New York Times
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August 19, 2011

By JOHN M. BRODER
WASHINGTON – The Interior Department is preparing to hold its first sale of offshore oil leases in the Gulf of Mexico since the Deepwater Horizon disaster last year, federal officials announced Friday.
The proposed sale, encompassing more than 20 million acres of the Western gulf, is scheduled for Dec. 14. It will be the first sale in the part of the gulf bordering Texas since the summer of 2009 and the first sale of any kind in the gulf since March 2010.
President Obama suspended leasing in the gulf after the Deepwater Horizon accident in April 2010, which killed 11 workers and spilled an estimated 4.9 million barrels of oil into the sea. He announced earlier this year that lease sales would resume later this year, but all drilling will be conducted under stricter environmental and safety regulations.
“This sale is an important step toward a secure energy future that includes safe, environmentally sound development of our domestic energy resources,” Ken Salazar, the Interior secretary, said. “Since Deepwater Horizon, we have strengthened oversight at every stage of the oil and gas development process, including deepwater drilling safety, subsea blowout containment, and spill response capability.
“Exploration and development of our western gulf’s vital energy resources will continue to help power our nation and drive our economy,” he added.
The lease offering includes parcels from nine to 250 miles offshore and in water depths from 16 to nearly 11,000 feet. The Interior Department estimates that the tract could produce 222 million to 423 million barrels of oil and 1.49 trillion to 2.65 trillion cubic feet of natural gas.
The agency is raising the minimum bid on leases in water deeper than 1,312 feet to $100 an acre from $37.50 to encourage companies to actively explore those areas and to compensate for the higher costs of dealing with a spill. Obama administration officials have complained that oil companies have locked up millions of acres of onshore and offshore oil resources but have not produced oil from them.
Officials said the change was based on an analysis of the last 15 years of lease sales in the gulf, which found that leases that received high bids of less than $100 an acre have experienced virtually no exploration and development. Regulators said they concluded that raising the minimum bid would discourage companies from purchasing leases and then sitting on them for years.
Officials of the Bureau of Ocean Energy Management, Regulation and Enforcement said they could not yet gauge industry interest in the parcels to be offered. Nor could they estimate how much money the government would reap from the auction, known as lease sale 218.
The last western gulf sale, held in August 2009, covered 18.4 million acres and brought in $111 million.
The last lease sale before the BP blowout and spill was in the central Gulf of Mexico. It covered almost 37 million acres and yielded $920 million.
The ocean energy management bureau “has taken aggressive steps to renew our commitment to the responsible stewardship of the U.S. Outer Continental Shelf,” said Michael R. Bromwich, director of the agency, which is responsible for monitoring offshore operations. “The decision to hold this sale was made after careful analysis of the best scientific information available and consideration of all public comments received.”
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http://www.chron.com/business/energy/article/December-Gulf-lease-requires-higher-minimum-bids-2133335.php

Houston Chronicle

December Gulf lease requires higher minimum bids
By JENNIFER A. DLOUHY, WASHINGTON BUREAU
Published 08:15 p.m., Friday, August 19, 2011

Oil and gas companies will have a shot at buying new drilling leases in the Gulf of Mexico this December – but this year, they will pay a higher price to participate in the sale.
The Bureau of Ocean Energy Management, Regulation and Enforcement confirmed Friday it is raising the cost of buying the leases in the western Gulf of Mexico. According to the agency, companies will now have to pay minimum bids of $100 per acre, up from $37.50 per acre previously for most tracts in the Gulf. The sale is set for Dec. 14.

The minimum bid for leases in already well-explored shallower water depths will remain unchanged at $25 per acre. The fee increase – and other details of the sale- were formally unveiled by the ocean energy bureau Friday.

Obama administration officials said the increase was justified because historically, leases purchased for less than $100 per acre have not been rigorously explored or developed.
“Raising the minimum bid will discourage companies from purchasing leases they are unlikely to explore in the near term,” the ocean energy bureau said.

The increase is part of an “effort to ensure that areas with the greatest resource potential are developed and to decrease the amount of leased acreage that is warehoused and goes unexplored,” BOEMRE director Michael Bromwich said in a statement. “The change in terms will better ensure that the nation’s resources are being developed in a timely manner.”

The lease sale – delayed because of last year’s oil spill – will take place in New Orleans. Dubbed Lease Sale 218, it will cover all available unleased areas – 3,900 blocks covering 20.6 million acres – in the western Gulf planning area off the Texas coast.

