times,
published July 21, 2001


WASHINGTON -- The federal government officially proposed to offer oil and gas leases in the newly reduced Area 181, as well as 19 other blocks in the Gulf of Mexico and off the coast of Alaska, which are set to go on the auction block this December.

The announcement, made by the Department of Interior's Mineral Management Service on Friday, has been expected for weeks and means that the 1.5-million-acre portion of Area 181, which is 100 miles from Pensacola and 285 miles from Tampa Bay, should be home to oil rigs in the coming years. But it also means that the remaining 4.4-million acres of Area 181 that creep to just 17 miles from Pensacola are off the table until at least 2007.

"The program can only get smaller, it cannot get larger," said Tom Kitsos, acting director of the MMS, which is overseeing the sale.

The agency is planning up to three auctions between 2001 and 2005 to sell as many as 256 blocks in the eastern Gulf of Mexico. Officials estimate revenues of around $136-million from the sales.

MMS officials again made the case that these lease sales are the key to helping the U.S. reduce its dependence on foreign oil and maintained that future exploration can be done without disturbing marine habitats or polluting water.

Area 181 is expected to yield enough oil to fuel the automobiles of 1-million families for nearly six years and enough natural gas to serve 1-million families for 15 years.

The central and western regions of the Gulf of Mexico are the heart of domestic energy production, producing about a quarter of domestic oil and gas supplies, and the agency's 5-year energy exploration plan reflects their importance. Officials are planning 10 sales in the area.

The northern coast of Alaska -- the Beaufort Sea, Cook Inlet, Chukchi Sea and Hope Basin and Norton Basin -- are being offered as possible drilling sites.

All the areas, except for the Norton Basin, have had previous drilling and none is a surprise since they are outside regions under presidential and congressional drilling moratoriums. Drilling is banned along the Atlantic and Pacific coasts.

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