Mar 23, 2018

The U.S. government's underwhelming offshore lease sale

Ben Geman, author of Generate

Let's spend a little more time with the Interior Department's Gulf of Mexico lease sale Wednesday that, as we noted here, drew modest bidding and interest despite making 77 million acres available.

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Data: Bureau of Ocean Energy Management; Chart: Chris Canipe/Axios

Why it matters: While the sale was scheduled during the Obama years, Interior's decision to make so much acreage available, the lowering of shallow-water royalty rates, and the tepid bidding bring two trends into focus: The Trump administration's aggressive promotion of U.S. fossil fuels and the wealth of other options that companies have outside the Gulf.

Quoted: Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin, summed up the modest sale in an interview with Canada's Business News Network...

“It’s good for oil and gas companies, not so great for the U.S. taxpayer, but it is consistent with this whole ‘energy dominance’ theme. The funny part is, we’re already energy dominant as it is, or on track to be energy dominant, from our onshore assets. We really didn’t need the offshore assets, we could have held them back to wait until prices were higher,” he said.

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