The National Ocean Industries Association, which represents more than 250 companies in the offshore energy sector, applauded the announcement. “This sale marks a key step toward restoring American jobs,” said Randall Luthi, NOIA president. “We look forward to continuing to work with the agency in ensuring clarity and efficiency in the leasing and permitting process while safely providing the offshore energy resources that help fuel America and our economy.”

Erik Milito, the upstream director for the American Petroluem Institute, also cheered the scheduling of the sale – the first of its kind since March 2010 – but was unenthusiastic about the planned cost increase.

A hasty move?

“We are hopeful that this does not discourage investment in these vital domestic resources,” Milito said. “We caution efforts that discourage investment in U.S. resources during this time of economic and regulatory uncertainty.”

But the administration insisted after reviewing historical auction data, “the increase will have little to no adverse impact on the timing or magnitude of production from tracts in this sale.”

Environmentalists said the administration was moving hastily.

“Rushing this lease sale puts marine ecosystems at risk before the ink is even dry on the impacts of the BP spill,” said Jacqueline Savitz, senior campaign director for the ocean conservation group Oceana. “BOEMRE appears to be caving to intense pressure from the oil industry to return to ‘business as usual,’ without regard for the extraordinary risks to already imperiled marine animals.”

The ocean energy bureau put the western Gulf sale on hold to complete a new environmental analysis of the region that was spurred by the Deepwater Horizon disaster. The research updates an older environmental impact statement conducted before the Gulf spill.

The sale queued up for December is generally viewed as less commercially attractive than a separate planned auction of deep-water tracts in the central Gulf region. That planning area includes areas near the Macondo well that blew out last year.

Bromwich has previously confirmed that a sale of central Gulf leases is on track for the first half of next year – before the end of the current five-year plan that governs oil and gas leases on the outer continental shelf. That plan expires on June 30.

jennifer.dlouhy@chron.com

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CNN

http://www.cnn.com/2011/US/08/19/gulf.lease.sale/#1_undefined,0_

U.S. to hold first Gulf lease sale since Deepwater Horizon spill
By the CNN Wire Staff
August 19, 2011 9:03 p.m. EDT
STORY HIGHLIGHTS

The sale will include more than 20 million acres in the western Gulf
“We have strengthened oversight at every stage,” says Interior Secretary Ken Salazar
The explosion on the Deepwater rig led to the release of more than 200 million gallons of oil
11 people working on the rig died in the explosion, while 16 others were injured

(CNN) — The U.S. government said on Friday it would hold its first oil and natural gas lease sale in the Gulf of Mexico since the Deepwater Horizon explosion and oil spill last year.

The proposed sale, scheduled for mid-December in New Orleans, will include more than 20 million acres in the western Gulf, according a statement from the Department of the Interior.

“This sale is an important step toward a secure energy future that includes safe, environmentally sound development of our domestic energy resources,” said Interior Secretary Ken Salazar.

“Since Deepwater Horizon, we have strengthened oversight at every stage of the oil and gas development process, including deepwater drilling safety, subsea blowout containment, and spill response capability. Exploration and development of our Western Gulf’s vital energy resources will continue to help power our nation and drive our economy,” he said.

The April 20, 2010, explosion on the Deepwater Horizon rig led to more than 200 million gallons of oil being released into the Gulf. Eleven people working on the rig died in the explosion, while 16 others were injured.

Besides the oil, hundreds of thousands of gallons of chemical dispersant went into the water. At the peak of the crisis, in June 2010, 37% of Gulf waters — a total of 88,522 square miles — were closed to fishing due to contamination.

The Bureau of Ocean Energy Management, Regulation and Enforcement estimates the proposed lease sale could result in the production of 222 million to 423 million barrels of oil and 1.49 trillion to 2.65 trillion cubic feet of natural gas.

The agency is hoping to increase the minimum bid for blocks in water depths of 400 meters and greater to $100 per acre, up from $37.50, according to the statement. It said leases that received high bids of less than $100 per acre have experienced virtually no exploration and development activities.

“The change in terms will better ensure that the nation’s resources are being developed in a timely manner,” said BOEMRE Director Michael Bromwich.

In October, Salazar announced that the U.S. government was lifting the moratorium on deep-water oil drilling put in place after the Gulf oil disaster.

Special thanks to Richard Charter

http://www.nola.com/news/gulf-oil-spill/index.ssf/2011/08/bp_investigating_new_oil_sheen.html

Times-Picayune

Oil giant BP says it is investigating a new sheen in the Gulf of Mexico

Published: Thursday, August 18, 2011, 6:03 AM Updated: Thursday, August 18, 2011, 6:03 AM
By The Associated Press

Patrick Semansky, The Associated Press

Oil giant BP said Thursday it is investigating a new oil sheen in the Gulf of Mexico, like this one near the Mocando oil well in July 2010. The company did not disclose the location, but did say it was not near any of their current operations.

A catastrophic explosion at the energy giant’s Macondo well in the Gulf on April 2010 killed 11 men and led to the worst offshore oil spill in U.S. history.
BP did not make clear Thursday what the source of the new sheen was, but told The Associated Press in London it was not found near “any existing BP operations.” A sheen is a shiny coating that floats on the surface of the water, and could come from leaked or spilled oil.

London-based BP spokeswoman Sheila Williams said that “there is a lot of sheen in the Gulf of Mexico area” and that the substance did not necessarily come from a BP site or well.

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http://www.news-journalonline.com/breakingnews/2011/08/bp-oil-sheen-probed-in-gulf-of-mexico.html

The Daytona Beach News Journal

Remote mini-sub probes Gulf of Mexico oil sheen
ASSOCIATED PRESS

August 18, 2011 7:15 AM

LONDON — Oil giant BP is investigating a new sheen in the Gulf of Mexico with a remote-controlled mini-sub but says there is no immediate indication it was the result of a new oil spill.

A catastrophic April 2010 explosion at BP’s Macondo well in the Gulf killed 11 men and led to the worst offshore oil spill in U.S. history, although BP’s description of the site of the new sheen and a statement from a U.S. official seemed to indicate that the discovery wasn’t near where the Macondo well blew up.

A sheen is a shiny coating that floats on the surface of the water, and could come from leaked or spilled oil. BP did not make clear what the source of the sheen was, but told The Associated Press it was not found near “any existing BP operations.”

BP said in a statement today the sheen was found near two abandoned exploration well sites in the Green Canyon Block in the Gulf of Mexico. According to an online map by the U.S. Department of Energy, the Green Canyon Block — a large square-shaped area of water south of Louisiana — is south and west of the Mississippi Canyon Block where BP’s Macondo well blew up.

“They are not investing any sheens in the vicinity of the BP well,” Paul Barnard, Operations Controller for New Orleans’ sector of the Coast Guard, told the AP today.
U.S.-based BP spokesman Daren Beaudo said the company had sent a remotely operated mini-sub to examine the abandoned exploration wells over the weekend.

Some oil naturally seeps from the floor of the Gulf, and the AP has reported that at least 27,000 abandoned oil and gas wells in the Gulf are not routinely inspected when plugged or subsequently monitored for leaks.

BP’s operations in the Gulf of Mexico have seen particular scrutiny following the 2010 disaster and it remains the area’s largest leaseholder, but other energy companies have operations in the Gulf as well.

Special thanks to Richard Charter

http://www.huffingtonpost.com/stephen-kretzmann/fred-upton-big-oils-super_b_929297.html

Numerous recent polls reveal that the American people believe that Congress is more responsive to their campaign donors than their own constituents. In addition, Americans of all affiliations clearly favor ending oil industry handouts. The question is, whose side is Fred Upton on: the American people’s or Big Oil’s?

Rep. Upton is Big Oil’s biggest champion on the newly named Joint Committee on Deficit Reduction. All six Republicans on the Committee have consistently voted to preserve oil industry handouts.

Six months into his tenure as Chairman of the House Energy and Commerce Committee, Rep. Fred Upton has stopped even trying to hide his pro-Big-Oil agenda. Upton consistently sides with the oil and gas industry — and it’s clear why.

During his House career, Upton has received $281,350 in oil and gas industry campaign contributions and more than a third that total, $100,700, during the 2010 election cycle. The energy industry is opening their wallets for Upton — in the second quarter of 2011 alone, Upton raised $104,000 in campaign contributions from oil, gas and coal — and its not even an election year.

This may seem like a lot of money, until you consider the return on Big Oil’s investment. The oil industry has spent roughly $280,000 to back Upton and $4 billion is the low end of credible estimates of the value of their subsidies. Eliminating some of the zeroes, would you invest $2.80 to get $40,000 in return? Of course you would. Big Oil could spend a hundred or even a thousand times more on Fred Upton, and it would still be a great bargain for them.

Oil industry lobbyists have made keeping the corporate welfare a top priority. The American Petroleum Institute announced earlier this year that it would for the first time begin directly donating to candidates, adding to the more than $13.6 million the oil industry gave to current members of Congress during the last election cycle.

In July, Upton pushed legislation that would speed up the development of the Keystone XL pipeline through his committee. Common sense would make that a risky political decision, considering what Michiganites have endured since the Enbridge Energy oil spill into the Kalamazoo River that feeds Lake Michigan. But Upton has already shown his disregard for Michigan families by appearing in the front row of an API conference, just six months after the spill of a million gallons of oil into the river running right though his district.

In fact, since taking the chairmanship, Upton has been maneuvering to dismantle the Environmental Protection Agency (EPA) and Department of the Interior, blasting the standards and protections that keep American families safe from the reckless practices of Big Oil companies. And he’s not doing this on behalf of the working men and women of this district. A recent poll from the American Lung Association revealed 65 percent of Michigan and Ohio voters supported stricter EPA limits.

Big Oil is working hard to keep campaign checks flowing and the access they bring open and active. The 2010 increase in funds marked a dramatic shift in Upton’s politics. Unfortunately for regular families, that kind of access is limited if you can’t write a huge check.

So, Upton’s priorities continue to seemingly move away from protecting families and towards pushing the agenda of his financiers.

Is Fred Upton willing to act on behalf of Michigan families for a change? Or will he continue to be Big Oil’s champion? The answer will show us all who Fred Upton really listens to most.

Follow Stephen Kretzmann on Twitter: www.twitter.com/kretzmann

Special thanks to Richard Charter

http://ecopolitology.org/2011/08/12/12-green-groups-push-for-end-to-oil-industry-tax-breaks/
Published on Date August 12th, 2011 by ecopolitology

Oil companies are reaping massive profits and skirting taxes (with the help of fossil-fuel-friendly politicians) while the U.S. is in a debt crisis. Is that fair?

While the general public suffers through very difficult economic times and the threat of government shutdowns, the oil industry is reaping good profits, monumental profits. In the past decade, as the US has lost a tremendous number of jobs, the 5 biggest oil companies have brought in nearly $5 trillion in profits. With gas prices rising, Exxon and others have been bringing in more and more.

Well, on the one hand, you might just say: “Good for them, they’ve done well at exploiting the oil in our earth and satisfying a national addiction and have succeeded in a capitalistic world.” But there’s one rather important thing I haven’t mention yet…. These oil companies are reaping hefty rewards on the backs of the American people. They enjoy huge tax breaks while U.S. infrastructure is crumbling and Americans are out of jobs.

Of course, the public, getting word of this, has been pretty unsupportive. Why should companies making billions, or even trillions, not have to pay taxes? It’s a good question. While every poll I’ve seen on the matter has shown that the public doesn’t support these tax loopholes, though, Republicans in Congress (and even a few Democrats) have done everything they could to keep these loopholes in place… so, they still are.

Leading Environmental Organizations Call for an End to Oil & Gas Tax Breaks

12 leading green organizations, fed up with all of this in the midst of our debt crises, have sent an open letter to Congressional leaders Harry Reid, Mitch McConnell, John A. Boehner, and Nancy Pelosi. The point of the letter is that while we dig ourselves out of the massive debt we’ve accumulated over the last decade or so, we should focus on cutting tax breaks that help companies which are increasing global warming, threatening numerous endangered plant species and animal species, and harming the American public. Here’s the intro:

As you begin work to set up the bipartisan Joint Select Committee on Deficit Reduction that will recommend further federal savings under the Budget Control Act of 2011, we are writing on behalf of our millions of members to emphasize that any deficit deal must represent a balanced approach that focuses both on cutting wasteful subsidies that harm the public interest and raising significant revenues. Any other approach is quite simply a decision to dismember vital programs that keep our air clean, our water safe to drink, and preserve our natural heritage.

One area where Congress should support reforms that would benefit the American people is by reducing environmentally destructive and economically distorting subsidies. These unnecessary subsidies, which are found both in spending programs and the tax code, harm public health and our natural resources while doling out hard-earned taxpayer dollars to mature industries that need no government assistance. There is no rationale for continuing these subsidies at a time when middle- and lower-income Americans are being asked to make sacrifices and when all federal spending is being subjected to deep cuts.

Well said. The whole letter is worth a read, and it does focus in on the oil and gas industry a bit, which it points out are receiving tax breaks likely to cost the American public $100 billion over the next ten years (if not cut).

It’s time these companies pay their fair share of the taxes and help the U.S. get back on its feet. I hope Congress will read this important letter and act appropriately.

Special thanks to Linkedin.com

Dear friends:

Please find below the text of a letter Sierra Club sent today to Senator Barbara Boxer, Chairman of the Senate Environment and Public Works Committee, expressing our concerns with the Gulf RESTORE bill. The current bill is missing several elements needed to ensure meaningful coastal restoration and recovery of the Gulf’s ecosystems and communities.

Sierra Club strongly supports the goal of the bill to distribute 80% of Clean Water Act (CWA) fines levied against BP to the five Gulf Coast states. We also want to make sure that the bill is strengthened to provide accountability and public trust; create mechanisms for public engagement; and ensure consistency and increase scrutiny of projects (especially those selected by the Governors of the Gulf coast states).

A copy of the full Gulf RESTORE bill is attached. Please contact me if you have any questions about the bill or Sierra Club’s position.

Frank

Frank Jackalone
Senior Organizing Manager/ FL & PR
Sierra Club
111 Second Avenue, Suite 1001
St. Petersburg, FL 33701

August 4, 2011

The Honorable Barbara Boxer
U.S. Senate Committee on Environment and Public Works
410 Dirksen Senate Office Bldg., Washington, DC 20510-6175

RE: Strengthening RESTORE Bill

Dear Chairman Boxer,

On behalf of our 1.2 million members nationwide, which includes more than 75,000 members across the five Gulf Coast states, we are writing to express our appreciation for your continued support on Gulf recovery issues, and to respectfully ask that you strengthen the current Gulf legislation being considered by the U.S. Senate Committee on Environment and Public Works (EPW).

Over the past sixteen months, the Sierra Club has worked alongside our members and allies to ensure that the effort to restore the Gulf of Mexico’s ecosystems, communities, and economies is driven from the ground up and guided by the principles of transparency, accountability, and independent science. The Sierra Club has advocated strongly for a public seat at the decision-making table, recognizing that widespread feelings of mistrust and lack of transparency continue to color restoration and slow recovery efforts.

We appreciate that the RESTORE the Gulf Coast bill currently under consideration by EPW would direct 80% of the anticipated Clean Water Act (CWA) fines levied against BP to the five Gulf Coast states. Indeed, this reflects Secretary Mabus’ and the National Oil Spill Commission’s recommendations as well as the repeated requests of countless NGOs and Gulf leaders, including the Sierra Club.

The Sierra Club, however, believes the current bill is missing several elements that would ensure meaningful coastal restoration and recovery of the Gulf’s ecosystems and communities. We respectfully request EPW add the following provisions to the bill to address these serious deficiencies.

Provide Accountability & Restore Public Trust

Concerns about the mismanagement of federal monies distributed during the 2005 Hurricane Katrina recovery process underscore the need for a transparent, accountable process to apply and distribute CWA funds by:

Creating a Science Advisory Committee comprised of independent scientists from around the Gulf Coast to provide input on restoration project selection, implementation, and monitoring processes.

Requiring an annual legislative audit by the Government Accounting Office or an independent auditor located outside the five Gulf states.

Ensuring the full application of the Administrative Procedures Act.

Create Mechanisms for Public Engagement

Ensure the full application of NEPA by requiring the Gulf states and the Gulf Coast Ecosystem Restoration Council to establish formal public comment periods and holding public hearings during the development of the Comprehensive and State Plans as well as all proposed restoration projects and programs.

Create a permanent Regional Citizens’ Advisory Council (RCAC) comprised of community leaders and stakeholders from the affected Gulf states to improve communications and provide long-term oversight of future oil industry actions.

Ensure Consistency and Increase Scrutiny of Projects

Ensure that all plans and projects developed and implemented under the statute are consistent with the goals and processes of the Natural Resource Damage Assessment and the Gulf Coast Ecosystem Restoration Task Force, and are approved by the Gulf Coast Ecosystem Restoration Council.

A Stop Gap/Do No Harm clause is necessary to ensure funds prioritize ecosystem restoration over economic development, such as: “Amounts provided under this bill may not be used for activities that destroy or degrade the health, diversity, or viability of natural coastal or marine ecosystems” and “No more than 10 percent of the funds received by a state in any fiscal year may be expended on projects that are primarily intended for economic development rather than restoration of the natural coastal or marine ecosystem” (Note: A definition of ‘economic development projects’ also is necessary).

Section 4 that deals with 30% Impact Formula Allocation with Oversight by the Council allows for the states to bring the Secretary of Treasury to Federal Court if the Council fails to act within sixty days or disapproves a project. This language is burdensome and creates a hostile atmosphere for decision-making.

Section 5 that identifies disciplines for grant monies annually awarded by the Gulf Coast Centers of Excellence includes, “Offshore energy development” and “Sustainable and resilient growth, economic and commercial development”. This language does not appear aligned with the principles of ecosystem restoration.

We appreciate your consideration of these issues and look forward to working with you to restore the Gulf and its communities. Thank you for considering this important request. If you have any questions or need further information, please contact Jill Mastrototaro, Gulf Coast Protection Campaign Director, at jill.mastrototaro@sierraclub.org or (504) 861-4835.

Sincerely,

Debbie Sease
Sierra Club

Special thanks to Frank Jackalone